Why Are Car Dealers Still Spending 75% of Their Advertising Budget on Traditional Media?

Despite what you hear from almost every automotive marketing guru, trainer, speaker, and ninja, car dealers still spend almost three out of four marketing dollars on old school, traditional media like radio, TV, newspaper, and direct mail. Every day there are dozens of new articles and blog posts and presentations on effective automotive digital marketing, and hardly anyone is talking about traditional media.

Flip through this magazine. There are articles on search and social, Google and Facebook, website conversion, CRM and so on. You might think that all of the newspapers and broadcast stations had just up and closed their doors. Yet in 2012, according to the NADA, dealers spent three times as much money on old school traditional media as they did on digital media. Let me say that again. Car dealers spend three times more money advertising on traditional media than they do on digital media.

The internet has revolutionized the way cars are bought and sold. There’s no arguing with that. So why, ten years into the digital revolution, are car dealers still spending 75¢ out of every ad dollar on traditional media?

Here’s one reason: internet marketing, third party websites like Autotrader and Cars.com, lead generation, search, SEO and SEM have done an incredible job taking over the media function that newspapers once served: reaching those people who are in the market to buy a car today, low funnel, in market buyers, the low hanging fruit.

Back in the olden days, the Saturday newspaper was like a Christmas Toy Catalog for car buyers, if you were shopping for car, you went and picked up a Saturday paper, looked through the classifieds and at the big pretty full page ads to see who was having the biggest sale. And in some markets that may still be the case, especially for older consumers. For the most part, though, lower funnel customers are being reached by internet marketing.

But car dealers are still spending three out of four ad dollars on old school traditional media, specifically, radio, TV and direct mail to interrupt and intrude into the psyche of consumers higher up in the buying funnel and earlier in the buying cycle.

Newspaper has lost 70% of its market share over the last 10-15 years, but radio, TV, and direct mail are all hanging on strong. In fact over the last 10 years, they all three have increased their share of dealer automotive advertising dollars. I’ll say that again too: radio, TV and direct mail budgets have all increased over the last 10 years.

Social media is making an effort to reach these high funnel consumers and that’s exactly the role it should take. But dealers are still spending enormous sums of money in traditional media because, for right now, nothing has proven itself capable of interrupting and intruding as well as they can.

Terry Lancaster is the VP of Making S#!% Happen at Instant Events Automotive Advertising, father of three teenage daughters and a Beer League Hockey All Star, as if there could ever be such a thing. You can connect with Terry on FaceBook, LinkedIn, Twitter and Google+.

Terry Lancaster


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