Automakers reduced their spending on measured media last year by 8.1 percent to $7.7 billion, compared with the $8.4 billion they spent in 2000, according to Competitive Media Reporting in New York.
The country's largest advertiser, General Motors, slashed its spending by 25 percent, CMR reported. GM said its advertising did not drop that far and that it shifted national money into local advertising.
Meanwhile, dealers increased their spending on advertising by 3.7 percent, to $6.6 billion, says the National Automobile Dealers Association.
CMR's spending numbers verify a trend: Many automakers are favoring local and regional advertising over national advertising, and they are teaming up with their dealers to reach customers. As a result, the $1.1 billion gap between dealer spending and factory spending is the narrowest it ever has been.
CJ Fraleigh, GM's executive director of corporate advertising and marketing, says if Competitive Media Reporting's numbers included GM's local spending, it would show different results.
"Our spending was down slightly, in the single-digit range," Fraleigh said. "Maybe they (Competitive Media Reporting) don't pick up local spending like they do national. We did have a big shift to local spending to support dealers. We plan a lot of our media now with our dealers, and our dealers put a lot of money into the pot as well."
Little change expected
Automakers expect to spend about the same this year, and dealers will spend slightly more.
Automakers made significant shifts in the media they used. GM, still the biggest spender at $1.8 billion, made cuts in every medium, while DaimlerChrysler, the No. 2 spender at $1.4 billion, cut all media except national and local newspapers.
The cuts may have been steeper had it not been for 0 percent financing in the fourth quarter. GM nationally funded the marketing of 0 percent financing. The company had spent 32.5 percent less on media going into the fourth quarter compared with the first nine months of 2000.
Total factory media spending also picked up in the fourth quarter to support national incentives. For the first nine months of last year, spending had been down 12.6 percent.
TV, the favored media of automakers, took the biggest hit last year, down across the board, except for cable. Including broadcast network, spot, syndicated and cable, marketers spent $5.2 billion on TV, compared with $5.9 billion last year. Spot or local TV took in the most money among all media - $2.2 billion - but suffered a 19 percent decrease, compared with a 6.8 percent decrease for broadcast network, which garnered the second highest pot of money at $2.1 billion.
National newspapers jumped 24.6 percent, to $205.3 million. Magazines, which suffered a decline from 1999 to 2000, saw their billings rise to $1.5 billion, a 2 percent increase.
Fraleigh said he couldn't explain the drop in spot TV since spot is a local medium.
"We had double-digit increases in spot," he said. "They (Competitive Media Reporting) usually don't factor out a dealer ad versus one of our ads."
Asians pick up slack
Of the top five spenders, only Ford Motor Co. and American Honda Motor Co. increased their corporate ad spending. Ford Motor raised spending by 7.7 percent, to $1.1 billion. Ford boosted Jaguar more than its other brands, up 23 percent to $72.1 million. Ford Division spent $565.3 million last year or 10.6 percent more than in 2000 to support the Explorer relaunch. Honda raised spending 1.8 percent to $591.2 million.
Joining GM in spending cuts were DaimlerChrysler, which slashed ad spending in 2001 by 17 percent, to $1.4 billion, and Toyota, which trimmed spending by 0.8 percent, to $734.7 million.
But other Asian automakers picked up the slack. Kia Motors America Inc. led the pack with a 126.1 percent increase in spending, followed by American Suzuki Motor Corp., up 63.7 percent; Isuzu America Inc., 59.8 percent; Hyundai Motor America, 40.9 percent; and Mazda North American Operations, 30.7 percent. But the combined spending of those five companies totaled only $650.3 million, less than the top-spending brand, Chevrolet, at $780 million.
Regarding the $204.5 million Kia spent last year, Rick Weisehan, Kia's director of marketing, said Competitive Media Reporting's numbers are 20 percent to 50 percent too high.
"Our ad spending went up from the previous year because we had to launch some new models: the Optima in February, the Sedona in August and the Spectra in November," he said. "Whenever you launch a vehicle, you allocate more money than you normally would."
Weisehan said Kia will spend more this year, but he declined to specify how much.
"We have to launch a new model in September, the Sorento SUV," he said. "Our biggest challenge is that we have some aggressive sales plans in a market due to decline 1 million to 2 million units, and we have to conquest sales from somebody else. Our ad spending will have to be more than 2001 to increase sales."