Auto dealers large and small will eliminate $800 million worth of print advertising from U.S. newspapers next year, according to a new industry forecast, accelerating their media rush onto the Internet.
Media-trends monitor Borrell Associates of Williamsburg, Va., forecasts that dealers will spend $2.14 billion on newspaper ads in 2015, down 27 percent from the $2.94 billion they are predicted to spend with newspapers in 2014.
The decline will occur as U.S. dealers increase their total ad spending by 7 percent to $22.7 billion next year, Borrell forecasts.
Retailers long have been shifting away from so-called legacy advertising media, including newspapers and radio, as consumers flock to online information-gathering media.
But manufacturers are now causing a more abrupt transition through recent changes in their co-op advertising policies, reports Kip Cassino, Borrell executive vice president and chief author of the forecast.
"The auto manufacturers want retailers to be online, and they want them to make the move faster," Cassino says.
Late last year, Ford Motor Co. implemented its "Digital First" advertising program, which required dealers to have 25 percent of their ad purchases in digital media by Jan. 1, 2014, to qualify for co-op funding.
Ford said half of purchases must be online by July 1 to qualify for the funding.
In comparison with Borrell's forecast of a 27 percent decline in 2015, retailers decreased their newspaper print advertising by just 6.3 percent this year, 6 percent last year and 2.3 percent in 2012.
Meanwhile, online advertising spending by car dealers will increase by 25 percent next year to $15.1 billion, the forecast says.
Borrell predicts that a number of other traditional media also will see advertising dollars decline next year as retailers push more dollars online:
- Broadcast TV will take in $1.3 billion, a decline of 11 percent from this year.
- Dealer direct-mail spending will fall 5 percent to $990 million.
- Telemarketing spending will decline 7 percent to $404 million.
