At the end of Super Bowl 50 (to be played on Feb 7 in Santa Clara, CA), there will only be one National Football League team celebrating victory. Additionally, it’s a good bet CBS will also be breaking out the bubbly.
Why? CBS is the network airing the big game, and advertisements are being sold at an astonishing rate of $5 million for a single 30-second spot – up 11% over last year’s figure of $4.5 million.
Why So Much for Super Bowl 50?
Here’s the question you are probably thinking: Who in their right mind would spend five million dollars on one commercial? The answer is, a lot of people; in fact, ad time is nearly sold out already, and we’re still a couple months away from kickoff.
The nation’s eyes will be watching … and many folks pay special attention to the advertisements. More than 114 million televisions were tuned to last year’s Super Bowl between the Seattle Seahawks and New England Patriots, making it the most-watched event in the history of television in our country. And that doesn’t take into account large gatherings such as parties, or folks gathered together to watch the game in their local watering holes.
So far, only two automakers have taken the plunge (actually one, if you take into account that they’re from the same parent company). Hyundai has committed to two spots, one each in the first and second quarters; meanwhile, sister company Kia will run one spot in the third quarter.
It remains to be seen whether the other big automakers will decide to take part in Super Bowl 50 advertising, but if past history is any indicator, chances are at least a couple of them will decide to throw their hats in the ring. But one thing is for certain: That is a LOT of money to be spending on one commercial, so it’d better be good – and memorable.
Viewers Remember TV Ads: Studies have shown that the combination of color, sight and sound TV offers is the best way to ensure that a dealership’s message is received – and remembered.
The Possibilities are Limitless: Automotive TV advertising allows advertisers to create ads that could not be produced in any other form of media.
TV is Everywhere: Nielsen recently published an article saying that 98 percent of American households have at least one television set – and most have more than one.
It Reaches the Most People: Not only is this true, but it reaches the masses in the quickest way possible. That’s two great advantages in one!
People Love TV: Americans spend more time with television than any other type of media. Research shows that viewers watch television for nearly 2,000 minutes – or more than 32 hours – per week.
TV is Most Effective: When people talk about how they learned of a certain product or service, more often than not the reply is “via television”. Automotive TV advertising is persuasive and exciting, and it’s the best way to demonstrate the benefits of a dealership and its products.
TV Gives a Dealership Credibility: When potential customers view a dealership’s advertisement on TV, the store is instantly seen as more credible and legitimate simply by being seen on television.
The Results are Measurable: Thanks to Nielsen, TV viewership can be effectively tracked. In addition, the demographic information of the viewing audience can also be obtained – a huge advantage for future use!
TV is Still Most Formidable
Despite the technological inroads of recent years, TV is still the unquestioned pacesetter of all automotive advertisements. It touches the most people in the shortest amount of time. A skilled advertising agency like JKR Advertising & Marketing ensures a dealership’s ads are seen by the right audience.
FREE Advertising Review
If your dealership is not running television advertisements, why not? We at JKR Automotive Advertising can help you make the right decision completely free of charge, with absolutely no obligation on your part. At your request, we’ll do a thorough analysis of your media market to see if you’re getting the most bang for your buck from your current advertising efforts. Give Eric Tigner a call at (321) 397-0777. He’ll do the rest.
Car loan records are being set, as Americans seem to have few issues with being on the hook for automobile payments. According to TransUnion, car loanbalances have now surpassed the $1 trillion mark – specifically, the number is $1.008 trillion as of the third quarter of this year. The car loan records are happening due to three factors.
Reasons for Car Loan Records
First, new-car sales are on a record pace and most new cars are financed; experts are predicting the total number of new vehicles sold in 2015 to come in at more than 18 million.
Second, as you might imagine, the prices of new cars are rising – and consumers are buying more expensive cars with gas prices falling. The demand for light trucks has gone up by 12 percent when compared to the first 10 months of 2014. Sales tracking company TrueCar estimates the average new-car price to be $32,529 – with the average car payment being just under $400 per month. All this means larger amounts are being financed.
Last but not least, interest rates are very low these days – especially for those with good credit scores. Those with the highest numbers can often find loans at rates below three percent.
According to the TransUnion report, the average balance for all vehicle loans through the third quarter of this year is $14,515. While this was a 2.7% rise from the same time frame 12 months earlier, this marks the slowest growth since the last quarter of 2011.
The good news is that consumers seem able to manage these payments. Of the $1.008 trillion in loans, only about $9 billion – or less than one percent of these loans – are delinquent. This is a much better rate than credit cards or home mortgages.
Other noteworthy revelations from the report show that the number of consumers under age 30 who had car loans increased by nearly 10 percent, while almost 16 million people age 60 and older had loans.
Jeff Johnson is not only the Managing Partner at JKR Advertising & Marketing, he also recently became the co-owner at Kia of North Grand Rapids. Along with many of his dealer counterparts, he was invited to tour the Hyundai-Kia facilities in South Korea … and he came back with an increased respect and perspective of the brands and the people.
It all started early on a Monday morning at the Orlando airport. “It didn’t take long to realize this wasn’t going to be a typical trip,” Johnson said. “We left Orlando about 9:30 in the morning on that Monday, and we didn’t arrive in Seoul until 6:30 the next evening. As you can imagine, we were exhausted. But as soon as we stepped off the plane, there was a paparazzi-like person snapping photos of our every move.” Eventually, Johnson and his new friends-to-be were bused to their hotel, where they were introduced to a tour guide who would follow them everywhere they went over the next two-plus days.
The following morning, things quickly got interesting as they were shuttled to the Namyang Design Center. “This large building is the workplace for 11,000 on-site engineers for both Kia and Hyundai,” Johnson recalled. “Upon our arrival we were shown a short film about Kia, then ushered into a room and told to hand over our cell phones. I found that to be a bit odd … until I found out what was happening next. Once we complied, we were allowed to view some of the Kia models coming in the near future, as well as some concept cars they are working on. After that, we were taken out to a track where we got to test-drive some of the models. As I looked around, I noticed that many of the cars still had the camouflage wrapping on them. Naturally, you can understand the secrecy involved here, but rest assured everything I saw was very, very impressive.”
After a memorable lunch at the luxurious Rolling Hills Hotel, it was back to the bus. Next stop, the Hyundai steel plant. “This place was massive,” Johnson said. “It is one of the largest in the world. They have an unbelievable, fully enclosed conveyor belt system that allows them to move raw materials across the facility. It’s the oldest steel company in Korea, and it produces a lot more than just sheet metal for cars.”
They arrived back at their hotel at about 5:45 and were promptly informed that a formal dinner hosted by Thomas Oh, Executive Vice Chairman of Kia Global Operations, would begin at 6:30 – and it was of utmost importance that they arrive on time for the event. “It is the custom for the host to greet every guest, so if someone was late, the host would not be allowed to go inside until the tardy person finally arrived. No one was late, and we enjoyed an incredible five-course meal, complete with a toast from Executive Vice Chairman Oh.” That, folks, was just the first day.
The next morning’s activities were kicked off with a visit to Kia Motors Corporation, Kia’s corporate offices. “Kia and Hyundai each have their own specific tower, and they share a very elaborate, ornate lobby area that features a number of both Kia and Hyundai models,” Johnson said. “We were given the history of Kia’s steady rise to global dominance. Did you know that it’s the 74th-most valuable brand in the world today?”
The rest of the day was spent checking out some of South Korea’s cultural spots, including the opulent Gyeongbokgung Palace. “Even though the building has not been completely restored to its past splendor, enough of it has been refurbished to make it a worthwhile piece of history to see,” Johnson commented. “We also did some street shopping at a place that was much like a giant bazaar in the United States.”
That evening’s dinner was particularly interesting for Johnson, as he was seated next to officials from Kia Motors Canada. “I discovered their market share is pretty similar to ours in the United States, and their businesses are much like ours in the states.”
The next morning saw Jeff board a plane in Seoul at 9:30 – and because of the time change actually arrive in Atlanta at 9:00! “It was a fun but exhausting two days,” he said.
Jeff Johnson the tourist was happy to once again be Jeff Johnson the husband, dad and business owner – back in his home country. Possessing 700-plus photos taken by his hosts, he has a detailed record of a trip he’ll never forget.
A recentJPMorgan Study revealed that Americans have not been particularly careful with the money they have saved since the major reduction in gas prices. Why? Well, it’s really an interesting phenomenon; something behavioral experts refer to as “mental accounting”. If the average American bought the same number of gallons of the same grade of fuel in the winter of 2014 as they did during the winter of 2013 when fuel prices were higher, they would have saved about $41 per month. Yet when everything was all said and done, the average consumer only saved about $22.
What happened?
First, Americans are choosing to drive more, because they think they can afford to. Second, many people are opting for SUVs and larger sedans that are much less fuel-efficient than the econoboxes they used to drive. Third, many people are upgrading to a higher-octane fuel, even though it can sometimes be a complete waste of money for the consumer.
More About the JP Morgan Study
As the JP Morgan study shows, when gas prices were at their highest, the average American’s monthly spend on gas was about $136. Now that the prices are lower, they are still spending $114. The end result is this: even though the prices have come down by about a third, the actual spending on fuel has declined by only about 16 percent. Many of these consumer decisions are made due to the “mental accounting” we mentioned earlier.
What does that term mean? If the consumer has become used to spending the $136 per month and they suddenly find themselves with a full third of that in their pockets, it’s easy to justify spending some of it, even if it’s for something that could be considered frivolous … hence, the term “mental accounting”.
A similar phenomenon happened in 2008, when gas prices came down markedly during the economic collapse … and it’s happening again here in 2015. And with prices at the pump projected to remain low for the foreseeable future, we can expect more of the same going forward.