Automotive Advertising – Newspaper’s Loss is Internet’s Gain

November 25, 2013
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NADA Automotive Advertising SpendSuccessful, savvy auto dealers understand that a good automotive advertising agency is worth its weight in gold. Effective advertising and marketing campaigns make the difference as local automotive dealers compete to dominate their market(s).

Each year automotive advertising budgets rise significantly, as local dealers vie to outsell their competition. Recent data compiled by the National Automobile Dealers Association (NADA) indicates that dealer ad budgets rose at a dramatic rate, up more than 12% from 2011 to about $7.2 billion.

Overall, there is generally good news at auto dealerships, as total revenues increased 9% in 2012, including a 13% increase in the new-car departments; and the industry as a whole saw a 6% rise in pre-tax profit at the average US dealership.

While these numbers are encouraging, it’s more important to examine where these dollars are being spent.  Not so many years ago, auto dealers relied heavily upon newspaper ads to sell cars. Today, however, the Internet has dramatically changed the landscape, as evidenced by further data collected this year by the NADA.

In 2002, for example, newspaper took up nearly half an average dealership’s annual media budget, at 46.7%. Just a decade later, that number plummeted to 16.9%. Newspaper readership and subscriptions declined sharply, and as a result advertisers began looking for more efficient ways to spend their advertising budgets.

In the last 10 years, due largely to newspaper’s decline, the piece of the pie each media source has received has changed quite a bit, as evidenced by the NADA chart below.

Automotive Advertising Spend NADA

These numbers speak volumes. Car dealers know that the way a person shops for an automobile is very different than the methods used as recently as a decade ago. While radio, television and direct mail have all increased during that time period, Internet advertising has gained the lion’s share of the money once earmarked for newspaper. Why? It’s more immediate, it’s “portable” (computers, phones and other mobile devices), and it’s very often the first place a customer begins his or her search for an automobile. Additionally, ads can be targeted for a specific demographic audience, thereby increasing their success ratio.

If you would like to find out if you have the right percentage of Internet ads in your current advertising campaign, JKR Advertising & Marketing is offering a FREE Advertising Review. This is your chance to get an in-depth, complimentary advertising review from an automotive advertising giant.

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