STUDY: TV ADS DON'T SELL CARS

Consumers Cite Internet and Direct Mail as More Influential

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DETROIT (AdAge.com) -- TV advertising has a low impact on consumers' car buying decisions, according to a new market study.
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The findings are significant because, as a group, automotive marketers are the largest purchasers of advertising and skew heavily toward TV advertising.

Word-of-mouth
Management consultants Cap Gemini Ernst & Young found only 17% of the 700 U.S. consumers it surveyed in the past six months said TV ads influenced their car-buying decisions. Ads on Internet search engines influenced 26% of consumers. Nearly half, or 48%, of the consumers said a direct-mail offer from a car dealer would influence their vehicle purchases, but the most influential measure was word-of-mouth, cited by 71% of consumers. Cap Gemini expects to release its complete findings this week.

"We think manufacturers and their dealers are wasting money on broad-based TV advertising instead of a direct-marketing approach," said Mike Wujciak, a vice president who oversees Cap Gemini's auto practice. While he's not suggesting carmakers entirely ditch their TV ad budgets, he said "maybe they should re-evaluate the media mix, because TV is such a big part of their budgets."

Automakers and their dealers, the top spending advertising category, spent $18.4 billion last year in measured media, according to TNS Media Intelligence/CMR.

Recommends online ads
Mr. Wujciak recommends the industry do more online ad campaigns, which can be put together faster, within 13 weeks, compared to 36 weeks for a TV blitz. Online ads are quicker to analyze for results than other mediums, he said.

Jim Sanfilippo, executive vice president of Omnicom Group's auto consultancy AMCI and former vice president for marketing of Kia Motors America, begs to differ with the results. "TV absolutely produces traffics for dealers," he said, noting that TV gets robust revenue from the auto industry "because it works."

TV quickly extends reach to consumers, said Mike Palmgren, media account director on BMW of North America at Publicis Groupe's Optimedia International, New York. He said BMW uses TV for awareness as part of its media mix. "If you're not aware of a product, how would you know where to research it on the Web?"

Magazine ads
TV auto ads also provide quality shots of vehicles and can show off their performance, something the Internet and two-dimensional ads can't do, he said. "On TV, you can see the light dancing on the sides of the car." Print ads are important too because readers of certain magazines tend to be influential and more details about the car or truck can be provided.

Rob Schwartz, executive creative director in Nissan North America's account at Omnicom's TBWA/Chiat/Day, Playa del Rey, compared TV ads to "a little piece of candy. TV is a thought-starter medium," he said. Then consumers can go online for more details, he added.

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