Toyota Gets the Best Bang for Its Advertising Bucks

Overall, Carmakers Spend Less on Media, Incentives, Yet Move More Vehicles

By Published on .

DETROIT ( -- Toyota is the most efficient of the major car advertisers, and its Scion is a standout case study in cost effective marketing. But the good news for the auto industry in general-and bad news for the media business-is that auto marketers are learning to sell more cars for less.

Average spending on advertising per new vehicle sold dropped to $630 last year from 2004's record $645, according to Ad Age's analysis. Average spending on factory incentives -- rebates or lease and finance deals -- fell $63 to $2,539. Combined ad and incentive spending per new car or truck dropped to $3,169, down $78 or 2.4%.

Ford, GM and Honda all spent more ad dollars per car sale in 2005 than they had in 2004, but their competitors, including DaimlerChrysler, Nissan and Toyota, all made major inroads into their ad spending per sale. Of the major players Toyota was the most efficient marketer overall, spending $473 on ads per car sold. At the other end of the scale was Volkswagen, which spent $1,365 per vehicle.

In total auto marketers laid out $10.7 billion in U.S. measured ad spending last year, down about $200 million or 1.8% from 2004's record level, according to TNS Media Intelligence. The figures excluded spending by dealer associations and local dealers. Spending on incentives -- cash rebates to consumers or dealers, subsidized leases or interest rates -- totaled $42.6 billion last year, down $1.2 billion from 2004, according to, an auto information site.

Yet, despite those decreases, automakers last year sold 17 million new vehicles in the U.S., up 81,000, according to Ad Age sibling Automotive News. That was just 2.3% below 2000's record (17.4 million).

Most efficient
Toyota's Scion topped the list of the most efficient car-brand advertisers, spending only $284 ad dollars per vehicle sold -- a long shot better than its nearest major competitor. It also took first place in rankings of the lowest per-vehicle spending incentives. An average Scion last month sold with just $91 in incentives by's tally.

The Scion's 2003 launch and 2004 national rollout has been well documented and is held up inside Toyota and other automakers as a good example of an alternative approach to marketing. Scion used viral marketing, event sponsorships, music tie-ins, a docudrama and a handful of traditional ads.

Ford's Aston Martin appears the least efficient at an incredible ad tally of $3,698 per vehicle, but this Advertising Age analysis only looks at spending per car unit, not at spending per ticket price, and the Aston Martin sells for six figures.

Domestic brands last year once again far outspent Japanese rivals on incentives; Chrysler Group (Chrysler, Dodge, Jeep) spent an average $3,543 vs. Honda's $627, according to Yet Detroit is having some success in reducing its dependence on discounts: Average incentive for domestic brands last month fell below $3,000 for the first time in three years, reported.

Domestic and Japanese automakers are far closer in ad spending per vehicle. Average measured spending for Ford, Lincoln and Mercury was $434 a vehicle last year -- right between Toyota ($422) and Honda ($482).

Marketers of pricey wheels -- from Jaguar and Hummer to Rolls-Royce -- may spend $2,000 or more on ads to sell a car. But some luxury auto sellers have learned to be thrifty. BMW spent just $507 a car last year to sell the ultimate driving machine.

In this article:
Most Popular