Why On God’s Green Earth Are Car Dealers Still Spending ¾ of Their Advertising Budget on Old School Media?

The Wide World of Automotive Advertising

The Wide World of Automotive AdvertisingAs a self-diagnosed statistics and automotive advertising nerd, I wait for NADA’s annual statistical analysis like a kid waiting for Santa Clause, and really for just one page – Page 18: Advertising and The Dealership.

For 20 years, I’ve watched the chart that shows how car dealers allocate their advertising dollars.

Back then Newspaper was King, Queen, Prime Minister and Chief Cook and Bottle washer rolled into one, bringing home over 70% of all dealer budgets. Radio, TV and Direct Mail fought among themselves for the rest of the pie leaving a tiny, tiny sliver for other… billboards and magazines, mostly.

Today, the chart looks dramatically different.

Internet has taken over as the top dog, surpassing dollars spent for every other medium including the once great and powerful newspapers.

But here’s the thing, despite what you hear from almost every automotive marketing guru, trainer, speaker and ninja, internet advertising offers nowhere near the dominance that newspaper once held.

Every day there are dozens of new articles and blogposts and presentations on effective automotive digital marketing, and hardly anyone is talking about old-school, traditional media – Newspaper, Radio, TV, and Direct Mail. This despite the fact that this is where car dealers still spend the vast majority of their ad dollars.

If you were to pick up any dealer magazines, there will be dozens of article on search and social, Google and Facebook, Website conversion and so on. You might think that all of the newspapers and broadcast stations had just up and closed their doors. Yet in 2012, according to the NADA, dealers spent 3 times as much money on old school traditional media as they did on digital media. Let me say that again.

Car dealers spend three times more money advertising on traditional media than they do on digital media.

NADA Automotive Advertising Statistics

The internet has revolutionized the way cars are bought and sold. There’s no arguing with that.

So why, ten years into the digital revolution, are car dealers still spending 75¢ out of every ad dollar on traditional media?

Here’s one reason. Internet marketing, third party web sites like Autotrader and Cars.com, lead generation, search, SEO and SEM have done an incredible job taking over the media function that newspapers once served: reaching those people who are in the market to buy a car today, low funnel, in market buyers, the low hanging fruit.

Back in the olden days, the Saturday newspaper was like a Christmas Toy Catalog for car buyers, if you were shopping for car, you went and picked up a Saturday paper, looked through the classifieds and at the big pretty full page ads to see who was having the biggest sale.

And in some markets that may still be the case, especially for older consumers.

For the most part, though, lower funnel customers are being reached by internet marketing.

But car dealers are still spending 3 out of 4 ad dollars on old school traditional media, specifically, Radio, TV and Direct Mail to INTERRUPT and INTRUDE into the psychi of consumers higher up in the buying funnel and earlier in the buying cycle.

Newspaper has lost 70% of it’s market share over the last 10-15 years, but radio, TV and direct mail are all hanging on strong. In fact over the last 10 years, they’ve all 3 increased their share of dealer automotive advertising dollars. I’ll say that again too:

Radio, TV and Direct Mail budgets have all INCREASED over the last 10 years.

Social media is making an effort to reach these high funnel consumers and that’s exactly the role it should take.

But dealers are still spending enormous sums of money in traditional media because, for right now, nothing has proven itself capable of INTERRUPTING and INTRUDING as well as they can.

RELATED POST: CAR DEALERS STILL LOVE RADIO AND TV ADVERTISING

Terry LancasterTerry Lancaster is the VP of Making S#!% Happen at Instant Events Automotive Advertising, father of 3 teenage daughters and a Beer League Hockey All Star, as if there could ever be such a thing.

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