Radio Plays Critical Role in Automotive Advertising
A compelling new study published by the Southern California Broadcasters Association (SCBA) and Nielsen Audio reveals that AM/FM radio’s influence over new- and used-vehicle buyers continues to grow in Southern California.
The Automotive Path to Purchase Study, based on a survey of nearly 3,000 vehicle buyers in Southern California, finds that at least 93 percent of new- and used-vehicle buyers listen to AM/FM radio, more than those who spend time on the Internet or watch broadcast television. In Los Angeles alone, radio each week reaches an audience of 3.8 million people who plan to buy a new or used vehicle in the next 12 months, equating to approximately $72 billion in planned vehicle purchases.
The study indicates that radio does more than reach the vehicle-buying audience; radio significantly influenced their purchase decision. For example, automotive ads on the radio help 74 percent of “undecided” buyers in Los Angeles choose what vehicle brand or model to buy, compared with 67 percent of “undecided” buyers who are influenced by television ads.
“This is new and compelling information about broadcast radio’s unparalleled ability to reach and motivate auto buyers,” said Thom Callahan, president of the SCBA. “Car sales thus far in 2017 have plateaued, which means automakers and dealers have to work hard to sell cars in an ultra-competitive market. In the highly competitive nature of today’s auto industry, now more than ever, auto advertisers should use broadcast radio to make a greater impact with auto buyers.”
The automotive research study also draws significant comparisons regarding the influence, income, employment status, and age groups of the customers to other media such as television, digital, and websites. In each case, radio listeners exceeded the ideal profile of auto buyers significantly.
The study also reveals the amount dealers and dealer associations spend on radio is significantly less than what they spend on television ads. According to Nielsen, $41.5 million was spent on automotive television advertising in San Diego in 2016 while $14.6 million was spent on automotive radio advertising. Similarly, in Los Angeles, $362.7 million was spent on automotive television ads and $70.6 million on automotive radio ads.
In addition, the study finds that automotive television ads, despite their cost, often miss their target audience. Only 34 percent of the television audience has full- or part-time jobs while 74 percent of radio listeners are employed.
“This study provides compelling evidence of broadcast radio’s ability to reach and motivate millions of auto buyers in Los Angeles and San Diego,” said Brad Kelly, managing director for Nielsen Audio. “Radio is the top weekly reach medium for new and used auto buyers in Southern California.”
Callahan points out that the study does not suggest automakers and dealers increase their advertising budgets or forego television ads for radio. “We are asking the automotive industry to engage radio in a discussion of a more effective media strategy to reach qualified customers,” said Callahan. “Based on this new research and current market conditions, the time for that discussion is now.”
The complete automotive research study can be found at www.scba.com as well as a video of the research unveiling in Los Angeles, CA.