Automotive Advertising

Part
01
of one
Part
01

Overview - US Automotive Advertising

We were able to obtain data from the years 2002, 2004, 2012, 2013, 2016, and 2017, as well as some general estimates for 2020. Although we were unable to find most of the information from the years 2008-2011 and 2014-2015, by having 2 older years (2002, 2004), 2 years from half a decade ago (2012, 2013), and 2 recent years (2016, 2017), we could provide a general overarching view of the last decade in automotive advertising expenditures. We provided separated segments based on advertising categories, and also included a brief overview by year.

In the last decade for United States automotive advertising expenditures, spending has increased for TV ads, decreased for print ads, increased for digital ads, and saw no change for radio ads.

In 2002, the break up of automobile dealership advertising expenditure was: newspaper 46.7%, television 16.7%, radio 15.7%, direct mail 7.4%, internet 5.0%, and other 8.5%. The total amount spent on advertising was $7.5 billion.

In 2004, the break up of expenditure was: newspaper 31%, TV 47%, magazine 11%, radio 9%, internet 1%, and outdoor 1%. The total amount spent was $21.5 billion.

Auto companies are expected to have spent more than $11 billion on TV ads in 2017. TV is the largest advertising area for this industry.

In 2012, the break up was: newspaper 16.9%, TV 20.2%, direct mail 10.8%, radio 15.9%, internet 26.5%, and other 9.6%. The total was $7.2 billion.

In 2013, the break up was: newspaper 16%, TV 64%, magazine 7%, radio 5%, internet 7%, and outdoor 1%. The total was $16.4 billion.

In 2016, the break up was: internet 33.6%, TV 24.2%, radio 15.4%, direct mail 10.3%, newspaper 8.2%, and other 8.3%. The total was $9.6 billion. In addition, digital ad spending

It should be noted that for the purposes of calculation and clarification that although the "other" category may potentially include additional figures for certain categories depending on what "other" could be, they will not be included in calculations since "other" has not been explicitly detailed.

#1 TV

In 2002, TV expenditures were 16.7% of $7.5 billion.
$7.5 billion * 0.167 = $1.2525 billion.

In 2004, TV expenditures were 47% of $21.5 billion.
$21.5 billion * 0.47 = $10.105 billion.

In 2012, TV expenditures were 20.2% of $7.2 billion.
$7.2 billion * 0.202 = $1.4544 billion.

In 2013, TV expenditures were 64% of $16.4 billion.
$16.4 billion * 0.64 = $10.496 billion.

In 2014, TV expenditures were $3.9 billion, while
in 2015, they increased to $4.84 billion.

In 2016, TV expenditures were 24.2% of $9.6 billion.
$9.6 billion * 0.242 = $2.3232 billion.

TV expenditures are estimated to be higher than $11 billion for 2017. TV is considered the largest advertising category for the automotive industry.

It is interesting to note that TV expenditures from 2004 and 2013 were similar, with about $10-10.5 billion being spent, even though almost a decade had passed. Expenditures in the years 2002 and 2012 were also similar with about $1-1.5 billion being spent.

#2 Print

In 2002, newspaper ad expenditures were 46.7% and direct mail expenditures were 7.4% of $7.5 billion. 46.7% + 7.4% = 54.1%.
$7.5 billion * 0.541 = $4.0575 billion.

In 2004, newspaper ads were 31% and magazine ads were 11% of $21.5 billion. 31% + 11% = 42%.
$21.5 billion * 0.42 = $9.03 billion.

In 2012, newspaper ads were 16.9% and direct mail was 10.8% of $7.2 billion. 16.9% + 10.8% = 27.7%.
$7.2 billion * 0.277 = $1.9944 billion.

In 2013, newspaper ads were 16% and magazine ads were 7% of $16.4 billion. 16% + 7% = 23%.
$16.4 billion * 0.23 = $3.772 billion.

In 2016, newspaper ads were 8.2% and direct mail was 10.3% of $9.6 billion. 8.2% + 10.3% = 18.5%.
$9.6 billion * 0.185 = $1.776 billion.

Generally, advertising expenditures for printed ads have decreased since 2004. While spending was $9.03 billion in 2004, except for 2013, spending has decreased to $1-2 billion per year.

#3 Digital

The internet category listed in our data from 2002-2013 only consists of display advertising. Display advertising may include banners, online sponsorship ads, and ads found in social media, such as Facebook and Twitter.

In 2002, spending on internet ads were 5.0% of $7.5 billion.
$7.5 billion * 0.05 = $0.375 billion.

In 2004, spending on internet ads was 1% of $21.5 billion.
$21.5 billion * 0.01 = $0.215 billion.

In 2012, spending on internet ads was 26.5% of $7.2 billion.
$7.2 billion * 0.265 = $1.8864 billion.

In 2013, spending on internet ads was 7% of $16.4 billion.
$16.4 billion * 0.07% = $1.148 billion.

In 2015, digital ad spending was $7.45 billion, while 2016 was $9.13 billion. Digital ad spending is estimated to increase to $15.21 billion by 2020.

We were unable to find data that included all extensive, detailed aspects of digital ads from the years 2002-2013. This may be due to a lack of thorough data from that time period. Because our data from 2002-2013 only included online display ads (as opposed to including i.e. video and mobile ads), it is understandable that total figures are drastically lower than the figures reported for 2015 and 2016. Another potential influence could be an increasing trend towards digital marketing in general, as can be seen by the industry's expected digital ad spending estimations for 2020.

#4 Radio

In 2002, radio ad expenditures were 15.7% of $7.5 billion.
$7.5 billion * 0.157 = $1.1775 billion.

In 2004, radio ad expenditures were 9% of $21.5 billion.
$21.5 billion * 0.09% = $1.935 billion.

In 2012, radio ads were 15.9% of $7.2 billion.
$7.2 billion * 0.159 = $1.1448 billion.

In 2013, radio ads were 5% of $16.4 billion.
$16.4 billion * 0.05% = $0.82 billion.

In 2016, radio ads were 15.4% of $9.6 billion.
$9.6 billion * 0.154 = $1.4784 billion.

Generally, radio ad expenditures have been steady -- remaining about $1-2 billion per year over the last decade.

#5 Social Media

Unfortunately, due to the digital nature of social media, any data we have found have been combined with previously mentioned data for digital ads. Social media ads, such as Facebook ads and Twitter's promoted tweets, are included in digital display advertising figures.

#6 Experiential/Sponsorship

Data for historical experiential spending is lacking, but we found several more recent articles reporting that companies, especially luxury automobile companies, are increasing investments in experiential advertising. In 2016, Porsche, after investing more than $100 million on its track in Atlanta used for experiential drives in 2015, invested another $150 million on a new track in Los Angeles. The Freeman Global Brand Experience Study reported in May 2017 that "one in three CMOs is expected to allocate 21 and 50 percent of their budget to brand experience marketing over the next three to five years." A report from February 2017 states that Audi has continued to increase budgets for experiential marketing.

This is the estimated U.S. sponsorship expenditures for 2015:
1. Toyota Motor Sales, U.S.A., Inc $195 million-$200 million
2. Ford Motor Co. $155 million-$160 million
3. General Motors Co. $150 million-$155 million
4. Hyundai Motor America $80 million-$85 million
5. Mercedes-Benz USA, LLC $55 million-$60 million
6. American Honda Motor Co $40 million-$45 million
7. Kia Motors America, Inc $35 million-$40 million
8. FCA US LLC $25 million-$30 million
9. BMW of North America, LLC $25 million-$30 million
10. Volkswagen Group of America, Inc $20 million-$25 million

This list was acquired from a report from Sponsorship.com and was ranked in the same order as was the report, in order from the most estimated expenditures to the least. The same methodology was used for the following list of the most active sponsorship spenders in 2016:

1. Ford Motor Corp $175M-$180M
2. Toyota Motor Sales U.S.A. $165M-$170M
3. General Motors Corp $145M-$150M
4. Hyundai Motor America $85M-$90M
5. Mercedes-Benz $55M-$60M

From 2015 to 2016, Ford Motor Group increased their sponsorship spending from $155M-$160M to $175M-$180M ($20M increase). Hyundai Motor America increased spending as well from $80M-$85M to $85M-$90M ($5M increase).

Conclusion

In the last decade for United States automotive advertising expenditures, spending has increased for TV ads, decreased for print ads, increased for digital ads, and no change for radio ads. Auto companies are expected to have spent more than $11 billion on TV ads in 2017. TV is the largest advertising area. From 2015 to 2016, Ford Motor Group increased their sponsorship spending from $155M-$160M to $175M-$180M ($20M increase). Hyundai Motor America increased spending as well from $80M-$85M to $85M-$90M ($5M increase).
Sources
Sources