Auto Ad Spending in US Plummets

Washington DC September 2, 2008; The AIADA newsletter reported that Automotive advertising is headed for its lowest level in nine years.

Automotive News reports that this year, automakers and dealers will spend about $15 billion to advertise in U.S. media. That's down 16 percent from 2007 and the lowest total since 1999, says analyst Michael Nathanson of the research firm Sanford C. Bernstein & Co.

"TV stations and local newspapers will lose the most advertising dollars, followed by broadcast networks," Nathanson says. Bernstein Research projects that auto advertisers will spend an average of $1,057 for every new vehicle sold in 2008, down 19 percent from the peak in 2004.

Similarly, franchised dealers' spending on local newspapers dropped nearly 10 percent from the first quarter of 2007. Nelson Bliss, general manager of Melody Toyota in suburban San Francisco, says the dealership cut its ad budget this year from $50,000 a month to $33,000.

About 80 percent of the budget now goes to the Internet, he said. "There were not enough leads from television and newspapers," Bliss says. "It wasn't cost-effective spending. I don't use TV at all now. I use print and radio only occasionally." For more on advertising dollars, click here.