The first five months of 2008 have seen a 6.1% drop in measured media spending from automakers, with four of the nation's six biggest carmakers, Toyota, Ford, Honda and Nissan, all decreasing spending in measured media compared with the same period in 2007, according to TNS Media Intelligence. The data exclude out of home, which is not available for 2008. Overall, General Motors Corp. and Chrysler increased their spending, according to TNS data.
But struggling GM is examining all its ad buys and sponsorships for costs, return on investment, ratings and consumer engagement, a spokeswoman said. The analysis by Mark LaNeve, VP-vehicle sales, service and marketing in North America, and Betsy Lazar, executive director-advertising and media operations, led to GM's retreat from sponsoring two high-profile ABC TV properties: next year's Academy Awards and next month's Emmy Awards.
The spokeswoman had no information to share on any of GM's golf promotional agreements, which include a high-profile sponsorship of Tiger Woods. She said as far as she knows GM will still have a 2009 presence on NCAA basketball and NFL football TV programming, although GM is still negotiating with NBC on its longstanding Super Bowl sponsorship.
"A lot of the vanity buys are going to go away" for automakers, said Ian Beavis, exec VP and executive global client director of Carat. "There's no such thing as a must-have buy." Instead, carmakers will move to what works, and that means accelerating online efforts, he said.
Marketers' budgets have been cut, probably several times, since the start of the worst sales year in more than a decade, said Martin Collins, a regional VP of dealership chain Group One Automotive in California and former executive director of marketing at Ford Motor Co. He said the industry slump is forcing tough decisions in marketing, including lower spending on model launches, eliminating or cutting prelaunch vehicle programs and supporting fewer models.
Since regional dealer ad groups rely heavily on vehicle sales to generate their media dollars, their budgets also have been slashed, although several brands have hiked dealer assessments per vehicle to shore up spending, Mr. Collins said.
Ad agencies that in the past relied on traditional media work are going to have to be truly media-agnostic and figure out a way to generate revenue in the new world, said Cheril Hendry, president-CEO of ad and marketing consultant Brandtailers.
Automakers need to be smart about their online activities because new-car buyers ignore banner ads and are starting to avoid paid-search listings, according to recent Brandtailer's surveys of new-car buyers. Ms. Hendry said carmakers need to monitor buzz about their products as new-car buyers are increasingly checking out consumer reviews online two to four weeks before purchase. Brandtailers found that 82% of dealership visitors shopped online for information, and of those, 30% said they checked out consumer reviews first. That 30% represents a big jump from just six months ago.