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Local Broadcast Television – A Designated Sales Driver?

It looks like America’s love affair with cars is heating up again.

The news coming out of Detroit is that auto sales for 2011 are set to rise 10% over 2010 (“Kia, Chrysler, VW Set Pace as Dec. Sales Advance 9%”, Automotive News, Jan. 4, 2012, “Vehicle sales for 2011 near 13M units”, Detroit News, Dec. 31, 2011). With an estimated 12.8 million vehicles sold in 2011, it would be the best year for car sales in the US since 2008.

Interestingly, many of the manufacturers that posted large gains this year also increased their Spot Television spending. We took a look at the latest Kantar media spending data that is available (October 2011), and as it turns out a correlation can be made between Spot Television and auto sales. Granted, there are a number of factors that influence car purchases, yet there is a pattern that emerges that connects Spot Television to automobile sales across many leading brands.

Chrysler, looking likely to end the year with a 26% bump over 2010, showed an identical 26% sales increase in October 2011 vs October 2010. While they showed a higher media spend in general, they increased their Spot Television budget by a whopping 72%.

Ford produced 13% more sales of cars and light trucks versus October 2010 while cutting spending significantly across all media other than Spot Television and Spanish Language Television. They increased their spending in Spot TV by 44%, which accounted for 30.6% of their media buy in October.

There was also a marked increase for Volkswagen in October as they nearly quadrupled their investment in Spot Television – which produced a 40% better October for them than last year.

Furthermore, Hyundai-Kia showed the most aggressive reallocation in October, as they invested more money in Spot Television than in any other medium – 27% more than they spend in Network Television. The result was a 22% year-over-year increase in sales.

Even with all of the other factors being considered, the data shows that there is indeed a correlation between increased Spot TV spending and increased sales. And why wouldn’t there be? Where is the actual consumer connection to their new car purchase? At the local dealership. So anything that helps spread that message has got to help the manufacturers’ bottom line.

Because it’s at the local dealership that the consumer’s rubber will eventually meet the road.

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