Auto Advertising Could Pick Up

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By: E&P Staff

There might be some good news on the horizon regarding automotive advertising.

A report released today from Prudential Equity Research notes a surge in new car launches by original equipment manufactures (OEMs) beginning this year and peaking in 2007. In 2007, 56 models will be launched, up from 34 models in 2006.

The “Big 3” — General Motors, DaimlerChrysler, and Ford — announced more new models to hit the floor compared with their foreign counterparts. The Big 3 will peak at 35 models in 2007, up from 19 in 2004, according to Prudential.

The research firm noted that automotive advertising accounted for 10.6% of all measured media in 2004 (or $15.1 billion out of $142.6 billion). If dealerships and automotive-services advertising are thrown in the mix, automotive advertising makes up 15.3% of all measured media.

Prudential expects that network and spot TV will continue to “garner the lion share” of total auto advertising dollars (though that share is declining). In 2004, network and spot TV represented 48% of measured media spending. Newspapers accounted for 15%.

If the category continues to strengthen over the next two years, Prudential said it might raise its overall advertising growth forecast. As it stands now, the firm estimates U.S. advertising growth at 5.1%.

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