March 21, 2008

Recent reports indicate a shake-up in Detroit with automakers making much needed changes to their traditional marketing models by switching media agencies and reallocating more dollars to digital advertising. This suggests they have started to see the light; however, it may not be enough. According to an analysis of BIGresearch’s most recent Simultaneous Media Survey (SIMM 11, Dec. 07) of 15,727 participants, 17.5% of General Motors customers say TV influences their auto purchases, a sharp contrast to the 40% of GM’s $3 Billion+ ad budget that was assigned to TV ads in 2006.

Top automotive advertisers pumped by far the greatest percentage of their media dollars into TV in 06, making it the most unbalanced media when compared to its influence on consumers to purchase. Because such a large portion of ad dollars were allocated to TV in 2006, automakers including GM, Ford and Toyota under spent on other forms of media such as newspaper, magazines, radio and the Internet. With their primary focus on TV, Ford spent only 5.89% of their budget on newspaper advertising which influences 16.5% of their customers. These discrepancies in spend and influence can create a negative impact on marketing ROI, especially in an uncertain economy.

“Automakers are making advances in a consumer-centric media world by integrating new media into their advertising strategy,” said Gary Drenik, President of BIGresearch. “However, when you look at which media their customers say influences them to purchase a car; they are over allocating ad dollars on TV and under spending on Internet, outdoor, radio and print.”

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