Automotive advertisers underpin Australian media as other advertisers fall away data reveals

Growth in the Australian advertising sector is being underpinned by the automotive industry, with TV and digital relying heavily on car makers for revenue as other sectors fall away, new Standard Media Index figures have revealed.

SUVs are driving growth in auto ad spending

And growth in the auto category is been driven by a massive shift in spending towards SUVs as more car makers turn their focus away from small vehicles and large cars.

Speaking at the Mumbrella Automotive Marketing Summit in Sydney, SMI Australia and New Zealand managing director Jane Schulze said media owners owed the cart industry a debt of gratitude for helping to sustain growth in ad spending where almost all sectors other than supermarkets were reducing spending.

“Advertising ad spend is extremely robust,” Shulze said.

“It really is underpinning a lot of the media market at the moment.When I said earlier that in the first half of the year the market was back a bit, it would be back a heck of a lot more if it wasn’t for the automotive advertisers and the other big driver of adspend at the moment, supermarkets.

“If it wasn’t for your increased spend the market would look at lot worse.”

Jane Schulze said media companies have the car sector to thank for sustaining advertising growth

Schulze said the overall figures disguised some major shifts in focus for car makers.

“While autobrand is still one of the fastest growing categories and still the largest category by far in the whole Australian media market there is a lot of different ecosystems below the surface,” Schulze said.

“You can see most of the growth in automotive is out of the SUV category.”

Looking at Q2 of 2016 compared to Q2 of 2017, SMI data collected from media agencies showed spending on SUV advertising had jumped 86.1% year-on-year from $22.2m to $41.4m, while spending on advertising for medium and large cars had dropped 26.3%.

Breaking down the media spend across the board, car makers spent 44.1% of media budgets on TV, slightly over-indexing compared to the total market, while 28.2% went to digital and 10.8% to outdoor.

Print newspapers, once a mainstay of the industry, attracted just 3.8% of the spend, although Schulze noted that some of the loss was being captured by brands spending through news organisation’s digital sites.

Ben Sullivan, group director of insights and innovation at Potentiate, told the Summit there was a fundamental shift underway in what Australians were buying – driven in part by the rise of the SUV and sales with older whose purchase was guided by “Hips and knees” – or cars that were easier to get in and out of”.

“After watching this for quite some time I haven’t seen changes quite this rapid, certainly not in the first decade of my time here,: Sullivan said.

“In 2017 there are considerably more SUVs than cars in the marketplace.”

He said that the small car share of the market had dropped from 25% of the market to under 20% last year, while SUVs now represented 42%.

Sullivan also warned that a a traditional purchase process that car makers had become used to no longer existed.

“There is no such thing as a purchase process,” he said.

“People are moving in and out of the online and offline and can disappear completely. Make sure all of you channels are ready for all sorts of usages at all times.”



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