Auto Advertising Spending

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After the dip in 2001, the media ad spending amount will most likely break the $8 billion mark this year, which is up from the $7.7 billion last yearr, 8 percent below that of 2000. For the first 9 months, the total amount spent on auto ad advertising is already at $5.9 billion. With the fact that a lot of new cars are being introduced in 2003, the industry expects the amount be raised by another 5 percent in 2003.

Some of the spending is actually used on the incentive that automakers give to individual dealers, which actually comes out of the pocket of marketing budgets. In 2000-01, spot TV were chosen as the most favored type of medium among automakers, but this year the broadcast network TV has come up top again. Companies spent $1.9 billion on broadcast network TV this year, upped by 22 percent comparing to last year.

Spot TV is the only other medium that records an increase in money spent. Network cable numbers were flat. GM still remains the king by spending $1.4 billion on advertising, 3.3 percent more than first nine months of last year.

According to John Casesa, the auto analyst for Merrill Lynch & Co in New York, companies are actually estimating the money they should spend next year on advertising and marketing right now, and from the current trend he expects companies to spend roughly 5 percent more next year. He forecasts that 2004 would be a big year for domestics.

GM states that next year they are planning on spending 10 percent more on advertising. The Ford Division, which spent around $452 million so far on adverting, says they will increase their budget on adverting by 23 percent next year.

Hyundai is going for a big change next year too. In 2001, they spent around $109 million whereas this year they have spent $112 so far already. But for 2003, they are expecting to spend more than $200 millions on advertising, a dramatic jump from previous years.

Toyota, BMW, and Volvo also announce increase in advertising budget for 2003 but they refused to give out more detailed figures.

Although GM still spends the most, but their 3.3 percent increase this year is actually the smallest among the top 5 spenders. Ford is going to take a 10% jump to $923 millions. Toyota spent $621 millions this year, which is 10% more. Nissan climbed a long way to reach $487 millions this year, which is 36.5 percent higher than previous year. On the other hand DaimlerChryler is the only automaker to reduce their spending by almost 12 percent to about $836 millions.

GM and Ford spent a lot on corporate campaign too. GM spent $132 million, more than it did for each of its division except for Cadillac, Chevrolet, and Saturn. On the other hand Ford spent $146 million.

Advertising on magazine continues to drop, and this year it amounts to around 0.8 percent, which is about $1.1 billion so far. However more used cars are being advertised on magazine now. For example, among the $72 million spent this year on certified used car advertising, $25 million are being spent on magazine.

Nissan is on a roll this year and their spending on advertising has sky rocketed so much that they surpass Honda as the number 5 spender so far. They dramatically increased their advertising amount in every category, for example 90 percent more on magazine, 112 percent on TV, and 1.7 percent on spot TV.

Toyota has boosted up values in all three categories too. However, for DaimlerChrysler, they have decreased the spending on the magazine and network TV. But on the other hand they dramatically increased the amount spent on spot TV to $371 million, a 109 percent boost.

Although it is a very small percentage, but BMW increased their advertising budget this year, together with it is Mini division, by 82 percent to $78 million. Kia and Mitsubishi also posted a double digit gains in advertising budgets as well.

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