Recovery of auto sales brings sharp increase in advertising

Automotive marketers ramped up advertising sharply in 2010 as light vehicle sales started to recover from the depths of the worst slump in three decades.

According to KHABAR KHODRO, Measured U.S. auto advertising in eight media rose 19 percent to $14.3 billion last year, Advertising Age reported last week.

Automotive and financial categories drove the ad industry's 9 percent gain in revenue. The trade publication called the surge "another financial and automotive bailout -- only this time it was banks and cars bailing out ad land." The 2010 growth to $131 billion reversed a 10 percent drop in 2009, restoring ad revenue to 2008 levels.

Advertising Age is owned by Crain Communications Inc., parent company of Automotive News.

Including estimated unmeasured advertising, spending by the top seven automakers and their dealers jumped 28 percent to $10.5 billion. General Motors, Ford Motor, Toyota Motor Sales, Chrysler Group, American Honda, Nissan North America and Hyundai-Kia Automotive all landed in the top 50 of U.S. corporate advertisers.

On a company level, Chrysler led automakers in percentage growth. Ad spending soared 75 percent to $1.1 billion last year, from $666 million in 2009, the year it declared bankruptcy.

Chrysler and American Honda, up 12 percent, joined GM, Ford and Toyota in the billion-dollar ad club.

Automakers that boosted ad spending the most last year tended to have a corresponding high increase in sales.

Except for recall-plagued Toyota, which was forced to advertise aggressively just to keep sales from falling, the four major automakers that increased ad spending the most gained market share. In contrast, GM and Honda raised advertising less than the industry average and lost market share.