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Dealers tightened advertising budgets
in 2004
By Arlena
Sawyers
Automotive News /
May 16, 2005
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| U.S. dealers
spent $8.3 billion on advertising last year,
compared with $8.5 billion in 2003. Here’s where
the money went. |
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2004 |
2003 |
| Newspaper |
46.40% |
47.60% |
| Radio |
19 |
18.5 |
| TV |
15.2 |
16.3 |
| Direct mail |
7.8 |
7.4 |
| Internet |
6.7 |
5.3 |
| Other |
4.9 |
4.9 |
| Source:
National Automobile Dealers
Association | | | | | |
Dealers spent less to advertise in all media last year than
they did in 2003, the National Automobile Dealers Association
reports. But dealers continued to spend more on Internet
advertising.
Dealership ad spending fell last year after a
decade of steady increases, NADA says in its annual report on the
state of the retail auto industry. The average franchise
dealership spent $493 on advertising per new vehicle sold in 2004.
That figure is down from $512 in 2003.
The average
dealership spent $373,876 on all advertising in 2004, NADA says.
That's a 5.1 percent decline from the previous year, when
dealership ad spending averaged $394,042.
Total ad
spending by U.S. dealerships was $8.3 billion last year, compared
with $8.5 billion in 2003.
Internet advertising accounted
for 6.7 percent of the typical dealership's ad budget last year -
an average of $25,844, NADA says. That figure is up from $20,940,
or 5.3 percent, in 2003.
The average dealership's spending
on broadcast advertising declined last year. TV ad spending
averaged $58,361 in 2004, down 9.0 percent from $64,145 in 2003.
Radio ad spending last year averaged $72,821, virtually
unchanged from $73,007 in the previous year.
NADA chief
economist Paul Taylor says dealerships increasingly are using the
Internet to target their messages and differentiate them from
other dealerships' ads.
At the same time, Taylor says, the
price of online advertising is falling: "If you're spending the
same, it means you're getting more."
While dealerships are
spending more to advertise on the Internet, they are spending less
on newspaper ads.
The average dealership spent $177,992,
or 46.4 percent, of its ad budget with newspapers last year, NADA
study found. That is down from $187,534, or 47.6 percent, in 2003.
Taylor notes that many daily newspapers publish online
automotive ads. Although the newspaper industry benefits from that
revenue, he adds, such spending by dealerships shows up in the
Internet category.
Taylor says: "I'm sure that many of the
dealers don't know that a newspaper consortium does cars.com," a
Web site for vehicle sales.
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