Local dealer ad checks suggest stable outlook for auto ads. There has been concern recently about slowing auto sales. RBC's Joe Spak expects sales to decline ~3% annually in coming years. Auto is vital to TV stations, representing ~25% of non-political spot ads. As such, we spoke with local advertising agencies focused on auto dealers to get a sense for near-term budget outlooks and thoughts around media mix. Key takeaways were: 1) dealer budgets could see modest cuts but should be fairly stable; 2) TV remains a key part of dealer media mix; 3) spot TV spending by dealers should be stable over the next couple of years; and 4) longer-term outlook uncertain. Overall, we see a stable outlook for auto dealer ad spend in the next couple of years. Separately on the OEM side, Tier 1 spending appears to be picking up modestly, with GM, Toyota, Fiat Chrysler, Nissan continuing to improve, although Ford spending remains soft.
Enjoying This Commentary? There's More to Love
Subscribe to MediaVillage to receive email alerts featuring the latest content on advertising, media/TV, and marketing strategies and trends, including exclusive The Myers Report research findings.