Possible Automotive Media Rethink

According to a recent analysis of BIGresearch's SIMM database by Prosper Technologies, wide gaps exist between how ad dollars have been spent versus what consumers say works best when it comes to buying a car. The Prosper analysis and media allocation model utilizes the SIMM Survey of 17,231 consumers to determine "what" and "which" media forms are most influential to consumers for buying a car, the consumption of the media, and pricing of various measured media.

Changes demanded by Congress and proposed by the automakers should include a reallocation of advertising dollars, says the BIGresearch summary. The study analysis apparently considers a  disproportionate allocation of spending on TV versus other media out of balance with consumer actions.

And, combined with consumer analytics from the SIMM Survey, the report concludes that the amount of radio consumed, its influence to purchase, combined with lower costs makes it a stronger media option for automakers, which, according to consumers, is under-utilized.

The cross platform, consumer-centric media planning and allocation tool presents a modeled media allocation against the actual ad spending characteristics in the selected data.

?Automotive Ad Spend vs. Prosper Media Allocation Model  (% of Total U.S. Advertising Spend in 2007)

 

General Motors Spend Share

Ford Spend Share

Chrysler Spend Share

Prosper Allocation Model

Magazines 

12.4%

11.9%

10.5% 

15.6%

Newspaper

5.0%

5.2%

6.9%

6.2%

Outdoor

1.5% 

0.7%

0.5%

14.6%

TV 

39.1%

38.9%

43.2%

17.3%

Radio 

3.5% 

2.3%

1.9%

21.5%

Internet 

7.0%

6.5%  

3.0%

8.5%

Other 

31.5% 

34.5%

34.0%

16.3%

Source: Ad Age Domestic Ad Spending by Category (2007)/Measured media from TNS Media Intelligence's Strategy, Prosper Media Allocation Model

Allocation Model: Media influence weighted by consumption and media cost for people planning to buy/lease a car/truck in the ensuing 6 months 

For charts specific to GM, Ford and Chrysler please visit BIGresearch here.

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17 comments about "Possible Automotive Media Rethink".
  1. Chris Whitehead from edealer , December 29, 2008 at 12:30 p.m.

    I'm very surprised by the Internet Allocation Model from Prosper. It contradicts data from NADA, Forester, JD Power just to name a few. NADA states that 9 out of 10 car buyers use the Internet in their decision making process. So why such a low allocation from Prosper?

  2. Vicki Kunkel , December 29, 2008 at 12:38 p.m.

    I agree with Chris. I'd also like to know what is included in the "other" category.

  3. Ira Sussman from Nielsen Company , December 29, 2008 at 12:43 p.m.

    What people say and how people actually make purchase decisions can be very different. Media mix studies have repeatedly shown the power of Television in purchase decision making. Try reducing a TV budget in a competitive marketplace like automotive and see how many people know about your car and place your model in their consideration set. TV and Internet are the two key drivers and work very well together.

  4. Michael l. Dean from SourceView Press , December 29, 2008 at 12:44 p.m.

    Ford and GM (Chrysler - a totally negative brand under Cerebus is really a nonplayer who will go the same way as Mervyn's - plundered and bankrupt) haven't had a new idea in decades.

    Since 1963, every time I have bought an American car I have regretted it. Now, I laugh all the way to the bank in my Beemer at their empty catch phrase "buy American". It should read "Buy American and GET SCREWED".

    GM and Ford lack cache, their brands are now negative, they make lousy vehicles, they try to stuff their stupid ideas down the consumer's throat with two things -- splashy dishonest TV/ Mag ads and easy financing, rather than finding out what the public really wants. Both firms have bought positively branded vehicle bases and debased them. They are so chicken shit they let their greedy unions amass worker earnings equivalent to what a Ph.d or MD earns.

    I believe the bailout was needed in order to maintain the status quo of incompetence, corruption, and inflated earnings for executives and union workers.

    Since the US of A is now a Socialist Capitalist country -- of the corporation, by the corporation and for the corporation, these incompetents are standing in line for their socialist handouts, even changing their spots in order to get in on the handouts (GMAC).

    Let them all die like Lehman -- they earned it!

  5. Walter Graff from Bluesky Media , December 29, 2008 at 12:48 p.m.

    This was a no brainer. As someone who makes ads for a large autogroup and deals with all aspects of media related to it, these numbers say nothing we didn't know. Always remember that 94% of people who walk into a dealership already know what they want. That translates to all media and how it affects choice. For instance, the web is NOT a place folks come to look for a car. Not that the web is not critical in shopping. It is. Folks use the web to find the car they are already looking for, or find a car that fits the price they want to pay, compare it to others, and see who has it at the best price. But they don't go to the web and see an ad and say, oh I want that car. 9 out of ten times that decision is already made when they turn on their computer. Radio is the least surprise. Probably because most radio has a call to action so while folks know what they want a good radio ad helps them to pull the trigger. TV follows suit as the number one and two best places to advertise for cars. Chris, NADA is right. They use the internet to make the decision but they already have an idea of the car or the price range they want so ads don't help, actual dealerships with the inventory do. As CHevy just prooved stating they are going ot focus on more internet ads, they are showing how out of touch they are. Put that money into insentives so dealers can sell more cars. No one buys a car because they saw a Chevy ad for an Impala on the internet.

  6. Michael Lynn from Storandt Pann Margolis , December 29, 2008 at 12:50 p.m.

    I agree with all the above...and wonder what the break out by customer demographic would show.

    I think the bigger issue may be that more and more research provides such contradictory results because of a diversity of data bases drawn from an array of panels via different sources (phone calls; internet; conventions; etc.)

    Research companies are creating their own version of the Tower of Babel!!!!!!

  7. Douglas Ferguson from College of Charleston , December 29, 2008 at 1 p.m.

    The best time to convince people their car needs to be replaced is when they are inside the car, typically listening to the radio. When they're web surfing or watching TV, they are really not connected to how much their present car is inadequate.

  8. Grant Oneal from RBW , December 29, 2008 at 2:01 p.m.

    Having done a fair amount of purchase decision research, I'd suggest, as many of the others have commented, that it's very important to clarify where in the decision process the consumer is. The process progresses from casual investigation of several makes and models to a focused pursuit of a specific make/model at an acceptable price. If he/she is just beginning to consider getting a new car and is still investigating which make, brand, or style, the media-message mix should be different than for those consumers who have decided what car they want and are just finishing the process. The challenge, of course, is that using mass media would require a strategy that provides both the right info to the beginning shopper as well as to the finishing shopper. So the message mix by medium and the ability of the websites and dealers to establish dialog become critical elements. The point is that radio may not be a terrific initial shopper medium but may be the most effective closing medium.

  9. Paul Skilbeck from O2 Sports Media LLC , December 29, 2008 at 2:05 p.m.

    I'd be interested to see a study comparing respective ROI on sponsorship vs advertising in relation to the actual respective spends.

    I too was surprised to see a relatively small Internet potential in the Prosper figures. One note about the role of the Internet in the purchase funnel: while it might be a very significant component at the narrow end, it might not be so effective at the broad end.

    Interestingly, I read that Porsche is in profit for the year. Sure, it's a niche, but I'd like to know how they spent their promotional budget.

  10. Mark Weinfeld from DGWB , December 29, 2008 at 2:13 p.m.

    I challenge this model as well. Why do car dealer associations spend millions on local TV? Afterall they are spending to reach less than 5% of the population who typically are in the shopping process at any given time. TV doesnt discriminate that way. So why?

    Because time and time again, people are informed by TV and it intercepts them with messages that help push forward shopping. No other media is quite as intrusive -- even today with DVRs.

    People have begun to understand that the last week of the year, the last week of March (end of import fiscal years) and the last week of August (typically the end of the model year) are the best times to buy. They then begin to recall ads that they may have glossed over once their needs are defined.

    I can only imagine that the economy will make all automotive dealers less able to use broad reach media and go more to direct response messaging via the internet or direct mail in these trying times when really no on is looking to buy unless they absolutely need to.

  11. Carol Lewis from Riverton Media , December 29, 2008 at 3:32 p.m.

    Thank you, Grant. I was going to write a reply but you took the words right out of my mouth - or fingers as the case may be. The auto purchase process is just that - a process. Oversimplification of the issue and dictating media mix is going to make the problem even worse - reinventing the wheel, ignoring research and more money down the drain.

  12. Rob Walker from Internet-Marketing-DB.com , December 30, 2008 at 9:06 a.m.

    This article infers that Congress should "demand" changes in the auto industries media buying mix. WOW -- why stop there, maybe all cars should be black to save on paint costs, they should only build three models, and Congress should set the price.

  13. Tony Mariani , December 30, 2008 at 9:30 a.m.

    I like the idea of radio for the car buyer. Where they are in their decision making process is anybody's guess but I think radio is a better connect. Its still one that I favor over TV any day of the week. My problem with TV is that all the manufacturers have the same ads. Cars winding down long roads and an announcer shouting, "there has never been a better time to buy a car". This isn't the day of three TV networks. Today the car buyer is better informed than the sales person selling them and we can thank the internet for that.

  14. Kristin Kash from WRAL.com , December 30, 2008 at 10:07 a.m.

    i am hoping that Jack, the author of this article can address some of these posts. i agree with many of your posts. the internet allocation model is quite shocking. could it be that internet is further down the decision making process than radio? if so, why add the radio step at all? if car buyers end up on the web before buying, why not shorten the buying cycle by reaching those consumers when they are online already. with CDs, IPODS, XM radio, etc. the radio allocation model seems silly! thoughts, anyone. links to data would be great too.

  15. Jon Keller from Channel M , December 30, 2008 at 10:36 a.m.

    Arguing for/against the present and future trends of auto advertising seems a lot like arm wrestling an octopus, especially with those that live it day to day. I honestly believe that most of those who do live it day to day are smart, forward-thinking folks who are constantly trying to make changes that will help their brand improve. Thus, making a negative statement about the entire intellectual collective in Detroit is like saying the Grand Canyon is a really big hole in the ground. That's just too easy and simple.

    Maybe a better discussion might be is WHY is TV & Magazines getting half of the ad budget from Ford, Chrysler, and GM? What do those mediums do that is so valued? I think I can argue that, for or against.

  16. Elliott Walters from Student , December 30, 2008 at 12:12 p.m.

    Readers, stop wasting your time on this article. First there is a high degree of unreliability in TNS's internet numbers--they're very low! Not only do they not get a good read on display, they don't measure search at all!

    Second, you can't do ad effectiveness research by asking people what advertising works on them. You just can't. Most people will tell you that advertising doesn't work on they.

    Meaningless information and discussion above.

  17. Alex Vetter from Cars.com , January 5, 2009 at 1:04 p.m.

    Some of the opinions here lack realism as to what people do when they go online. Cars.com has a fairly good insight into how people use our site, and cross shopping is happening on every user visit as people are trying to decide what to buy and where to buy it.

    Here are the top statistics that should refute some fo the claims here that online sites are folks who have already decided - that claim couldn't be further from the truth.

    A shift in ad allocation could save the big 3 trenendous amounts of money, but would scare their dealers who need to 'see the ads' via traditional media and would require a significant leap of faith in the branding value of online. Knowing our site and how it works, this isn't an actual leap but merely a step.

    o In-market: Nearly 80% of Cars.com shoppers plan to buy a car in the next 6 months, a higher concentration than any other major third-party auto site.
    Source: Nielsen//netratings @Plan, Summer 2008

    o Deciding on a car: 54% are undecided on new, used or certified. 74% are undecided on make and model. 97% are undecided on vehicle seller.
    Source: Millward Brown, Online Vehicle Shopper Behavioral Study, 2008

    o Time on site: The average shopper spends 25 minutes a month on Cars.com.
    Source: Omniture, Cars.com Internal Reporting, May 2008

    o Median age: 44
    Source: Nielsen//netratings @Plan, Fall 2008

    o College graduate or higher: 58%
    Source: Nielsen//netratings @Plan, Fall 2008

    o Median household income: About $80,000
    Source: Nielsen//netratings @Plan, Fall 2008