Let’s Roll: Why America’s Auto Dealers Need To Increase Their AM/FM Radio Advertising To Reach Consumers Who Are Ready To Buy
Economic indicators are trending positive. “Consumer Confidence increased to its highest level since the onset of the pandemic in March 2020,” said Lynn Franco, Senior Director of Economic Indicators at The Conference Board. “Consumers’ renewed optimism boosted their purchasing intentions for homes, autos and several big-ticket items.”
Nielsen reports that two-thirds of American workers are now commuting to their jobs, a +70% increase from a year ago. The surge in commutes is good news for both the AM/FM radio industry and auto dealers.
Auto sales surge, supplies are tight, and pricing is strong
Q1 2021 auto sales soared +12% versus the prior year which included the onset of the pandemic.
Forbes reports, “Cox Auto raised its prediction for total 2021 new vehicle sales to 16.1 million from 15.7 million. However much of that growth is likely to come from the sale of high-priced luxury vehicles and pickup trucks leading Cox’s Jonathan Smoke to predict, ‘This spring is going to be one for the record books, I believe. If we had more supply we’d shatter sales records too. But at least we know it’s going to be one for the record books from a pricing perspective.’” CarGurus’ Kevin Roberts continues, “I would expect the economy to be quite hot as we head into the second half of the year.”
Nielsen: Heavy AM/FM radio listeners are +18% more likely than heavy TV viewers to make a major auto purchase
A recently released Nielsen consumer tracking study proclaimed AM/FM radio is the soundtrack of America’s recovery and spending resurgence. Nielsen reports one-third of heavy AM/FM radio listeners intend to make an auto purchase in the next year, +18% greater than heavy TV viewers.
Nielsen Scarborough: 40% of U.S. new car buyers cannot be reached with TV
Nielsen Scarborough finds that it is crucial for AM/FM radio to be added to the TV plan to reach auto intenders. Based on media usage, 40% of U.S. new car buyers are impossible to reach on TV. While 60% of auto intenders are heavy TV viewers and can be reached by linear TV, two out of five auto purchasers cannot be sufficiently reached by TV.
One out of four persons 25-54 cannot be reached on linear TV
While TV has been a historical mainstay for the auto dealer’s media plan, plunging cable penetration and the rise of commercial-free streaming TV platforms makes it much more challenging to reach auto intenders on TV. There has been a sharp drop in linear TV viewing in the last few years.
Nielsen’s just-released Total Audience Report reveals linear television’s weekly reach among persons 25-54 has dropped from 85% in Q3 2018 to only 77% in Q3 2020. Just about one out of four persons 25-54 Americans cannot be reached with linear television. AM/FM radio’s 89% weekly reach among persons 25-54 is much stronger than television’s 77%.
Proving impact: AM/FM radio campaigns generate significant auto dealer website traffic
What hard evidence exists to prove AM/FM radio advertising can deliver traffic to auto dealer websites? Enter LeadsRx, a leading multi-touch attribution measurement firm that works for hundreds of advertisers and agencies to quantify advertising impact on search and site advertising.
On behalf of iHeartMedia, LeadsRx conducted the world’s largest study of media impact on auto website traffic. Website traffic was measured from 310 auto dealers covering 19 vehicle brands in 100 markets for a 17-month period. A total of 1.8 million AM/FM radio commercials were studied to develop auto dealer best practices for AM/FM radio advertising.
LeadsRx found that on average, AM/FM radio is responsible for a +17% lift in automotive dealer web traffic. Most of this traffic comes from new consumers. 59% of web visits attributable to AM/FM radio advertising originate from new shoppers.
LeadsRx attribution data finds that media weight is important. As the number of daily AM/FM radio ads increases in the overall market, auto dealer website traffic surges.
- 1 to 9 ads a day aired in the market generated a +5% lift in auto dealer website traffic.
- 20 to 29 daily ads resulted in a +23% increase in auto dealer website traffic.
- 40+ daily AM/FM radio ads in the market caused a massive +55% increase in auto dealer website traffic.
Expanding a buy from three days to seven days a week causes auto dealer web traffic to nearly double.
The myth that auto dealer ads should be run mostly towards the end of the week was shattered. LeadsRx found very strong web lift throughout the week, especially Monday through Wednesday.
The LeadsRx study issued the following recommendations:
- Run many ads: As the number of daily AM/FM radio ads increases, auto dealer website traffic lift surges.
- Advertise all days of the week: Despite the belief that people shop for cars only at the end of the week, ads running Monday through Wednesday drive significant web traffic.
- Advertise on all dayparts: Car shopping aligns with 6AM-7PM, AM/FM radio prime time.
- Use on-air personality endorsements: Campaigns that include AM/FM radio personalities generate an average of 2X greater response than campaigns that include produced/pre-recorded ads.
- Leverage multiple ad lengths: Campaigns with multiple ad lengths outperform single ad length campaigns by over 2X.
Key takeaways:
- The economy is returning to normal with increased consumer confidence, commuting, and optimism.
- Forbes finds that auto sales are surging, supplies are tight, and pricing is strong.
- Nielsen: Heavy AM/FM radio listeners are +18% more likely than heavy TV viewers to make a major auto purchase.
- Nielsen Scarborough: 40% of U.S. new car buyers cannot be reached with TV.
- Proving impact: AM/FM radio campaigns generate significant auto dealer website traffic according to LeadsRx AM/FM radio attribution report.