Auto Spending will Grow 14% in 2012

Advertising Age -- May 1, 2012 - 9:58 am ET Stephen Williams NEW YORK -- As the U.S. auto industry motors toward a broad recovery, Borrell Associates forecasts that national and local advertising spending will rise nearly 14 percent in 2012, to $30.8 billion, and that about 40 cents of every media dollar will be channeled toward digital. According to a report prepared by the Virginia-based consulting firm that tracks local ad spending, the trend toward digital media -- at the expense of print, radio and direct mail -- will continue "largely unabated." CEO Gordon Borrell said the firm foresees the industry, including dealers and dealer associations, spending $11.9 billion on search buys and online banner ads, and trending toward repurposing manufacturers' agency spots for local video usage "tailored to their own purposes." The $11.9 billion figure marks an overall increase of 39 percent from 2011. "Gone are the days when broadcast advertising dominated the top of the buying funnel," stated a summary of the report. Among the factors contributing to Borrell's findings are greater availability of co-op advertising budgets, and the movement of targeting marketing to reach potential buyers via their mobile devices. According to Borrell's prognostications, nearly 90 percent of the additional dollars -- or an estimated $3.7 billion -- will be earmarked for digital. The spending data examined trends for 11 marketing channels: newspapers, radio, TV, cable, magazines, outdoor, cinema, online, direct mail, directories and telemarketing, and examined spending patterns by five types of auto advertisers: manufacturers, franchised dealers, independent dealers, dealer associations and private-party sellers. The report conservatively forecasts total sales of light trucks and cars of 13.5 million units (the U.S. sales rate was 14.5 million during the first quarter). But the report says higher gas prices and restricted credit could cause some "speed bumps." Most of the automobile ad spending will occur in the May-to-August frenzy as dealers push Memorial Day, Fourth of July and Labor Day sales. This differs significantly from other businesses, which tend to advertise in late spring and into the fall as the holidays approach. Read more: http://www.autonews.com/article/20120501/RETAIL03/120509992#ixzz1tejvc8PV