MediaPlanIQ™: Big 3 Automakers’ Ad Budgets and
Sales Down in 2008, but TV’s Share of Dollars Grows

Radio, Outdoor, Internet and Magazines Take Biggest Ad Budget Cuts

COLUMBUS, OH – (MARKET WIRE) – 7/23/09 – Automakers have suffered through some of their biggest sales declines in 2008 culminating with bailouts and bankruptcies for GM and Chrysler. However, spending on TV advertising showed no sign of easing up.  That in spite of the fact that consumers said radio and magazines are as influential in their auto purchases decisions as TV, according to an analysis of  BIGresearch’s Simultaneous Media Usage (SIMM 14) Survey (22,624 consumers) and Ad Age Data Center data.

In 2007, Detroit automakers spent $2.91 billion on TV, which is 60% of the total measured media. In 2008, their TV spend was $2.46 billion, or 62% of total measured media. From 2007 to 2008, the Big 3 spent 17.9% less on measured media. Among measured media, radio share declined the most. 

Radio      -42.1%
Outdoor    -38.4%
Internet   -33.6%
Magazines  -30.4%
TV         -17.1%
Newspaper  -3.4%

Source: Ad Age Data Center (Domestic Ad Spending by Category, 2008 and 2007)

As automakers look for ways to regroup, restructure and reinvigorate sales, understanding consumer behaviors and intentions would seem to be one of their key guides. Yet, automakers seem to be running counter to their customers' views. BIGresearch, using the recent SIMM survey results, implemented Prosper MediaPlanIQ™ to better understand consumer-centric media allocation. That study found automakers’ actual media spending was substantially out of line with consumer’s views, particularly those who plan on buying a new car or truck in the next six months. Those consumers say radio is tops for influencing* their auto purchase (22.3%). TV is #2 (21.2%) and magazines are #3 (18.3%). These numbers differ greatly from actual expenditures which show a disproportionate amount of spending going into TV.

*Influence is weighted by consumption and cost.

                                                Auto Ad Spend (Measured Media) vs. Prosper MediaPlanIQ™

               General Motors   Ford               Chrysler      
               Spend Share**    Spend Share**      Spend Share**     Prosper
               2007     2008    2007      2008     2007     2008     MediaPlanIQ™***
Magazines      18.1%    20.0%   18.2%     12.2%    15.9%    11.7%    18.3%
Newspaper      7.3%     14.4%   8.0%      5.3%     10.5%    5.6%     14.8%****
Outdoor        2.2%     1.0%    1.1%      1.1%     0.7%     0.8%     13.4%
TV             57.1%    52.7%   59.4%     71.2%    65.4%    75.6%    21.2%
Radio          5.1%     3.4%    3.5%      4.4%     2.9%     1.1%     22.3%
Internet       10.3%    8.4%    9.9%      5.7%     4.6%     5.3%     10.1%  

Source: Ad Age Data Center (Domestic Ad Spending by Category, 2008 and 2007), Prosper MediaPlanIQ™ Allocation Model, June 2009
**% of U.S. Advertising Spend in 2008 and 2007 (Measured Media)
***Optimal dollar allocation for car/truck purchases. Media influence weighted by consumption and media cost for consumers planning to buy a car/truck in the next six months from Prosper MediaPlanIQ™, June 2009
****Newspaper includes local and national newspapers (including FSIs)

“It’s clear to me that the automakers still haven’t heard the voice of the consumer,” said Professor Don Schultz of Northwestern and co-author of Media Generations. “Automakers still seem intent on investing in the media forms they have historically used, while the consumer is clearly changing their media habits. Unless and until automobile marketing people start to reflect the interests of the people they are trying to influence, I don’t see much of a chance for a turn-around for the Big Three no matter how much they spend.”

For additional charts and more information: http://info.bigresearch.com/

About Prosper MediaPlanIQ™
Prosper MediaPlanIQ™ is a result of analysis of BIGresearch’s Simultaneous Media Usage Survey (SIMM) by Prosper Technologies. Prosper Technologies collaborated with Martin Block, Ph.D., and Don Schultz, Ph.D., of the Medill School at Northwestern to analyze SIMM Surveys over six years to develop Prosper MediaPlanIQ™. http://www.bigresearch.com/samples/big-prospermediaplaniq-overview09.pdf

About Prosper Technologies
Prosper Technologies develops consumer-centric analytics from consumer responses to help businesses forecast consumer demand and expenditures, budget marketing and merchandising allocations and provides retailer specific cross consumption behaviors. Prosper MediaPlanIQ™ is a service of Prosper Technologies. BIGresearch is an authorized marketing representative.

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BIGresearch
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