Car manufacturers to pay more for TV spots as the economy regains its vigor

Article by Christian Andrei, on May 30, 2011

TV spots will be more expensive this fall as the economy regains its vigor and as competition gets more heated. Annual negotiations, also known as upfront media buying, have started.

These will decide how much the prime TV slots are and which companies will get them. Sources say that advertisers, including auto companies, will pay 10 to 15% more than last year for these TV spots. The talks are in the early bargaining stage so automotive marketers can’t publicly discuss their pricing prospects.

However, one source said that there has been “a lot of aggressive pricing” for the placement of these TV ads. There have been changes in the overall trend of pricing, according to Tom Peyton, Honda brand manager for American Honda Motor Co. Peyton said that for many years, automotive upfront buying was lower due to the struggling economy but the market has improved since then.

Peyton said that the auto advertisers’ willingness to pay more means that the industry is recovering and the companies’ spending is getting back to the levels before the recession happened.

According to network executives, domestic automakers have started to buy commercial time in fall football broadcasts. CBS CEO Leslie Moonves forecasts that when it sells its schedule for 2012 within the next few weeks, its ad revenue will go up in “solid, double digit[s].”

Topics: advertising

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