MediaPost quotes Borrell Associates report: Auto ad spending on the rise

"According to a new report from Borrell Associates monitoring the pulse of local ad spending by U.S. auto dealers, dealer associations, and manufacturers, US auto manufacturers will increase their online local ad spending by 14% in 2010, while new- and used-car dealers will increase their ad spend online by 8.6%. The total effect will result in an 11.4% increase in new-vehicle online ad spending next year.

Overall, Borrell Associates predicts that US ad spend for new cars will rise to a total of $19.2 billion from the low of $18.4 billion in 2009, experiencing a 4% growth rate across all media. These numbers represent declines from 2008 spending, following a precipitous drop in automotive ad spend of 31% in the first half of 2009, during which Chrysler and GM declared bankruptcy and the recession forced a significant decline in new auto sales."

See the MediaPost Research Brief here: http://www.mediapost.com/publications/?fa=Articles.showArticle&art_aid=117858

George
Media Services Group

Borrell Presentation at Virginia Association of Broadcasters

I attended a presentation made by Gordon Borrell of Borrell Associates (http://www.borrellassociates.com/) at the Virginia Association of Broadcasters convention this weekend. The foundation for Borrell's research is "following the money;" they determine how much local advertisers actually spend in local interactive media.





According to Borrell, the local interactive market is $12.7 billion and showing explosive growth. The market is shared as follows:



Pureplay - 47.6%


Newspapers - 26.4%


TV - 8.6%


Radio - 2.2%



Display ads are not fairing particularly well, peaking last year at $6.5 billion. The growth categories include email, search (directories), and video.



Borrell stated his premise that the Internet is "more a commerce medium than a news medium." He also is of the opinion that "Yellow Pages and direct mail are in free-fall."



Legacy media companies are growing at 19.2%, while the pureplays are growing at only 1.9%. Examples of 2008 online revenue growth rates for local media companies include:



Nexstar Broadcasting - 100.0%


LIN TV - 61.0%


Gray Television - 24.8%


Belo Corp. (TV) - 23.0%


Gannett (TV) - 13.0%


Media General Interactive - 7.7%



Radio broadcasters generated 2.4% of their 2008 gross revenue from local interactive (though Emmis Broadcasting did 5.1%, clearly ahead of the curve). TV broadcasters did 3.4% of their revenue from interactive.



In markets 1 - 20, TV did an average of $1,365,505, while markets 101 - 210 averaged $266,663.



Using Hampton Roads as a sample market, internet usage in the past month broke out as follows:

• Sent/received email - 60.5%


• Got weather reports/information - 32.7%


• Got news - 28.4%


• Paid bills - 27.5%


• Downloaded music/listened to audio clips - 17.7%


• Made travel reservations - 17.1%


• Got Financial information/services - 16.6%


• Looked up movie listings - 16.5%


• Used Internet yellow pages - 16.2%


• Used Instant Messageing - 15.9%

Borrell stated that the average interactive sales rep bills $250,000; more sales reps = more revenue.

It was an interesting presentation, providing a good glimpse into the bright future for local interactive sales if the broadcasters will jump on the bandwagon. Thanks to Gordon Borrell for providing the information, and the Virginia Association of Broadcasters for the forum.

George