Automakers Get Much Needed Jump-Start

Spurred on by seasonal clearance sales and so-called “red tag” promotional events, domestic automotive spending has surged in the last two months, as the average volume of national TV spots has more than doubled.Per a new Kantar Media report, the average volume of national TV time bought by U.S. auto manufacturers and dealer association groups increased by 101.7 percent versus the same time a year ago. At the same time, foreign auto pulled back on its broadcast and cable spend. In the two-month period beginning Nov. 10, 2009, overseas manufacturers reduced their national TV profile by 0.3 percent.The glut of ads for stateside auto peaked between Dec. 28 and Jan. 10, as domestics boosted their national TV time by 136.5 percent over the year-ago run. Imports also cranked up their commitments, as commercial time for the likes of Audi, Hyundai and Toyota increased 50.2 percent.Spot TV didn’t enjoy nearly the same lift, in Kantar’s analysis. Domestic automakers and dealers upped their spot presence 30.5 percent from Nov. 9-Jan. 10, while the imports grew just 4.1 percent.While the flurry of recent advertising activity suggests the auto category may be on the mend, Kantar notes that the boomlet was driven primarily by year-end sales promotions, which accounted for more than half of the overall TV allocation. As such, there’s no way to determine if U.S. car companies will continue the trend well into the new year. “While these events stimulated demand for TV ad time and were a boon to media sellers, they are also cyclical and of limited duration,” said Jon Swallen, senior vp, research, Kantar Media. “For that simple reason, the late-year surge in auto advertising is an unreliable basis for projecting or predicting sustained improvement in 2010.”Already there are signs that at least one foreign auto giant will sharply curtail its ad spend in the near term. On Wednesday, Toyota announced an indefinite freeze on production and sales of eight models, including the best-selling Camry and the popular Corolla. Concerns about a defect that causes unintended acceleration led Toyota to make the unprecedented move; as investors wait out a recall, the automaker’s U.S. media spend is now essentially in limbo.One domestic rival is looking to capitalize on Toyota’s bad fortune. General Motors this week announced a new incentive plan that offers $1,000 toward a new or leased GM vehicle to Toyota drivers who terminate their existing rental agreement.Of course, once Toyota figures out a way to fix its sticky gas pedal problem, it’ll likely have to spend millions on a new campaign designed to bring wary drivers back into the fold. (This after the world’s largest automaker spent $1 billion on marketing in the fourth quarter of 2009.) The bulk of the dollars earmarked for that inevitable ad blitz will land in the network coffers.Swallen notes that overall measured auto spend is generally a function of how many cars are being driven off the lot in a given period. Given analysts’ estimates of a 6 percent increase in new auto sales in 2010, it’s safe to assume that spending will increase proportionately.

Brand Marketing

Automakers Get Much Needed Jump-Start

Anthony Crupi

About

Subscriptions

Events

Publications

WORK SMARTER - LEARN, GROW AND BE INSPIRED.

Subscribe today!

Anthony Crupi