Spots N Dots
The Daily News Of TV Sales
June14, 2017
NIELSEN: SPREAD OUT AUTO ADS THROUGH THE MONTH
TV NEEDS TO REACH BUYERS ONE WEEK OUT
Local TV remains a great place for car dealers to park ad dollars, but they may want to rethink how they’re spreading budgets across the month. That’s according to a new Nielsen report that looks at consumers and finds the critical factor isn’t whether they’re buying new or used—it’s whether they’ve made up their mind.
Why does it matter? Auto advertisers disproportionately place more spots during the third and fourth weeks of the month. Some even go dark during the first two weeks. Nielsen SVP Rich Tunkeltold a Southern California Broadcasters Association event that means some dealers are completely missing the chance to influence undecided buyers early in their decision-making process while the decided buyers—who make up more than half of all buyers—aren’t seeing a single commercial in the days leading up to their big purchase.
“There are decided auto buyers that are buying their car in weeks one and two and there are undecided buyers making up their mind,” Tunkel said. His message to car dealers is they don’t need to spend more—they just need to shift budgets to cover an entire month. “Same dollars, but spread it out—be on consistently,” Tunkel said.
The undecided segment makes up of 40% of car buyers. It includes those who aren’t sure which make or model they want, don’t know their budget, or aren’t certain which features they want in a car. Nielsen says the best way for advertising to make an impact on that segment is to begin reaching undecideds a month before they make a buying decision.
Six-in-ten buyers know what they want including 46% who know the exact make and model they’re buying and 14% who know the brand they’re targeting. Nielsen says the best time to reach them is one week before a purchase with creative that focuses on specific offers or promotions.
Digging deeper the report shows just who those undecideds tend to be. They’re Millennials, they lean female, are more likely to be Hispanic, and have moderate-but-growing income. Those who typically know what they’re buying are more likely to be in Gen X, have higher incomes, and have bigger families.
Nielsen reports 83% of L.A. auto buyers—those who plan to buy or lease a car in the next year—report they watched broadcast TV during the week prior to its survey. That’s seven points more than watched a basic cable channel and nearly twice those who read a newspaper.
Tunkel credited that reach for why 90% of L.A. market ad dollars go to television. It’s also TV’s power to sway buyers. Two-thirds of undecideds credit TV ads for helping them decide. Shockingly, an even bigger 70% of those who’ve already decided what they’re buying still rate TV ads as important.
The study is based on an online Nielsen survey, conducted in February and March, of 2,237 auto buyers aged 18+. Nielsen conducted a similar analysis of the San Diego market. The findings for both cities are at SCBA.com.
ADVERTISER NEWS
The typical automotive dealership has spent 6.4% more in advertising through April this year according to NADA data, 8.6% of the dealership’s gross sales (compared to 8.0% last year). The gain is coming from “mass-market” dealerships, both domestics and imports, with those dealerships’ expenditures up 7.7%, while luxury brand dealerships have actually cut back a bit, down 5% versus last year’s investments……The eighth generation Toyota Camry reaches dealers this summer with two distinct versions—the traditional L-model and a “sporty” S-model designed to catch the attention of a motorist driving past the dealership. “There’s nothing pushing people into sedans. It’s a perfect time to start fresh, from scratch, lead the industry, lead the sedan segment,” Toyota division General Manager Jack Hollis said at a media presentation……We reported yesterday on Aldi’s aggressive expansion plans, but with Lidl’s first stores due to open tomorrow, Kantar Retail has issued a report that offers an optimistic outlook about the new competitor’s chances for success. Kantar expects Lidl to have more than 600 stores open across the country within six years, doing about $8.8 billion in annual sales by that time “as customers begin to gravitate away from other grocers”……Despite the recent reports that the Federal Trade Commission is ready to try to block the Walgreens/Rite Aid merger, Fred’s is continuing to do its part to make the three-way deal acceptable to regulators. It has secured additional financing that would allow it to buy as many as 1200 spun-off Rite Aid stores and distribution centers if the deal ultimately gets the green light from regulators……Target will try to simplify its e-commerce business combining its Cartwheel savings app with its primary shopping app with plans to eventually shut down Cartwheel entirely. The company is promising more improvements soon for its digital business and is expected to launch a pilot test of next-day home delivery service Target Restock this summer……Scotts Miracle-Grosays there’s a sharp decline in the mass retail segment of its business and will cut back corporate profit and sales projections for the year. “While we still have 30 percent of the season in front of us, it’s become clear that we’ll fall short of our original plans on both the top and bottom line,” CEO Jim Hagedorn said……We had reported that the supermarket industry, led by H-E-B, was the most trusted industry in the annual Temkin Trust Ratings. Progressive Grocer adds that Publix (number 9) and Hannaford (15) also made the top twenty of all 329 companies studied. But other food retailers dropped in rankings, including Trader Joe’s (number 7 last year), Costco, Hy-Vee, and BJ’s Wholesale Club.
NETWORK NEWS
Jennifer Esposito (The Affair, Mistresses, Blue Bloods) is leaving the cast of the CBS procedural NCIS after just one season. Esposito played NCIS Special Agent Alex Quinn on the 14th season and will not return this fall. NCIS has gone through plenty of cast changes previously, most notably with Michael Weatherly departing after season 13 to star in the CBS drama Bull……NBC’s Megyn Kelly is no longer scheduled to emcee the annual Promise Champions Gala, an event presented by Sandy Hook Promise, due to her interview with Sandy Hook hoaxer Alex Jones. The organization said, “This decision was spurred by NBC’s planned broadcast of Kelly’s interview with conspiracy theorist Alex Jones, who believes the tragedy as Sandy Hook Elementary in Newtown, CT, was a hoax.” Kelly tweeted a clip from the Sunday Night with Megyn Kelly interview, teasing the sit-down, which is set to air on June 18th. In addition, J.P. Morgan Chase pulled local TV and online advertisements from NBC until after Kelly’s interview with Jones airs, according to a Wall Street Journal report. Jones also called for his interview to be taken off the air. Jones said in a Tweet that he is calling for the interview to be canceled for “misrepresenting my views on Sandy Hook.” ……Univision will air the 2017 Latin Grammy Awards, live from the MGM Grand Garden Arena in Las Vegas on Thursday, November 16th with the nominees being announced on Wednesday, September 20th. The Latin Recording Academy also announced that it will honor its annual Person of the Year, lifetime achievement recipients, and trustee award winners on Wednesday, November 15th. Significant winners of the Latin Grammy award last year included Juan Gabriel for album of the year, Carlos Vines, and Shakira for record and song of the year for La Bicicleta……The host of the Bachelor and its spinoffs, Chris Harrison, has spoken out for the first time about the incident that caused production on Bachelor in Paradise to be suspended. “There are a lot of competing details in the various press accounts of the incident,” Harrison said in a statement issued via Warner Bros. Television. “And there’s a lot of misinformation out there too. We urge everyone to be patient until the investigation is complete.” Details of the incident that prompted the suspension of production have not been forthcoming from the producers. Multiple media reports have alleged an improper sexual encounter between two contestants may have prompted a complaint by a producer on the show.
TV’s ROI SHOULD BE 20% MORE THAN REPORTED
Mediapost.com reports on a first-of-its kind analysis of TV audience data used by modelers to measure the return on investment (ROI) for ad spending found that it is sorely lacking, and in some cases misrepresents TV’s ROI by as much as 20%. In fact, in 90% of the cases, studied by Sequent and Nielsen, the effect was relatively small, distorting TV’s contribution to advertising ROI by less than 10%. The analysis found that a combination of legacy factors in the way Nielsen data is processed for third-party modelers contributes to inaccurate and/or weak data distorting their outputs. Read the full analysis HERE.
DONE DEALS
Jim Lutton, longtime general manager of WWMT (CBS) in Kalamazoo, Michigan is set to retire on July 14th. Lutton leaves the position as the longest-serving general manager in the market. James Killen, group manager of Sinclair Broadcast Group made the announcement noting that “Jim has been a strong and tremendous leader over the last 10 years here in West Michigan. He has truly taken both WWMT and CW7 to the next level.” Lutton will be succeeded by Fred Corbus, the station’s current DOS. Corbus worked at WWMT early in his career before leaving in 2007. He held positions at WOOD in Grand Rapids and WXYZ in Detroit before returning in 2015.
ECONOMIC NEWS
The labor market is already tight, and it may get even tighter: The Manpower Group reports 24% of the 11,000 employers surveyed are looking to add staff during the third quarter with just 4% expecting workforce reductions. Manpower’s Net Employment Outlook (derived by taking the percentage of employers anticipating an increase in hiring activity and subtracting from this the percentage of employers expecting a decrease in hiring activity) comes in at +17, the twelfth consecutive quarter in which the Outlook has been +15 or stronger. The survey also shows employers in all four U.S. regions studied have a positive outlook for their third quarter plans, and employers in all 13 industries studied expect to add staff, led by Leisure & Hospitality and Transportation & Utilities. There are of course significant variations by market based on companies within those specific markets. For example, metros singled out as having the strongest current hiring prospects are a diverse group including Grand Rapids, Raleigh, Charlotte, Colorado Springs, and Des Moines.
KRAFT-HEINZ: LOOKING FOR A DEAL
After failing in its bid to take over Unilever, Kraft Heinz, backed by takeover firm 3G Capitaland Warren Buffett’s Berkshire Hathaway, is reported to be looking for another dance partner—not necessarily in the food business. CNBC says a report issued by S&P Global Ratings lists several “attractive targets” that Kraft Heinz could look at including Mondelez(which at one time had been part of Kraft), General Mills, Kellogg, Campbell Soup, Colgate-Palmolive and Kimberly-Clark. There even has been some speculation about a possible deal for PepsiCo, although that could be complicated as Berkshire-Hathaway already is a major investor in Coca-Cola. 3G and its affiliates already control several other companies including Anheuser-Busch InBevand Restaurant Brands International (Burger King and Tim Horton’s). S&P said the attempt to add Unilever earlier this year came at a time when Kraft Heinz was reporting “lackluster results” which have continued.
BUSINESS BYTES
Restaurant delivery may be the fastest-moving trend in the history of that industry according to Nation’s Restaurant News which says more than 80% of publicly-traded chains (not counting pizza which has always delivered) are at least testing the idea at the present time. It notes that based on NPD Group statistics, delivery traffic increased 2% in the first quarter while drive-thru business was up 3%. With flattish numbers for the overall restaurant business, chains appear to need to make it convenient for consumers in order to produce any growth in their results, which delivery helps to provide. There is however, one potential problem coming from the increases in delivery: the delivery companies get their commission from the restaurant owners, franchisees in most cases. NRN says that could create some tension between franchisors, who get royalties on all sales and love the incremental business, and franchisees who are getting less profit on delivery orders.
NIELSEN TO CAR DEALERS: DON’T FORGET THE URLs
No car dealer or its ad agency ever forgets to show off the car in a dealer commercial, but in today’s digital world there may be something just as important to show consumers: a URL. According a new Nielsen survey of the Los Angeles market revealed no other tool was as valuable an online resource to auto consumers according to its survey. It shows 24% of decided car buyers and 18% of undecided buyers rate the dealer website as their top tool, beating out even the manufacturers’ websites, and sites such as Kelly Blue Book, CarFax and Consumer Reports. “What you can do to mention to your website and give value to your website—can help speak to the very different state they are in the purchase funnel,” Nielsen SVP Rich Tunkeltold a Southern California Broadcasters Association event.
Yet Nielsen’s analysis of Los Angeles market dealer ads found websites don’t always get the attention they deserve. The typical radio spot during first quarter mentioned a price or promotion offer 5.8-times, the dealer’s name 5.2-times, the car brand name 2.5 times—but the dealer’s website only 1.2-times. A similar analysis of TV spots wasn’t released. Nielsen says L.A. consumers plan to spend $52 billion on new cars and $20 billion on used cars this year.
SCBA—which rallies the radio industry in southern California—commissioned the research to show dealers that they should spread their ad dollars to more than just TV stations. And not just through buying Google or Facebook ads, pointing out the Advertising Research Foundation released a study last year that showed the optimal mix for reaching Adults 18+ should be 78% traditional ad spending in TV and radio and 22% in digital. Even for reaching Millennials, ARF said a 71%-29% split favoring traditional advertising is best.
Nielsen’s own number crunching shows the biggest bang for a client’s buck in terms of improving its reach in the L.A. market is when they shift 20% to 30% of their TV budget to radio. Tuckel said it improves a campaigns reach by 13-19%.
EVEN MORE AUTOMOTIVE NEWS
Hyundai recalled 600,000 U.S. vehicles under two recalls. The larger recall is for a problem with the secondary hood latch on 2013-2017 model yearSanta Fe and Santa Fe Sport. The other is for a parking brake switch that doesn’t always illuminate the warning light on 2015-2016 model year Genesis and Sonata cars……Ford says its Louisville, KY plant will operate a week more than scheduled this summer due to demand for the Ford Escape. Sales of the Escape SUV and Lincoln MKC are off to their best start in company history through five months of the model year……AutoFinance News reports that S&P lead analyst Amy Martin is predicting a modest increase in auto financing this year—$70 billion vs. $67 billion in 2016. And while sub-prime auto loans declined slightly last year to $23.1 billion (from $23.3 billion), she told a conference of sub-prime lenders that recent headlines indicating “the sky is falling” in sub-prime auto lending aren’t supported by what’s actually going on.
NISSAN STRONG IN VEHICLE SATISFACTION
Automotive marketing consultant AutoPacific is out with its 21st annual Vehicle Satisfaction Awards (VSA), with Nissan claiming the most wins with five, followed by Kia with three. Porsche, Honda and Ford each have two wins. Genesis, Volvo, Mini, Jeep, Dodge, Chrysler, GMC, Lexus and Lincoln each claim one win. The VSAs are based on survey responses from over 54,000 owners of new 2016 and 2017 cars and light trucks.
Of the 23 winning vehicles, seven were redesigned for the 2017 model year, including the Genesis G90, Kia Cadenza, Nissan Titan, Ford F-Series Super Duty, Honda Ridgeline, Kia Sportageand Chrysler Pacifica. The Genesis G90 received the highest VSA score to data and was awarded the President’s Award. It was also the most satisfying vehicle overall.
Lincoln is the most satisfying premium brand, regaining leadership from Tesla and nosing out domestic luxury competitor Cadillac. The newcomer Genesis brand from Hyundai ranks third—close behind Lincoln and Cadillac.GMC is the top ranked popular brand, retaking the lead from 2016’s top popular brand, Kia.