Upfront 2003: Automotive

Auto marketers preparing for an historically high number of launches—some of the most important in recent memory—plus a spate of corporate and divisional branding initiatives mean Detroit will belly up to the network upfront this year. “This will set a new notch in the upfront,” says Jim Sanfilippo, an auto analyst in the Detroit office of consultancy AMCI.

Last year, automakers spent $5.97 billion on the small screen, 30 percent of that on network prime time. Meanwhile, they laid out $2.5 billion on spot, about 42 percent of all TV. Well aware of the waning reach of network TV, automakers have said they will shift dollars to targeted efforts, pursuing multi-cultural, urban and regional gains. But there’s no sign that will temper the rush for early dibs. In fact, double-digit increases are predicted for the upfront.

Last year, General Motors spent $421.4 million on network and $518.6 million on spot TV, per CMR. “For the total year, our spending will be slightly higher this year over last,” says a GM representative—no surprise, since GM this year and next rolls out new product in nearly every division. This fall, Cadillac bows the SRX sport wagon. Also forthcoming: the Pontiac GTO, Buick Rainier SUV, and Chevy Colorado pickup and Equinox crossover.

Ford, which spent $314 million on network and $326 million on spot TV last year, will likely reverse that trend as the company launches its most important vehicle since the Model A, the redesigned F-150 pickup, the company’s flagship and top-selling vehicle in the United States. Also, Ford readies the launch of its Freestar and Monterey minivans, and the company this year celebrates its centennial.

Sanfilippo says the Big Three this year will rely heavily on the upfront as part of an effort to reverse the incentive-driven sales model. “As they grab their conscience back from the spate of incentives at levels they never imagined two years ago, there will be a rush to repair their brand-building efforts,” he says.

Jim Lentz, vp of marketing at Toyota Motor Sales, says this year’s upfront activity will be driven both by more product and a bigger crowd. “There are over 20 major auto launches this year. But also, in the past, if you’ve looked at Kia or Hyundai, they may have had launches, but haven’t had the bigger dollars to spend. That’s changing as well,” he says.

South Korean automaker Kia is in the midst of a new branding campaign—and Tom Smith, the company’s new director of marketing communications, says Kia will ante up. “Our desire is moving in the direction of increasing that buy,” he says. “We see it as a highly competitive marketplace this time around. Media is very tight right now, which suggests [the market] is leading into a feeding frenzy.”

Suzuki, which wants to increase yearly sales from under 68,000 units to 200,000 units by model year 2007, will spend $40 million to push two recently unveiled 2004 models, and next year plans to boost its overall ad spending to more than $100 million. Meanwhile, Nissan, entering the full-size pickup arena, is throwing major ad support behind its first full-size model, out this summer. Mitsubishi just launched its newest SUV, Endeavor.

This, as Toyota is pushing four new vehicles this year, including the new Sienna minivan and N/G Prius, the redesigned Solara and the crew cab version of its Tundra pickup.

Toyota’s Lentz says prime-time content—as much as the increasingly crowded playing field—could impact the company’s ad strategy this year. The exploding popularity of reality TV, and subsequent soaring cost of rates, could cause a shift in the company’s media buy. The company is mulling more of a spot mix, in the face of what Lentz expects to be a major CPM increase. “Are we going to shift dollars from prime network to spot? I can’t tell you yet, but we are looking at it,” he says. “Nobody’s going to back out of prime, but when the cost per thousand rises as reach drops, it forces us to look outside of the box at other ways of marketing, including cable and spot.”

He concedes that CPM increases over the past two years have been small. “But,” he adds, “it still doesn’t make anyone real happy if they have to pay double-digit increases.”—Karl Greenberg

Prime-time Network Spending in 2002: $1.8 billion*
Hot Buttons: An historically high number of launches bodes well for the nets, as does the need for more brand building.

Category: Automotive
PERIOD: Jan 1, 2002 – Dec 31, 2002

Advertiser: Prime-Time Network TV $$$
General Motors Corp.: $750.8 million
Ford Motor Corp.: $418.6 million
Toyota Motor Corp.: $250.4 million
Volkswagen AG: $232.4 million
DaimlerChrysler AG: $226.1 million

Top Programs for Auto Advertising: Expenditures
NFL Monday Night Football: $63.0 million
ER: $48.8 million
The West Wing: $43.3 million
Source: Nielsen Monitor-Plus