Brad Seitter EVP , Local & National 1
Average Close % For Local Dealers Lead Generation: 7-10% (12-15% for good dealer) Showroom Floor : 30-35% (40% for good dealer) LG leads close at lower % and at lower profit margin because LG leads focus on pricing Showroom customers close at higher % and at higher profit margin because the leads are higher quality and the focus is on the brand and the dealership 2
It’s Just Math! Lead Generation: 7-10% Showroom Floor : 30-35% 50 more LG leads= 3-5 new customers 50 more customers on showroom floor = 15-18 new customers 3
How to get more showroom floor leads Marketing Dollars should MATCH or EXCEED Consumer Time Spent and Consumer I nfluence
Time Spent
Live TV Continues To Dominate All Video Viewing Across All Age Segments Hours: Minutes/ Week A18+ A18-34 A35-49 A50-64 A65+ A18-49 A25-54 Live TV 27:13 11:43 22:05 35:30 45:14 16:24 20:44 Time-Shifted TV 3:58 1:41 3:59 5:20 5:34 2:43 3:29 DVD/Blu-ray Device 0:34 0:30 0:37 0:39 0:32 0:33 0:36 Game Console 1:39 3:44 1:37 0:27 0:09 2:47 2:06 Internet Connected Device 4:05 5:20 4:57 3:24 2:10 5:10 5:09 Video on a Computer 0:35 0:52 0:38 0:30 0:14 0:46 0:44 Video Focused App/Web 1:30 2:30 1:37 0:59 0:35 2:06 1:43 (Smartphone) Video Focused App/Web 0:48 1:03 0:55 0:35 0:36 0:59 0:53 (Tablet) 6 Source: Nielsen Total Audience Report Q1 2019; Based on Total U.S. Population (Note: Internet Connected Device is inclusive of Smart TV app usage.)
Car Buyers Spend the Most Time with Television of All Ad Supported Platforms Daily Time Spent Yesterday A18+ Plan to buy/ lease auto in the next year (I n Hours:Minutes) Television (Broadcast/Cable) 5:48 Broadcast TV 3:45 Cable TV 2:04 Radio 1:21 Email 1:13 Social Media 1:10 Streaming TV 0:48 Streaming Video Other Than TV Programs or Movies 0:36 TV Program or Movie Using Streaming Video 0:36 Search 0:33 Internet-Radio 0:24 Broadcast TV News Websites/Apps 0:23 Newspapers 0:16 Cable News Channel’s Websites/Apps 0:13 Magazines 0:11 Internet-Print (Newspapers/Magazines) 0:10 Source: GfK TVB Media Comparisons Study 2019. M-S 5A-1A. Persons 18+ Plan to buy/lease auto in next year: Yes. Online/internet platforms such as email, social 7 media, internet radio and websites, are totaled for any online device-PC, Smartphone and Tablets. Broadcast TV News Websites/Apps includes local TV station & network websites/apps for news/weather/sports.
Most Time Spent with TV Programs is On Linear TV Daily Time Spent Yesterday A18+ (I n Hours:Minutes) 5:24 0:51 0:28 TV (Broadcast/Cable) Streaming on TV Set Streaming TV Programs or Movies on any online device (PC, Smartphone, Tablets) 8 Source: GfK TVB Media Comparisons Study 2019. M-S 5A-1A. Persons 18+ .
Influence
What Influenced Automotive Consumers Most 3% 3% 3% 3% 3% 4% 4% 3% 4% 3% 3% 3% 4% 4% 4% 3% 3% 4% 3% 3% 4% 4% 3% 3% 4% 4% 4% 4% 3% 3% 5% 5% 5% 60% 55% 50% 49% 47% Awareness Interest Visit Store/Website for Info Consideration Purchase Television Social Media Outdoor Broadcast TV Web/Apps Newspaper (Print Only) Radio Streaming TV Direct Mail Internet Video Ad Magazine (Print Only) E-mail Watching On Demand Ad on a Website Source: GfK TVB Purchase Funnel 2019 Automotive Category A18+ , N = 1265 10 QA4/QA5/QA6/QA7/QA8 Most important for media that registered 2% or higher.
Television Ads Are Motivation To Do Further Research Online Has an advertisement on television motivated you to go the I nternet to find out more information about that product or service? Percent Yes 65% 54% Adults 18+ Car Buyers Source: GfK TVB Media Comparisons Study 2019. Persons 18+ Plan to buy/lease auto in next year: Yes. Includes only those who answered. 11 Q3 - Has an advertisement on television motivated you to go the Internet to find out more information about that product or service?
Automotive Tier 1 Media Spend Oct 2017 – Sept 2018 TV TOTAL PARENT DOLS (000) % * $ 1,295,161.4 81.8% General Motors Ford 973,772.5 87.9% 807,859.5 80.5% Toyota 640,123.5 73.1% Fiat/Chrysler Nissan 554,956.4 87.9% 545,454.1 93.7% Volkswagen Honda 477,871.7 83.3% Hyundai-Incl Kia 247,899.0 79.2% 246,356.8 85.7% Subaru Daimler 184,302.3 83.8% Mazda 114,741.3 85.6% 110,154.2 92.5% BMW Mitsubishi 99,416.6 88.4% 84,949.8 72.9% Jaguar-land Rover/Tata Motors 51,597.0 74.7% Volvo Source: Kantar Media, 10/1/17-9/30/18, Tier 1 Automotive spending; TV = Network, Spot, Cable Network, Syndication and Spanish-Language 12 Network; * % of Total Ad Dollars 17-Media (includes Digital Media: Online Video, Mobile, Internet Search and Display).
MYTH All television is created equal 13
Broadcast Reaches 100% of TV Homes Broadcast 100% 14 Source: The Nielsen ComScore, May ‘19
The Local Programming of Choice is on Local TV Stations… 92 of the Top 100 Shows in the 2018-’19 Season Were Broadcast S/ O-S/ O Programs Ranked by Adults 25-54 Live+ 1 Ratings Broadcast Ad-Supported Program Rank Stations Cable Total 1-25 24 1 25 26-50 24 1 25 51-75 20 5 25 76-100 24 1 25 Total 92 8 100 % 92% 8% 100% 15 Source: Nielsen, NPOWER, 9/24/18-5/22/19; Ranked by A25-54 L+ 1 US AA % (ties broken by 000’s)
Only 8 Cable Programs in the Top 100 in the 2018-’19 season Rank Program Network 22 CFP CHAMPIONSHIP ESPN 45 CFP CHAMPIONSHIP SUST ESPN 51 ORANGE BOWL ESPN 55 CFP SEMI-FINAL ESPN 64 ROSE BOWL ESPN 69 COTTON BOWL ESPN 75 NFL REGULAR SEASON ESPN 76 SUGAR BOWL ESPN 16 Source: Nielsen, NPOWER, 9/24/18-5/22/19; Ranked by A25-54 L+ 1 US AA % (ties broken by 000’s)
Auto Intenders’ Vehicle Purchases are Influenced by All Media and Ads Please tell us which of the following media 31% influences your CAR/ TRUCK purchases: 27% 24% 23% Auto Intenders 22% 21% 21% 21% Adults 18+ 20% 17% 14% 14% 14% 13% 12% 12% 11% 8% Broadcast TV Read Prod. Newspaper Cable TV Internet Ads Magazines Radio Outdoor All Other Article Billboards 17 Source: IAB Digital Influence on Auto Intenders
What Happens When an Auto Dealer Stops Advertising on Television? 28% 13% 11% 11% Stopped Traditional TV Advertising Organic Search Direct Brand Name Website Traffic Traffic Searches Sales Organic Search Direct Brand Name Sales Website Traffic Traffic Searches Added Back Traditional TV Advertising -14% -14% -17% -20% 18 Source: Spots ‘N’ Dots-March 14, 2018; Strong Automotive.
Summary Broadcast TV remains KING! Digital media does not REPLACE a base broadcast TV buy. Digital media COMPLIMENTS a base broadcast TV buy Time Spent + Consumer Influence = Media Allocation A base Broadcast TV buy makes all other media work better…Your social media, radio, print, billboards, search…all work better with broadcast TV as the base to your buy A broadcast station is your partner providing one stop shopping for your on-air message, the right digital platforms, placement strategy and to create a commercial for your business 19
Executive Auto I ndustry Overview
6 Months 2019 I ndustry Overview Sales 8,438,518 -2.0% vs 2018 SAAR 17.0 vs 17.2 -1.4% vs 2018-DSR % Change Company 6 Months Sales 2019 vs. 2018 GM 1,409,321 (-3.7%) Ford/Lincoln 1,231,454 (-2.5%) Toyota/Lexus 1,152,108 (-2.5%) Fiat/Chrysler 1,081,970 (-0.5%) Honda/Acura 776,995 (-0.7%) Nissan/Infiniti 717,036 (-7.6%) Hyundai/Genesis 343,335 + 3.1% Kia 304,844 + 4.5% Subaru 339,525 + 5.8% VW 184,608 + 7.5% BMW 156,440 + 2.7% Mercedes Benz 163,421 (-6.4%) Car 2,496,917 (-8.7% ) Truck/ SUV 5,941,601 + 2.7% Source: Ward’s Auto Data 21
1 st Half 2019 - I ndustry Highlights Vehicle sales were down 2% in the first half of 2019. I t was the third time in the past decade monthly sales did not increase versus the previous year . Overall car share was 32%, down 8.7% from last year. SUV sales were up 1.7%. Pickup trucks gained 4.6%. Pluses – Strong Consumer Confidence / Growing Economy / Continued Job Growth / Increasing Housing Sales / Low Gasoline Prices Negatives – High Vehicle Prices ($33,655) / Lower Vehicle Incentives ($3,747) / High Dealer Inventory Levels (75) / High Monthly Payments (6%) / Continuing threat of vehicle tariffs from China, Europe and Japan 22
Car Demand: Declining Market Car % of Retail Sales (YTD) 48% 43% 40% 37% 32% 2014 2015 2016 2017 2018 23
Reflections on 1 st Half ‘19 Six month decline – Pacing below 17MM (2014 levels) Transaction prices reach $33,655 (+ 3.1% ) – Truck & SUV’s Fleet to 24% of sales (+ 23% ) 6% interest rate 24
Prices Up Due to Low End Collapse Sales by Price Point ‘18 vs ‘17 4% 2% 0% -19% Under $20K 20-30 30-40 $40K & Up 25
Regional Sales: Large Variations ‘18 vs ‘17 Retail Sales By Region North West North Central North East -2.9% -2.4% -0.6% South West South Central South East -4.1% + 0.1% + 0.1% 26
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