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Dealer ad buys down 7% in ’05

November 18, 2010

Dealership spending on advertising as a percentage of new-vehicle sales fell 7 percent last year compared with 2004, the National Automobile Dealers Association reported. Franchised dealers spent an average of $457 to advertise each new vehicle they sold in 2005, according to the publication, NADA Data. 


Dealer advertising on TV, on the Internet and via direct mail rose last year. But spending on radio advertising slipped slightly and plunged 28.9 percent on newspaper advertising, the NADA statistics show.


Newspapers represented 33.0 percent of dealership ad spending last year, compared with 46.4 percent in 2004. A decade ago, newspapers accounted for 53.9 percent of dealer advertising. NADA chief economist Paul Taylor said consumer migration to the Internet and ad rate increases have contributed to the flight from newspapers.


But Taylor told Automotive News that "newspapers are not suffering as much as the numbers indicate." He notes that newspapers supplement their revenue from print classified ads with income from dealers’ online ads—a separate and growing category. And newspapers remain the medium most favored by dealers.


The NADA reports that 9.9 percent of dealers’ ad dollars last year went to a miscellaneous category that includes sponsorships. That share doubled from 2004, according to NADA Data. Such spending, NADA’s Taylor said, "can be everything from advertising at a bus stop or on the side of a bus or a shopping cart, all the way to a race car sponsorship."