Auto Ads Return, Giving Businesses a Big Boost
From hamsters rocking their new Kia to a major mea culpa from Toyota, auto ads are once again parked on our TV screens.
At a production company in Los Angeles, that means a boost in business. They just wrapped a new ad campaign for Jeep and are now working with Mercedes.
CBS News correspondent Ben Tracy reports in the first eight months of last year, the firm did not produce a single auto ad. Since then, they have done 13.
They just wrapped a new ad campaign for Jeep that employed 120 people.
"There were a lot of people who literally came up to me at the end of that shoot and said, 'Thank god for Jeep. Thank god for that job. Because I hadn't worked in two months,'" says Supply & Demand executive producer Kira Carstensen.
The recession hit the auto industry hard and manufacturers slashed ad budgets.
Auto ad spending dropped 23 percent, from 14.5 billion in 2008 to about 11 billion in 2009. Now auto ad spending is making a U-turn, estimated to reach $14- to $16 billion in 2010.
"They're starting to see that the economy is turning around," says Jason Stein, the editor of Automotive News. "They're starting to see there is momentum in terms of people opening up their wallets and spending money on vehicles again."
That's good news for TV and radio stations as well as print media. Auto ads are a major source of revenue.
Local auto dealerships should also benefit. In the past two years, nearly 2,400 have closed their doors. The hope is that a boost in advertising will draw even more buyers back to the lot.
It's a much-needed shot in the arm.
