Automakers, Dealers Fuel Nationwide Plunge In Ad Revenue

September 10, 2009

Bean-counters have finally assessed advertising data from the first half of 2009, and to absolutely no one's surprise, it wasn't very good. And who shoulders a big chunk of the blame for this dismal state of affairs? The auto industry, of course.

That's not entirely unfair. Auto ads generate a huge portion of total advertising revenue for media outlets like newspapers, magazines, TV stations, and websites. (Historically, between 6% and 10% of U.S. advertising dollars are spent on auto ads.) During the first six months of 2009, automakers and dealers spent $3.6 billion on advertising, or about $1.6 billion less than the same period of 2008. That 31% cut contributed to a 15.4% decline in total U.S. advertising revenue, from roughly $67 billion to $56.9 billion.

Of course, it didn't help that both GM and Chrysler underwent historic restructurings during the first half of 2009, and as a result, they instituted massive cutbacks in advertising. Today, Chrysler is still evaluating its marketing plan (and looking for a new creative agency), but General Motors is hoping to boost ad spending in the coming months. Combined with the slightly better state of the economy, that may yield marginally better results when analysts look at the second half of 2009.

[AutoNews, sub reqd]

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