TV's Car Ride Will Be Smoother In 2010

There was a time, not too long ago, when more than 16 million cars and light trucks were sold in the United States each year. That volume of vehicles and dollars generated a lot of advertising, much of which showed up on TV stations.

But when the recession and the credit crunch hit with full force in 2008, vehicle sales plunged and so did auto advertising.

The loss of that advertising contributed heavily to the 25 percent revenue decline that the TV station business is expected to post when it closes the books on 2009.

But the good news, say the experts, is that the auto sales -- and auto advertising -- has hit bottom.

Among those experts is Gene Cameron, vice president, auto marketing/media solutions at J.D. Power & Associates. In this interview with TVNewsCheck Editor Harry A. Jessell, Cameron says that auto sales will rebound 15 percent in 2010 and that TV will continue to hold its place as a vital component of auto marketing plans. The big change is that instead of driving consumers to showroom floors, he says, TV's job is to drive them to manufacturer and dealer Web sites.

An edited transcript:

There's a one-to-one correspondence between new vehicle sales and how much is being spent on auto advertising. In light of that, can you tell me how many cars are going to be sold next year?

We're predicting we'll see about 11.6 million new vehicles sold next year. It's about a 15 percent increase over this year. We're seeing this year ending at about 10.3 million units.

And how long before we get back to the good old days of 16 million or 17 million vehicles sold?

Five years out, we might be in the 16-million range again. There are demographic factors that are creating more buyers, more drivers, but it's going to take us a while to get there.

What is driving the 15 percent growth in 2010? Is it just the improving economy?

It's the improving economy, but it's also a lot of new model introductions. The manufacturers are responding to consumer demand for smaller, more fuel efficient cars. They're also better priced.

Are there going to be an unusual number of new models, major upgrades next year?

Yes. We see a very heavy list of introductions in 2010. We see at least 13 new models coming out in the first half of the year, 14 in the second half. We think it's going to bring people back to the market.

What's the current conventional thinking about how to market cars and light trucks these days?

The dominant shopping mode is on the Internet. Our data shows 76 percent of all new vehicle buyers shopped on the Internet for their vehicle before purchasing it and so auto marketers are focusing a lot of attention on the Internet activity.

What we see auto marketers trying to do is develop integrated cross-media platform programs so that the media will work together. It isn't just a choice between TV and Internet, for example. It's a way to integrate those two so your investment in television and your investment in online work together to produce a more effective result. That's what we see as a trend.

Does that mean they're taking money out of the legacy media -- newspapers, television -- to do more online?

We have seen reductions in newspapers and magazines, but not so much in television. Television is still highly regarded by the auto marketers and so we don't expect television to be displaced any time soon.

And why are they abandoning the newspapers and the magazines?

There are several reasons. One is where the customers are going. I'm certain it's no surprise to your readers that newspaper readership is way down. Magazine readership has held up, but neither of those media are as accountable or as trackable as the Internet, which has great appeal to the marketers.

What's the magic of television? Why is it holding up?

You can present the visual appeal of the product and you can have that product in motion. So, in terms of explaining the product and presenting it in an appealing way, television is very powerful.

So the idea is to use television to sell the brand -- the idea of the car -- and then use the Internet to close the deal?

That's a good metaphor for how it works. We talk about the purchase funnel. You have to get on the consideration set and television is a great medium for that, for getting your model considered, but, then, people want to know more facts. They want to know MPG, they want to know the functionality and that's when they go to the Internet.

I get that. What about the dealers?

They're very active on the Internet, too. Dealers have a Web site of their own. Often times that site is supported by the OEM because they want that dealer to have an active and functional site. In many cases, they will provide inventory [for the sites] so that consumers can find exactly the vehicle they want, where it is and what the price it will be.