Car brands' media spend on the rise

By Wenlei Ma and Damian Francis | 30 November 2012

Volkswagen more than doubled its ad spend in the 12 months to September 2012 as it sought to expand its brand presence in a highly competitive market, while the overall automotive category climbed 3%, according to Nielsen.

Toyota was the highest-spending vehicle manufacturer, but at $63.4 million, the car giant’s ad spend declined 4% year-on-year. Hyundai claimed second spot and increased a sizeable 27% to take its total to $57 million. As a consequence, Holden’s 2% growth to $50.7 million saw the iconic brand relegated to third position.

However, the significant growth story came from German manufacturer Volkswagen, whose ad spend rocketed 109% to $40.7 million, putting the brand in fourth spot. Volkswagen has been very active in a crowded market in the past year.

The company has been pushing its Golf, Passat, Tiguan, Touareg and most recently, Up, models. Many of its campaigns, developed by DDB Sydney, have picked up creative metal in award programs locally and internationally. The manufacturer sold 40,223 cars between January and September, according to VFacts.

Volkswagen’s sister brands have also increased their ad spends in the same period. Audi boosted its outlay by 30% to $12.1 million while Skoda rose an impressive 73% to $8.1 million.

The category posted a 3% increase with growth in all channels except for press and direct mail. Digital and cinema recorded the strongest increases at 40% and 26% respectively. Despite a 7% decline, press still attracted the greatest share of ad dollars at $411.4 million, followed closely by TV at $391.1 million.

Australians bought just under 1.1 million cars in 2011 as more than 60 brands clamoured for brand presence and consumer cash. As a result of the highly competitive marketplace, not everyone was convinced all the brands would survive.

Kevin Macmillan, partner at The Works, told AdNews brands with more resources to invest in the market would grow their presence. “We possibly might see one or two manufacturers vanish. Fiat are all but gone. It’s tough, the biggest players get bigger and the smaller players will potentially get smaller,” he said.

However, Fiat Chrysler Group Australia director of corporate affairs Lenore Fletcher said since the company reclaimed Fiat under its umbrella earlier this year from previous licensee Ateco, the brand was due for a reinvigoration.

“Now that Fiat is factory-backed, you will see amazing growth as we can put more investment into it and reposition it for wider appeal,” she said.

“There will be a period of consolidation where we’ll look at the product offering but this time next year you will see a marked improvement in the brand.”

She added Fiat was well positioned for growth as the small car and European import segments have seen a rise.

This article first appeared in the 30 November 2012 edition of AdNews, in print and on iPad. Click here to subscribe for more news, features and opinion.

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