TV ad spending in the automaker industry dropped 23% in June of 2021 compared with last year and has shifted away from local advertising, according to iSpot.TV. Car brands spent a hefty $161.3 million on TV advertising last month, focusing more on national ads and sporting events.
- The NBA Playoffs were a hotly contested space for auto manufacturers, though scheduling changes diminished the event’s presence in June compared with last year.
- Toyota spent 73% of its $18.7 million national TV spend on newly aired programming, about half of which went to the playoffs.
- 92% of Nissan’s spending with ABC went to the playoffs, as did 43.7% of Kia’s spending.
- Local impressions dropped three percentage points to 20.7% compared with last June as automakers focused on national buys.
Manufacturers saw diminishing returns from TV ads in the year’s first half and are looking for other places to reinvest their spending, especially in the face of economic uncertainty.
- June’s TV dip isn’t the only sign of auto manufacturers reeling in spending. According to Samba TV, linear ad impressions started to drop as early as February; spending fell 16% from January.
- That dip continued through May, with impressions failing to climb past 7 billion—a low not seen during any month in 2021.
- Last month, Ford also said it’s considering pulling back entirely on its electric vehicle ad spend—a sector automakers have invested heavily in—and said it would instead focus on customer experience.
Mounting economic worries are starting to hit consumers and industries, and automakers are investing more in consumer experience and loyalty programs rather than linear TV.
- Automakers pulling back on advertising spending will likely send more waves of anxiety through an already-nervous industry staring down a possible recession. It is forecast that the auto industry will spend $17.01 billion on US advertising in 2022, making it the fifth-largest advertising spender overall.
- Despite several months of solid spending, the last few months have seen consumer spending begin to cool off as inflation continues to climb, and recession concerns loom.
Fresh Thinking:
Economic uncertainty paired with a relatively dry TV event calendar led to a steep drop in ad spending for automakers in June. Still, several major sporting events in the year’s second half and robust job reports mean there’s an opportunity for ad spending to recover.
