Radio's been in a long-term relationship with cars for nearly a century – an arranged marriage that has worked out quite nicely for both industries. But as broadcasters have learned in the past decade, in-car media systems are changing the equation.
AM/FM radio listening in cars is still the #1 audio choice, but our Techsurveys (and other research in the space) clearly show its dominance in the dash has been diminished. That presents a challenge to radio program directors in markets big, medium, and small. Creating great in-car content that connects with auto commuters and soccer moms and dads on weekends has become exponentially more complicated in new connected vehicles.
And now a new Borrell study – “2018 Outlook: Automotive Advertising Takes A Sharp Turn” – indicates that all's not well in radio's sales cubicles when it comes to automotive revenue.
Actually, overall automotive ad spending is projected to go down across the board – and newspapers and local TV are pegged to be the big losers. The print shops in your town could take a 46% haircut, while the broadcast TV stations are bracing for a 38% bath. AM/FM, by comparison, is only looking at about a 10% hit – still not a good omen in an already challenging year.
While it's pretty bleak for just about every advertising platform, online continues to be the outlier, projected to shoot up nearly 9% in an otherwise dismal year.
If you were at our DASH Conferences back in 2013-15, you saw a preview of this horror show. The ups and downs of the auto industry are cyclic and somewhat predictable. Like most businesses, car and truck sales move in waves – and the last several years have been very, very good for most automotive manufacturers. Until now.
At the corporate level, manufacturers have shifted their marketing focus to so-called accountable advertising that delivers actions, rather than eyes and ears. And even most local dealerships have re-deployed their ad dollars to a bigger share of digital marketing, where many feel there's better ROI.
The automotive industry isn't a laid-back Sunday drive for those at the very top, or those in local markets. The OEMs – car manufacturers – are dealing with disruption from Uber, Lyft, and other smart mobility options. More and more Americans will conclude in the coming years they don't need to pay $30,000 for a depreciating investment that sits in driveways, parking lots, and garages 97% of the time. The realities of selling fewer cars to Millennials and Gen Zs who would rather spend their money in other places has hit home. And I haven't even mentioned autonomous cars.
Then there's your local car dealership, always a dog-eat-dog business. They've watched their margins slip as consumers become better educated thanks in no small part to the Internet. When you can walk into your local car store and know the dealer's invoice price, it makes for a much easier negotiation for consumers, and a headache for car salespeople.
Remember Jerry Lundegaard, the hapless, harried car salesman in “Fargo,” played by the incomparable Bill Macy? His miserable life would be acutely more painful in today's scenario where online car buying is becoming more commonplace.
CarMax, TrueCar, Carvana and others have become popular ways for more and more consumers to take the aggravation, angst, and hassle out of purchasing a car.
When you can buy, sell, trade, and return cars as easy as buying diapers or vitamins on Amazon Prime, it's a whole new ballgame for local car dealerships facing steep legacy expenses, not to mention the cost of real estate, car and truck inventory, service, and sales.
It's a lot more exciting and fun to buy a car from a vending machine – a clever, buzzworthy way Carvana has cleverly disrupted an industry long in need of disruption.
But somehow, consumers still need to connect with car brands. How else are they going to know the make and model of the vehicle they're lusting after? Transactional buying, and selling cars online does little to plant those seeds of desires in the minds of drivers.
That's why car manufacturers are continuing to work with their stressed-out ad agencies to produce creative that can effectively connect with different generations of car buyers.
Whether it's Boomers or Millennials, building brands in an overly cluttered marketing environment is no easy task. It's one thing when you're an established name like Ford, Toyota, Chevy on the one end, or Audi, Lexus, and Mercedes-Benz on the other.
But what about when you're Acura – very much like the #3 Rock station in town? How do you make a strong statement about your auto brand, what it stands for, and the feelings it evokes?
It's simple – you turn to the greatest rock n' roll band in the world for the familiar soundtrack. And in Acura's case, they're using the Rolling Stones on two very different creative approaches that speak to diverse lifestyles and emotions – thanks to the multi-generational appeal of Classic Rock.
It's like the agency got a group discount from Mick and Keith. And that might explain why there's one Acura commercial that goes all the way back to the 60s, and the Stones' classic, “She's A Rainbow.” The RDX ad is aimed directly at mom, enjoying the luxury of a shiny new SUV, awash with a warm, familiar classic.
And the second half of Acura's Stones twofer utilizes “Sympathy For The Devil” – but not the original version. Instead, they've gone into the recurrent category to dust off Motorhead‘s cover of that classic – an ad that's going after the macho consumer who would never dream of driving like this on the way home from work. But it's nice to know your SUV can do these things, right?
And Acura's advertising the very same vehicle – the RDX. But now, it's not an SUV for parents schlepping kids around on the weekend. It's a full-bore, performance hybrid suitable for any guy trying to make a statement.
Can this bifurcated targeted advertising approach work in this fickle, disrupted car economy for a brand that's always struggled to find its personality?
Don't bet against Classic Rock.
Tomorrow, we'll dig deep into music lyrics to determine which music genre features the greatest number of song lyrics about cars. Rock, Hip-Hop, Country – or a different format?
AND there will be no shortage of car questions in Techsurvey 2019. Registration and info are available here.
Jacobs Media has consistently walked the walk in the digital space, providing insights and guidance through its well-read national Techsurveys.
In 2008, jacapps was launched - a mobile apps company that has designed and built more than 1,200 apps for both the Apple and Android platforms. In 2013, the DASH Conference was created - a mashup of radio and automotive, designed to foster better understanding of the "connected car" and its impact.
Along with providing the creative and intellectual direction for the company, Fred consults many of Jacobs Media's commercial and public radio clients, in addition to media brands looking to thrive in the rapidly changing tech environment.
Fred was inducted into the National Radio Hall of Fame in 2018.