Subaru Case Study - The Arthur Page Society

traded in for government rebates totaling $2.9 billion. 14 Japanese manufacturers accounted for 7
of the top 10 models purchased under the stimulus program. 15
INDUSTRY MARKETING EXPENDITURES
Automotive companies typically devote approximately 10% of their total sales revenues
to marketing efforts, of which advertising comprises just one portion. However, due to the
economic recession and rising fuel costs, both of which have significantly reduced new auto
sales in the latter part of the decade, automotive companies have spent an average of 14% of
their total sales revenues on marketing efforts. 16
The automotive industry is the leader in total ad spending, 17 allocating nearly $10.1
billion to advertising in 2008. Despite a decrease of 15.5% over 2007’s expenditures, the
industry continues to lead ad spending even in its current economic state. 18 Ad spending for the
top 10 product categories is shown in Chart I:
Chart I:
2007-08 Top 10 Advertiser’s, By Product Category
Product Category
6
2008
(millions)
2007
(millions)
Automotive (Factory & Dealer Assoc.) $10,016.1 $11,854.4
Pharmaceuticals $4,344.1 $5,325.3
Local Auto Dealerships $4,198.3 $4,604.6
Quick Service Restaurants $4,080.5 $3,932.8
Department Stores $3,809.9 $3,994.2
Wireless Telephone Services $3,431.4 $3,731.6
Motion Pictures $3,322.1 $3,750.6
Direct Response Products $2,576.9 $2,358.9
Restaurants $1,618.6 $1,619.4
Furniture Stores $1,580.8 $1,636.2
Total: Top 10 Product Categories $39,060.0 $42,808.1
Source: The Nielsen Company 19
Five automotive companies made it onto Nielsen’s 2008 list of top advertisers, across all
industries – GM, Toyota, Ford, Honda, and Chrysler. See Chart II for a complete breakdown of
top 10 companies’ 2007-08 ad spending, in millions: