insight - Pennsylvania NewsMedia Association

PA Newspapers See
Increases in Auto
Advertising
PAGE 2
Volume 3, Issue 4 March/April 2010
New and Used Car
Shoppers are Newspaper
Readers
PAGE 5
What Draws Customers
to a Particular Auto
Dealership?
PAGE 7
INSIGH T
Marketing and Research Newsletter
PA Auto Dealers Discuss Ad Specifics
by Louella Reynolds, PNA
Bobby Rahal Automotive Group has dealerships in both Central and Western
Pennsylvania. Their multiple locations in Mechanicsburg, Lewistown, and
Wexford offer vehicles from eleven different brands. According to General
Manager Jim Porter of the Mechanicsburg Toyota location, each general
manager is responsible for ad placement for their individual dealerships.
Porter says that the dealerships do not fluctuate their advertising dollars
based on year-end model change or auto shows and stick to a consistent ad
program because repeat ads work best for them. With 15 percent of their ad
budget targeted at newspaper ads, the majority of the remaining 85 percent
of the budget is used in radio and digital billboards, with limited television and
Web ads.
The type of ads Rahal places depends on which line – new or used – it is
targeting to potential buyers. On a consistent basis, the ads are generally
split halfway between the new and used vehicle lines. Porter said that when
manufacturers incentives are lower, the dealerships change their focus and do
more branding ads.
The Brown-Daub dealerships of Northampton County span seven locations
continued on page 3
Page 2
Newspapers
Share
Auto Ad
Information
by Louella Reynolds, PNA
Linda Neupauer, classified ad manager
of the Williamsport Sun-Gazette,
said that the newspaper’s location
(North Central Pennsylvania) limits
the competition among car dealers;
especially since most dealerships
own franchises for multiple brands
and the mom-and-pop dealerships
have dwindled. Therefore, no special
sections are created for auto dealers
and auto ads are placed within the
Sunday edition’s classified section,
which can fill anywhere from five to 10
pages each week.
Auto shows are non-existent in the area
except for an occasional event at the
local mall. When the mall shows take
place, the Williamsport Sun-Gazette
offers a one-page special that highlights
the dealers and brands on exhibit and,
most times, it sees an increase in the
individual/regular auto ads at their
normal ad rates.
Not really seeing any increase in ad
placement at the year-end, modelchange months, Linda said the paper
has seen an increase in auto ads in the
last several months. March and April
are historically stronger months for
auto ads as dealers expect an increase
in traffic with the weather change.
Encouraged by the recent increase
in employment ads, Linda expects
the auto ads to follow suit as area
employment growth gains momentum.
With a recent upturn in economics as
a whole, Janet Pietropaolo, classified
ad manager of The Patriot-News
(Harrisburg), has seen an overall
increase in ads running in her paper’s
classified section. For the last four to
six months, The Patriot-News has been
running its employment, real estate
and auto combined in a single section.
In previous years, a stand-alone auto
continued on page 6
Peak Sales Months for Auto Sales
CALENDAR
MONTH
% OF
ANNUAL
SALES
JANUARY
7.4%
FEBRUARY
7.3%
MARCH
8.3%
APRIL
8.1%
MAY
8.4%
JUNE
8.7%
JULY
9.4%
AUGUST
10.2%
SEPTEMBER
7.6%
OCTOBER
8.3%
NOVEMBER
7.6%
DECEMBER
8.7%
July and August were the peak months for sales at automobile dealers in 2009.
When working with your automotive clients, suggest that they place their ads in
advance of and during this time. You may also recommend that they schedule
promotions or non-traditional activities to maximize traffic and sales during the
slower times.
Source: “Annual Retail Trade Report.” U.S. Census Bureau, 31 Mar. 2010. Web. 13 Apr. 2010.
Reprinted with permission – “© 2010 AdMall and Sales Development Services, Inc.”
Page 3
continued from page 1
and offer 11 brands of vehicles. Based
at the Nazareth facility, Nancy Oakley,
advertising manager for all seven
dealerships, spends about 30 percent of
the company’s ad budget on newspaper
print ads.
Nancy said that as the auto industry
tightened up, so did advertising
dollars, and the company has focused
on a targeted audience that covers
Northampton and Monroe County in
Pennsylvania and Warren County in New
Jersey. With consistent advertising from
Thursday through Monday of each week,
they ‘wrap the weekend’ in ads, reaching
the paper’s largest reader audience.
Automotive Advertising
Planning Cycle
The annual advertising budget for an average auto dealership is
approximately 1.13 percent of retail sales. This amounts to an estimated
ad budget of $105,361 per location for average size new car dealers in
the state of Pennsylvania. To be average in this market, new car dealers
need to spend about $4,639 per employee on advertising every year.
Advertising by local dealerships in 2008 was broken down as follows by
media type:
• Newspapers (23.2 percent)
• Television (18.6 percent)
• Radio (15.3 percent)
• Direct Mail (10.2 percent)
Nancy says that Auto Trader has
helped them get their brands in front
of an audience that normally would not
receive their three-county newspaper
ads.
• Internet (17.2 percent)
Since the year-end model change is no
longer as big a deal as it used to be –
since manufacturers are introducing new
models throughout the year – Nancy
uses the ad budget for a consistent
message about the dealerships’ regular
brand offerings and to promote more
of the ‘unique’ offerings such as the
re-released Chevy Camaro and Dodge
Charger.
• Television - $64,090
Branding ads do not make up much
of the Brown-Daub ad budget, and
Nancy uses billboards for that type of
promotion. Using TV and radio as part
of its ad network, Nancy has also cut
those types of ads in half (from four
radio stations to two) and is targeting a
tighter geographic area.
With the explosion of the Internet, Nancy
uses AutoTrader.com and Cars.com to
reach an audience that is looking for
unique vehicles. She said that BrownDaub recently had a buyer fly in from
Ohio to purchase a vehicle that he found
through the Internet ads.
With auto dealers competing in today’s
tight economic climate, it seems that
newspaper ads still remain a strong
force in hitting their targeted audience.
• Other (15.1 percent)
Specifically, average spending per dealership on media was as follows:
• Newspapers - $79,615
• Radio - $52,361
• Direct Mail - $34,899
• Internet - $58,677
• Other - $51,643
Larger dealerships (selling 400+ new units per year) are slightly more
likely to advertise on television and the Internet. Smaller dealerships
(fewer than 150 units sold per year) spend slightly over 30 percent of their
ad budget in newspapers.
Auto dealers are increasingly using text messaging to advertise their
inventories. Activated by customers, texts include photos, pricing, and
contact information. Dealers are finding that mobile marketing has been
particularly successful with consumers from 18 to 40 years of age.
When it comes to timing an ad campaign, keep in mind that consumers
spend two to three months in the car-buying process. An advertiser can
attract more attention to his or her ad by listing specific selling points in
the ad copy such as:
• Family owned
• Loaners provided
• Factory authorized dealer
• Body shop
• Factory trained technicians
• Pick-up & delivery
• Car locator service
• Towing/road service
• Overseas delivery
• Rust proofing
• State inspection service
Sources: NADA DATA 2009. National Automobile Dealers Association,2009 EASI/Ad-ology Annual Receipts
Analysis based the latest reported data from the IRS, US Bureau of Economic Analysis, and the US Census Bureau,
Automotive News, “Auto Dealers Embrace Text Messaging.” Mary Connelly, June 9, 2008
Reprinted with permission – “© 2010 AdMall and Sales Development Services, Inc.”
Page 4
The
101 of Auto Dealerships
Auto dealerships report revenue from
the sale of new and used cars as well
as from vehicle maintenance and repair.
Financing the lease or purchase of
autos is another revenue source for
dealerships.
The number of dealerships selling
U.S. cars is decreasing as the U.S.
automaker market share continues
to shrink. In 2008, a record 881 auto
dealerships closed across the country,
dropping the total number to 20,084.
However, foreign auto brands and
dealerships such as Toyota and Honda
continue to grow.
Auto dealerships contend with
businesses that sell competing
brands as well as businesses that
sell the same brands at lower prices.
Increasingly, dealerships are building
an online presence and sell vehicles via
the Internet instead of solely through
newspaper, radio and TV advertising.
• Service and parts sales - 14.2 percent
of total sales
In 2008, dealerships accounted for
approximately 40.9 percent of total new
car advertising spending. They invested
an average of $558 per new vehicle sold
on advertising.
An average of 659 new vehicles were
sold per dealership in 2008 along with
an average per-customer-sale of $219
for parts and service. In Pennsylvania,
the average annual sales per location
for new car dealers is $9,324,009.
The decision to purchase or lease a new
car is closely linked to the economic
health of the U.S. and consumer
preferences for vehicle features also
shift as gas prices rise and fall.
Auto sales in 2009 totaled 10.4 million
units. Average dealership sales were
broken down as follows:
• New-vehicle department sales - 57.2
percent of total sales
• Used-vehicle department sales - 28.6
percent of total sales
In 2008, the average selling price for
a new vehicle was $28,350 (down 1.6
percent from 2007), and the average
used car selling price was $15,200
(down 3.3 percent). A 2009 survey
found that 55 percent of Americans plan
to buy their next vehicle in the next two
years.
The automotive market is predicted to
rebound in 2010 and new vehicle sales
are estimated to increase to 11.5 million
units.
Sources: “’09 Sales May Not Reach 12 Million, says NADA.” AutoExec. January 25, 2009; “U.S. sales projected to top 11.5 million next year.” Automotive News. 13, 2009; Market-level Auto Ad
Spending Estimates. Borrell Associates. 2008; Bureau of Labor Statistics; NADA DATA 2009. National Automobile Dealers Association; “Record 881 U.S. auto dealerships closed in 2008: data.”
Reuters. February 19, 2009; Woodyard, Chris. “Auto sales end 2009 with uptick, but year was awful.” USA Today. January 6, 2010, 2009 EASI/Ad-ology Annual Receipts Analysis based the latest
reported data from the IRS, US Bureau of Economic Analysis, and the US Census Bureau, R.L. Polk and Company. April 28, 2009 .
Reprinted with permission – “© 2010 AdMall and Sales Development Services, Inc.”
Enhancing Your Auto Section
The Newspaper Association of America has developed a list of editorial topics you might want to feature in your
automotive section to help boost its impact and readership. They include:
• A synopsis of your local auto market. Is it hot? Cold? What is moving, what is not?
• Interest rates for new and used cars based on FICO scores.
• Taxes and fees that new and used vehicle buyers will be paying.
• Local insurance rates buyers can expect to see.
• Typical local inspection, repair and maintenance costs.
• Local gas prices.
• What local dealers look for in trade-ins.
• News from the local auto enthusiasts’ scene.
• News on the local commuter scene.
• A check list to follow when buying or leasing a new or used car.
Page 5
Newspapers are in the
Driver’s Seat with New
and Used Car Shoppers!
by Jane Hungarter, PNA
The average consumer spends two to three months shopping for a new or used car.
Fortunately, newspapers are one of the top mediums used by this group of shoppers.
According to the most recent Scarborough Research reports, Pennsylvanians who plan
to buy and new or used vehicle in the next year are loyal newspaper readers!
Adults 18+ who plan to buy a new or used vehicle in the next year that
have used selected media in the past week:
Harrisburg/Lancaster/Lebanon/
York DMA – Adams, Cumberland,
Dauphin, Franklin, Juniata, Lancaster,
Lebanon, Mifflin, Perry and York
Counties1
Philadelphia DMA – Berks,
Bucks, Chester, Delaware, Lehigh,
Montgomery, Northampton and
Philadelphia Counties2
Pittsburgh DMA – Allegheny,
Armstrong, Beaver, Butler, Clarion,
Fayette, Forest, Greene, Indiana,
Lawrence, Venango, Washington and
Westmoreland Counties3
Wilkes-Barre/Scranton DMA –
Bradford, Carbon, Clinton, Columbia,
Lackawanna, Luzerne, Lycoming,
Monroe, Montour, Northumberland,
Schuylkill, Snyder, Sullivan, Susquehanna,
Union, Wayne and Wyoming Counties4
Newspapers (read a daily or Sunday newspaper)
166,482
Television (watched morning or evening local news)
149,312
Radio (listened to morning drive radio)
117,296
Online (visited any newspaper Web site)
74,008
Internet (used Internet for social networking)
46,106
Yellow Pages (used Yellow Pages 2 or 3x’s/week)
8,332
Newspapers (read a daily or Sunday newspaper)
423,326
Television (watched morning or evening local news)
479,854
Radio (listened to morning drive radio)
361,452
Online (visited any newspaper Web site)
87,038
Internet (used Internet for social networking)
205,598
Yellow Pages (used Yellow Pages 2 or 3x’s/week)
25,570
Newspapers (read a daily or Sunday newspaper)
257,492
Television (watched morning or evening local news)
262,132
Radio (listened to morning drive radio)
209,722
Online (visited any newspaper Web site)
101,546
Internet (used Internet for social networking)
70,870
Yellow Pages (used Yellow Pages 2 or 3x’s/week)
15,692
Newspapers (read a daily or Sunday newspaper)
186,518
Television (watched morning or evening local news)
162,970
Radio (listened to morning drive radio)
102,346
Online (visited any newspaper Web site)
67,532
Internet (used Internet for social networking)
79,232
Yellow Pages (used Yellow Pages 2 or 3x’s/week)
10,240
Copyright 2010 Scarborough Research. All rights reserved. 1Source: 2009 Release 2 – Apr 09 – Sep 09 – Scarborough Report.; 2Source: 2009 Release 2 – Feb 09 – Jul 09 – PA Counties Only –
Scarborough Report.; 3Source: 2009 Release 2 – Mar 09 – Aug 09 – PA Counties Only - Scarborough Report.; 4Source: 2009 Release 2 – Apr 09 – Sep 09 – Scarborough Report.
Page 6
Page 6
From the Editor
Last month, America East, the Pennsylvania Newspaper
Association’s Annual Technology and Operations
Conference, was held in Hershey, Pa. In addition to the
traditional technology-focused workshops, there were also
many advertising and marketing-themed informational
sessions available for registrants to attend. Whether you
were fortunate enough to be on site during this threeday period or you couldn’t be with us, please take a few
moments to read through the session summaries below.
There is information contained in each that will help you
to develop sound strategies to increase your advertising
sales efforts.
William Childs, creative director at The Morning
Call (Allentown), and a colleague coined the term
“adverpanicking,” to describe the advertiser who feels
the need to add more and more copy points to ads. Visit
http://pna.informz.net/pna/data/images/h&dmarch25/
cuttingthroughtheclutter_jh_.pdf to read more about
adverpanicking and how Childs says you can avoid it.
According to Ed Efchak, managing partner for
Customers by Design, LLC., newspapers are guilty of
seven deadly sins that, if not corrected, can lead to
the loss of public trust, loyalty and the ability to fulfill their
democratic mission. Visit http://pna.informz.net/pna/data/
images/h&dmarch25/sevendeadlysins_jh_.pdf to see how
your publication can stay on the right track.
Despite the decline in the economy, some newspapers have
seen an increase in classified revenues. A panel discussed
innovative programs and partnerships that worked for them.
Visit http://pna.informz.net/pna/data/images/h&dmarch25/
whatrecession_me_.pdf to learn more.
Jim Ottinger, sales training specialist, and Taryn Jory,
manager of advertising research, of The Morning Call
(Allentown), shared some effective sales strategies used
by their newspaper. Visit http://pna.informz.net/pna/data/
images/h&dmarch25/sellingagainstthecompetition.pdf to
see what you can implement.
continued from page 2
section was offered by the paper on Wednesday
and Sunday of each week, but because of the
state of the economy, it has been reduced to a
single offering on Sunday.
When Harrisburg holds its yearly auto show, The
Patriot-News runs a special tab for dealers to
showcase their offerings. This year, in an effort
to simplify the process for dealers, The PatriotNews offered modular set sizes with set prices.
With a multitude of dealers in the Harrisburg
area, Janet said the paper sees competitive ads
on a consistent basis with no real fluctuations in
the fall when the new models are introduced.
Janet stressed that partnering with the
dealerships through the latest economic times,
offering restructured ad rates and online ad
opportunities has kept the auto dealerships
coming back to The Patriot-News for their print
ad needs.
Sell
™
Smarter!
PROSPECT
DIAGNOSE
TARGET
FINANCE
PRESENT
SELL!
$
Jane Hungarter
Vice President of Marketing
& Revenue Development
Pennsylvania Newspaper Association
AdMall.com | 877-4-ADMALL
@MediaSalesToday
YouTube.com/AdMallTV
Page 7
Why Shoppers Choose a Car Dealer
by Jane Hungarter, PNA
There are many auto dealerships across Pennsylvania for car shoppers to choose
from, so Scarborough Research recently surveyed new and used car buyers to
determine what it was that attracted them to a particular dealership.
When new and used car buyers, age 18+, were asked what the primary reason was
that they used a particular dealership, the responses included:
Primary reason household selected
dealer for last car purchase:
Harrisburg/
Lancaster/Lebanon/
York DMA – Adams,
Cumberland, Dauphin,
Franklin, Juniata,
Lancaster, Lebanon,
Mifflin, Perry and York
Counties1
Philadelphia DMA
– Berks, Bucks,
Chester, Delaware,
Lehigh, Montgomery,
Northampton and
Philadelphia Counties2
Pittsburgh DMA –
Allegheny, Armstrong,
Beaver, Butler, Clarion,
Fayette, Forest, Greene,
Indiana, Lawrence,
Venango, Washington
and Westmoreland
Counties3
Wilkes-Barre/Scranton
DMA – Bradford, Carbon,
Clinton, Columbia,
Lackawanna, Luzerne,
Lycoming, Monroe,
Montour, Northumberland,
Schuylkill, Snyder,
Sullivan, Susquehanna,
Union, Wayne and
Wyoming Counties4
NEW
USED
Price-value
328,910
333,146
Selection of makes/models
295,636
144,082
Reputation of dealer
286,430
174,344
Location of dealership
183,120
101,524
Service
159,412
71,474
Warranty
102,432
62,128
Financing through dealer
87,082
42,634
Price-value
1,194,706
627,116
Selection of makes/models
659,288
287,800
Reputation of dealer
832,930
346,742
Location of dealership
843,520
215,130
Service
533,900
171,096
Warranty
342,958
129,474
Financing through dealer
348,716
87,318
Price-value
520,946
411,842
Selection of makes/models
328,088
204,956
Reputation of dealer
426,312
224,230
Location of dealership
343,812
171,002
Service
268,200
112,938
Warranty
149,266
98.486
Financing through dealer
130,436
93,722
Price-value
270,198
301,180
Selection of makes/models
214,754
107,460
Reputation of dealer
190,650
172,772
Location of dealership
173,052
136,014
Service
128,170
66,724
Warranty
105,474
33,624
Financing through dealer
77,232
42,970
Copyright 2010 Scarborough Research. All rights reserved. 1Source: 2009 Release 2 – Apr 09 – Sep 09 – Scarborough Report.;
2
Source: 2009 Release 2 – Feb 09 – Jul 09 – PA Counties Only – Scarborough Report.; 3Source: 2009 Release 2 – Mar 09 – Aug
09 – PA Counties Only - Scarborough Report.; 4Source: 2009 Release 2 – Apr 09 – Sep 09 – Scarborough Report.
Page 8
What
Are Auto
Buyers
Looking
For?
Newspapers Influence
Auto Buyers
A 2008 study found that while
consumers are interested in
a variety of features for their
cars, price plays a big role in
their likeliness to install. The top
features U.S. drivers are most
interested in include:
• Blind spot detection 76 percent
• Backup assist - 74 percent
• Navigation system 73 percent
• Active cornering headlight
system - 73 percent
• Hybrid electric capability 72 percent
• Premium surround sound 67 percent
• Heated/cooled front seats 67 percent
• Central control unit 67 percent
• Personal assistance safety
services - 65 percent
Information and advertising from newspapers, magazines and television are
the traditional media types that most influence U.S. adults who have recently
purchased (or helped to purchase) a new or used vehicle in the past two years,
according to the September 2009 Ad-ology Media Influence on Consumer
Choice survey.
Reprinted with permission – “© 2010 AdMall and Sales Development Services, Inc.”
• Portable navigation device 65 percent
Source: J.D. Power & Associates, 2008 U.S.
Automotive Emerging Technologies Study
Reprinted with permission – “© 2010 AdMall and
Sales Development Services, Inc.”
Tim Williams, President, [email protected] 717.703.3060
Jane Hungarter, Vice President of Marketing and Revenue Development, [email protected] 717.703.3041
Lisa Knight, Vice President of Advertising Sales, [email protected] 717.703.3043
Kevin Wert, Director of New Business Development, [email protected] 717.703.3049
Matthew Caylor, Account Executive, Interactive, [email protected] 717.703.3040