Dealerships and Advertising
You see the ads from dealers on television, hear them on the radio, see the big ads in the weekend newspapers, and, in the past several years, you’ve seen a lot more ads from dealers on the internet. In fact, it may seem like you can’t get away from them sometimes, especially some of the more obnoxious ones. So it’s no secret that automobile dealers spend a lot of money on advertising, but how is “a lot” defined?
The National Automobile Dealers Association (NADA) says that American new-car dealers spent a combined $7.8 billion (USD) in 2006. That’s the advertising the dealers paid for; it is exclusive of the money the manufacturers spent on brand and model advertising nationally. The NADA says that’s a 2% increase from 2005 and represents an average $590 advertising cost borne by the dealer per new car sold. The average new-car dealership in the U.S. spends $364,610 on advertising for their new car sales department.
How does that break out per advertising medium? A look at the chart breaks out where the money went in 2006:
Most industry analysts expect overall dealership advertising costs to keep rising over the next several years, with a greater percentage of that advertising migrating to the internet.
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