Politics of Advertising

MEDIA – AUTOMOTIVE DIGITAL MARKETING: The number is mind-boggling: $10 billion. To be precise, Borrell Associates, a research and consulting firm that tracks local advertising, estimates that in total $9.8 billion will be spent this year on political advertising. And that’s not just Obama vs. Romney. Local contests and issue-oriented advertising also contribute, creating a hue and cry like nothing we’ve ever seen — literally. If you happen to like watching television, over $5.5 billion will be spent on broadcast. Add $939 million for cable, and the picture begins to take shape: Between now and the end of the election, the business of politics will spend approximately $42 per voter on advertising, much of it on broadcast and cable television spots to support presidential contenders and more than 13,000 state and local contests. That’s an increase, claims Kantar Media, of 52 percent over the 2008 presidential campaign.

All that money and all those spots creates a problem for local businesses, especially auto dealerships that depend on television advertising to keep a steady flow of shoppers coming into the showroom.. By way of example, at Time/Warner, car dealer advertising is rumored to equal 40 percent of total television revenue, so the impact of that many election dollars in a medium coveted by dealers is significant. Unless a dealer has purchased more expensive non-preemptive slots ahead of time, they may find themselves bumped, as political ads get a better rate and have the right to replace non-political advertisers. Given the timing of new vehicle launches, retail promotions and the fact that the campaigns are already in full swing, the result could be ominous for 30-second spots that drive people to Ford, Toyota and the rest.

Any advertiser during this year’s expanded election window — traditionally between September and November – also must factor in the nasty aftertaste that comes from negative politicking. Indeed, a survey by MGH found that 32 percent of survey respondents flip the channel as soon as a political commercial comes on, and 47 percent tune out during a negative political spot. The survey, conducted in April 2012, was taken by 1,000 adults who had seen at least one political commercial.

Getting around the obstacles is problematic, say experts, but not insurmountable. Kantar advises businesses to buy early and spend more on non-preemptable schedules. Local cable TV may also be an option, according to Todd Alvested of BKV Advertising. He advises dealers to stay away from broadcast dayparts and to shift budget to online placements.

Key Points
–An estimated $9.8 billion to be spent on political advertising
–$5.5 billion on broadcast, $939 billion on cable
–Dealers in pre-emptive slots can be bumped

On that point David Agiriga of Cobalt agrees. Cobalt, a unit of ADP, provides digital advertising packages for more than 2,000 dealers nationwide. Among those dealerships, says Agiriga, the more online-oriented shops in major metro areas have begun shifting budgets to accomodate for the political season. In addition, he advises that dealerships should stay away from sporting events, and consider series placements, as they aren’t as coveted by political campaigns. “This allows dealers to spend less money per spot since this program is traditionally less”, said Agiriga. “A $10,000 per month campaign that garners 700 spots will get 1000+ spots for the same investment.”

The bottomline is that dealers should consider shifting to digital. “Ad reps in offline media are already advising dealers to shift funds toward less competitive programming areas during this period, which causes a net savings (at the expense of reach), and to their own digital properties.” Regardless of politics, there’s no mistaking that the move to online is already happening.The political season will determine whether that shift is accelerated or continues at its current pace. Duncan Scarry, of Moore and Scarry Advertising, has seen dealerships increase the digital portion of their advertising budget from as low as 12 percent to 28 percent or higher. Moore & Scarry has provided digital marketing services for approximately 300 dealers since it began in 2002.

Automakers are also shifting, in big ways. According to Automotive News, GM, the No. 1 auto advertiser, went from $2.15 billion in traditional media categories in 2010 to just $1.77 billion last year yet GM’s overall U.S. ad and promotion spending increased 11 percent to $3.06 billion because of a 115 percent increase in nontraditional spending, to $1.28 billion — this according to Advertising Age estimates. Automotive News also found that ad spending at Ford and Toyota went up thanks to “nontraditional” areas such as online and social channels.

It remains to be seen if digital or other types of television buys serve as a good solution to the coming political advertising storm. But one thing is sure: if dealers need any more justification to shift to other, non-traditional media placements, the election season may be all the reason they need to do so.

Join the Discussion
Have you already shifted your advertising?

Sources: Automotive News, Advertising Age, Adweek.com, Borrell Associates, BKV Advertising, Cobalt, eMarketer.com, Kantar Media, Mediapost.com

Updated to correct atribution, add source reference

Published on DrivingSales.com

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