Political ads push dealerships out of TV, radio
Campaign demand sends prices soaring
Earl Hesterberg of Group 1: TV and radio ad spending is down, and the political season is speeding up the trend.
The presidential election will push many dealerships off the airwaves this fall.
With political campaigns snapping up prime TV and radio air time early -- and driving up prices for those spots -- auto retailers such as Asbury Automotive Group are shifting advertising spending to other media. The money will go to online advertising, search engine marketing and local promotions and events.
"You cannot compete on radio and television with the politicians," Asbury CEO Craig Monaghan said. "We will be on the Web in a big way, and strategically that's the direction we've been moving anyhow."
Asbury, the nation's seventh-largest dealership group, started to see the shift in July. Florida, where Asbury has stores, already is saturated with political advertising, COO Michael Kearney said. Radio and TV exposure for Asbury's 79 dealerships will continue to decrease leading up to the election.
Asbury executives declined to disclose the dealership group's 2012 advertising budget and what percentage is dedicated to TV and radio.
Lithia Motors Inc., the nation's ninth-largest dealership group, also plans to move more advertising online. Store managers make their own advertising decisions, but the shift from TV and radio is typical during election years, Lithia CEO Bryan DeBoer said.
Lithia is putting a bigger percentage of total advertising dollars into online ads every month, DeBoer said. The stores can track the benefits of online ads easier than those of TV and radio spots.
"I know we're spending twice as much online than we did two years ago, which means it's growing at 40 to 50 percent a year," DeBoer said.
Group 1 Automotive Inc. CEO Earl Hesterberg says his stores don't advertise that much on TV and radio anymore. Where they do, managers have moved to buy time early or are moving the ad spending online.
"We fine-tune it pretty well," Hesterberg said. "It's there. It's a factor of doing business, but it isn't anything new."
Group 1, the nation's fourth-largest dealership group, also is shifting more money into digital media every year, Hesterberg said.
Penske Automotive Group Inc., the second-largest U.S. dealership group, began shifting its advertising from TV some time ago, a spokesman wrote in an e-mail.
AutoNation Inc., the country's largest dealership group, says it won't be getting off the airwaves. The company negotiated competitive rates even during the lead-up to the election.
"We do upfront buying at the beginning of the year, and we planned all year knowing it was going to be a tight market," AutoNation COO Michael Maroone said. "We got excellent rates in the last quarter. The stations need you 12 months of the year, not three months of the year."
Jamie LaReau contributed to this report
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