Automotive advertising is headed for its lowest level in nine years, even as more money is shifting from TV and print media to the Internet.
The downturn is the result of efforts by automakers and dealers to cut expenses in a soft market.
This year, automakers and dealers will spend about $15 billion to advertise in U.S. media, the Wall Street research firm Sanford C. Bernstein & Co. estimates in a new report.
That's down 16 percent from 2007 and the lowest total since 1999, says Bernstein senior analyst Michael Nathanson.
Bernstein Research projects that auto advertisers will spend an average of $1,057 for every new vehicle sold in 2008,down 19 percent from the peak in 2004.
"TV stations and local newspapers will lose the most advertising dollars, followed by broadcast networks," Nathanson predicts.
In the first three months of 2008, according to a separate study by TNS Media Intelligence, car companies and dealers spent about $3.63 billion on U.S. advertising. Automakers accounted for 54.7 percent of that spending, compared with 29.9 percent by dealerships and 15.4 percent by dealer associations.
Compared with the year-ago quarter, TNS says, factory ad spending dropped 14.5 percent, while dealership spending declined 6.8 percent and dealer association spending fell 4.1 percent.
In July, General Motors said it plans to reduce its ad budget by an undisclosed amount. Last year, GM spent $2.1 billion on U.S. advertising, TNS estimates. The company cut its ad spending by nearly $1 billion from mid-2005 through 2007, TNS says.