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While headlines for our annual Automotive Advertising Outlook focus on car dealers’ continued infatuation with digital media, perhaps the most profound statement appears at the end of the report, in the Conclusions:
“Let’s set something straight. Automotive advertising hasn’t completely disappeared from newspapers and radio, and it’s still a healthy part of TV and direct mail. In fact, we could have begun this report as follows: ‘Despite the ballyhoo of all things digital, auto marketers still find analog media so attractive that they’re spending nearly half of their ad budgets there.’ ”
Perhaps it’s just inertia? Maybe car dealers are just slowly easing out of old habits and will eventually put 100% of their budgets in digital media.
Not likely. I spoke recently with several local auto dealers and the head of a large automotive agency, and they all had the same story: They don’t foresee abandoning print or broadcast media; they’re just seeking the optimal mix. One, in fact, significantly increased its direct mail spending this year to complement a TV campaign.
Below are this year’s actual ad budgets for two dealerships – one with more than 1,000 employees, the other with about 200. Digital media account for roughly half their budgets, but newspaper and TV spending account for 38% to 40%. Both dealerships seemed fairly sophisticated in their analysis of advertising ROI, so we’ll have to assume that TV and newspapers – and direct mail and radio for that matter –work pretty well for them.
Unfortunately, this doesn’t mean broadcast and print managers can relax. Dials are still being adjusted to find that optimum mix. Great research last year from Advertising Age with help from the Temerlin Advertising Institute showed that social media does a lousy job of changing perceptions, while TV does a lousy job of generating awareness of new product lines or extensions. It also showed that both TV and print media did a far better job of creating “branded engagements” than digital media. But hand in hand, newspapers, TV and digital media do a terrific job of influencing people to buy something better than any one of them alone.
Car dealers are beginning to find that appropriate mix. The successful media companies of the future won’t be the ones who blindly espouse the attributes of the media they happen to own while badmouthing the other. They’ll be the ones who understand how it all fits together.