Automakers Underspend on Media that Influence Buyers
Some 17.5% of General Motors customers say TV influences their auto purchase, but GM spent 40% of its $3 Billion+ ad budget on TV ads in 2006 (proportions similar to other leading automakers’), according to an analysis by BIGresearch.
The analysis comes amid reports of automakers’ reallocation of more dollars to digital advertising. But those moves may not be going far enough, suggests BIGresearch’s most recent Simultaneous Media Survey (SIMM 11, Dec. 07) of 15,727 participants.
Top automotive advertisers pumped by far the greatest percentage of their media dollars into TV in ‘06 - the most unbalanced media spend compared with the medium’s influence on consumers to purchase (approximately 40% vs. 17-18% for major automakers):
Because such a large portion of ad dollars were allocated to TV, automakers in under-spent on other forms of media, such as newspaper, magazines, radio and the internet, BIGresearch said.
For example, Ford spent only 5.89% of its budget on newspaper advertising, which influences 16.5% of its customers:
“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.”
BIGresearch provides additional info, including charts of top automotive advertisers and what their customers say influences them to purchase.
April 18th, 2008 at 10:47 am
without any statistical verification of consumer claims of influence by medium and alignment of influence to perceptual and behavioral activities or changes, the conclusions of this study are suspect. Generally there is around a 20% error in consumer attribution to media for “influence” and it is not clear how such attributions are managed in this research.
April 18th, 2008 at 11:46 am
This is an embarrassingly naive and overly simplistic perspective on advertising and marketing. Understanding the role of each medium and how they all work together (integrated marketing?) is the issue not some junk mathematical relationships. Sorry, but if you aren’t willing to take a bigger picture INTEGRATED MARKETING approach, then your research is of little if any value or interest to marketers.
April 18th, 2008 at 11:54 am
1) Consumers are notoriously unreliable when it comes to analyzing their purchasing behavior, especially when evaluating the impact of any advertising
2) Newspaper is a price and item media which manufacturers, wisely I believe, leave to their dealers and dealer groups to handle.
April 22nd, 2008 at 1:24 pm
Although this article may be over simplified, it causes the reader to see the need for a better distribution of media budgets. Many other categories of business (wireless & retail chains, for example) typically have a more even and efficient integrated marketing approach.