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A Case For America’s Auto Dealers To Increase Their Radio Advertising.

With car sales on the rise – the National Auto Dealers Association expects new vehicle sales to grow 7.2% to 15.5 million units this year – a host of new and recent research gives radio sellers a compelling case for how radio can help dealers move cars off their lots.

For starters, Nielsen reports one-third of heavy AM/FM radio listeners intend to make an auto purchase in the next year, which is 18% greater than heavy TV viewers. Reinforcing the importance of adding broadcast radio to the TV plan, 40% of U.S. new car buyers are impossible to reach on TV, according to Nielsen’s Scarborough qualitative service.While 60% of auto intenders are heavy TV viewers and can be reached by linear TV, two out of five auto purchasers cannot be sufficiently reached by TV.

These and other findings are compiled by Cumulus Media Chief Insights Officer Pierre Bouvard in a new post on Westwood One’s “Everyone’s Listening” blog. Long used by auto dealers as a cornerstone in their media buys, the research suggests local TV may be running out of gas. “Plunging cable penetration and the rise of commercial-free streaming TV platforms makes it much more challenging to reach auto intenders on TV,” Bouvard says in the post.”

Data from Nielsen’s recently released Total Audience Report reveals one out of four persons 25-54 cannot be reached on linear TV.” Linear television’s weekly reach among persons 25-54 dropped to 77% in third quarter 2020 from 85% in Q3 2018, while AM/FM radio’s weekly reach among persons 25-54 is a much stronger 89%.

One of the biggest changes dealers face right now is a shortage of inventory on their lots, due to supply chain issues caused by the pandemic. That has raised the client objection of why advertise when supply is tight? “We hear this from auto dealers,” Bouvard says. “Cutting advertising because auto inventories are tight implies that all the effect of advertising is in the immediate short term.” In reality the greatest effect of advertising occurs over the long term, he contends. According to marketing mix modeler Gain Theory, only 18% of the impact of current advertising occurs this month.

Proving Impact

Bouvard also reminds readers of one of the largest studies ever conducted on automotive radio advertising. On behalf of iHeartMedia, marketing attribution software company LeadsRx analyzed the impact of radio advertising over 17 months for more than 300 automotive advertisers, across nearly 2 million commercials and all major automotive brands. The 2019 study found that radio generates immediate web traffic response for automotive advertisers. Automotive advertisers enjoyed a 17% lift in web traffic, on average, that was attributable to radio marketing. The study found the web traffic response is within 10 minutes of hearing a commercial.

Reach and frequency were cited as the top factors for successful radio marketing. In short, it’s about the number of people who hear an ad—and the number of times it’s heard. The report found real advertiser value kicked in at just 10 commercials, with those marketers alone seeing a response rate that’s a whopping 120% above their competitors who air fewer than 10.

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