Commentary

Where Is TV's Biggest Ad Category - Autos - Driving In Future?

TV stations increasingly are worried about the future of automotive advertising -- the biggest ad category and a key revenue generator for traditional TV.

Linear TV has seen 2% to 5% declines in auto advertising in the last few years, according to BIA Advisory Services. Marketers are moving to cheaper digital advertising, including “real-time” mobile advertising. Those declines may seem small, but are also significant.

In that regard, we have the Video Advertising Bureau taking up this key TV ad issue.

The VAB says there are still a lot of positives for TV. For example, in the fourth quarter of 2017 -- the fourth quarter being the big automotive selling season, where 31% of those marketers' TV dollars are spent  -- saw a 13% year-over-year increase in TV ad spend to $4.1 billion. (Other quarters were not part of the analysis.)

The good news, per the VAB, is that it appears TV advertising equals specific digital media gains in terms of unique visitors -- a good engagement measure.

Looking at the top 24 automotive advertisers in this period, 11 of those marketers spent 15% more and got nearly 50% more unique online visitors. Eight advertisers that spent 15% fewer dollars got nearly 30% fewer unique digital visitors. What about the other six? The VAB says there was a “lack of correlation” between TV spend and unique visitors.

The VAB results come from the top TV auto marketers' ad spend, analyzing fourth-quarter 2017 brand website traffic, search, social media and online video views, as well as TV ad spend from comScore MediaMetrix and Nielsen Ad Intel data.

Still, this isn’t enough. Other TV analysts believe TV stations need more specific data to help grow overall automotive marketing on TV. Should it also include third-party consumer data, incorporating specific ROI guarantees based on marketers first-party marketers’ data?

TV stations' current data efforts are still based largely around Nielsen’s TV viewing data, as well as those sometimes iffy local TV market samples. Adding in digital media sales tools seem to take a back seat.

TV stations have been slow to make the necessary digital media transformations to their businesses, according to many executives.

Still, TV stations have a lot of sway -- and pull -- when it comes to big brand awareness appeal.  At the same time, TV stations continue to tout strong political advertising and retransmission revenues as big selling points for the future.

1 comment about "Where Is TV's Biggest Ad Category - Autos - Driving In Future?".
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  1. Ed Papazian from Media Dynamics Inc, August 17, 2018 at 9:52 a.m.

    Wayne, it seems to me that TV stations are losing automotive ad dollars to digital not becauseĀ  of digital's lower CPMs---actually digital video CPMs are higher than TV if bought to the same standards as TV----but because of digital's huge edge in targeting. The car makers are probably saying to themselves, "Let's rely more on national TV with its many formats and merchandisable programs, big events, etc. to motivate people to be interested in our cars while, locally, the dealers, target more selective segments to spur shworoom visits, provide info, etc". It's not a question of locally bought TV or digital media--as well as print or radio---doing the entire job. If local TV can't offer as much refined targeting capabilities as digital or, for that matter, digital OOH, it must face some loss of media dollar share in this and some other categories and develop new revenue streams.

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