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Auto Advertising Screeches to Halt

Budgets affected by earthquake in Japan
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Hard times for automakers have led to hard times for auto ads, according to new preliminary data from Kantar Media. After surging 23 percent year-over-year in the first quarter, overall auto advertising slowed significantly so far in Q2, rising just 6.7 percent in April. National TV auto ads saw an even bigger bump in Q1, surging 37.2 percent, before screeching to a near-halt with a mere 6.6 percent rise in April.

Outdoor ads, after rising 34.1 percent in Q1, dropped so steeply that they experienced a 2.3 percent rate of decline in April.

According to Kantar, the ad slowdown is partially explained by natural disasters that struck Japan in March, which led to U.S. inventory shortages for Japanese automakers, especially Toyota, which cut April media spending across all tiers. Non-Asian automakers that relied on Japanese parts have also cut back on their ad budgets until they can get a handle on production capacity and maintaining deliveries to their dealers.

Kantar also suggests that Toyota’s competitors could have seen its reduced ad output as a chance to spend their own ad budgets at lower rates while still meeting their goals.