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Auto industry cuts ad spend on TV, print, ups spend on digital media

Auto industry cuts spend on print and tv advertising and spends more on digital media and radio

Apnaloan.com Research Bureau

10 Aug 2007

Auto companies like Honda, General Motors., Tata Motors and Bajaj Auto Ltd. have slashed their advertising spend on traditional media of advertising like print and TV in the first half of 2007.

According to research by Adex India, a division of TAM Media Research auto advertising in print media fell 11 per cent to Rs. 475 crore in the first half of 2007 and on television by 0.54 per cent to Rs. 848 crore, when compared to 2006.

On the other hand, ad spend on other media like Web, Radio, direct mailers and point-of-purchase promotions - which are cheaper by comparison - have seen an increase. Media experts say the diversion of funds to other media could be due to a fall in sales and rise in lending rates. The lending rates are at a 5-year high so companies may have been prompted to spend more on dealer discounts and promotional schemes.

There are several instances highlighting this new trend. General Motors, India is extensively using the medium of internet to market its brand, Chevrolet Spark, launched in April 2007. Tata Motors, India's largest auto-maker by revenue used the digital media to promote its brand of sports utility vehicle, Safari.

Auto companies are also using the medium of radio where auto spends have increased nine times in the first half of 2007 to Rs. 11.5 crore. Other mediums of advertising being explored by the auto industry include outdoor media like retail spaces, in-flight entertainment network and tie-ups with media funds movie production companies.