Car sales reached another new record in 2016. LANCE CLATWORTHY takes a look at consideration among new car prospects and the opportunities that news media advertising can provide to the automotive industry – it’s worth torquing up.
Summary : News media influences car buying decisions across the target market
94% of new car prospects read news media
846,000 news media readers plan to buy a car in the next 12 months
News media readers are 56% more likely to be buying a car
National newspaper readers ($43.7k) and Motoring section readers ($43.5k) plan to spend the most
49% of car buyers use news media when forming a shortlist
50% of car buyers use news media at the purchase decision stage
Car sales continue to grow
Australians bought 1.2 million new cars in 2016, according to the Federal Chamber of Automotive Industries (FCAI). Representing year on year growth of +2 per cent, this means there have been record new car sales in three out of the last four years. However, it should be noted that the growth is driven by a business sales increase of +13 per cent.
With 898,000 people saying they intend to buy a new vehicle in the next 12 months, we find that 846,000 of them read news media – that’s 94 per cent of new car prospects. Newspapers reach 77 per cent of prospects while digital news media reaches 75 per cent.
Some news media channels are twice as likely to be reaching prospects
With such saturation of the prospects, it’s not surprising that news media readers are just as likely to be prospects as is the population aged 14+. However, compared with non-readers, news media readers are 56 per cent more likely to be intending to buy a car in the next 12 months. And we see a real strength among readers of national newspapers – they’re more than twice as likely to be prospects, as is the case with readers of the motoring section in the newspapers.
*Index v Non readers of news media = 100
They’re also intending to spend more
There’s a strength across all news media channels, but especially for national papers and the motoring section. As shown above, they are not only significantly more likely to be buying, but national ($43.7k) and motoring section ($43.5k) readers are also intending to spend more on their new cars. Indeed, given that non-readers of the motoring section only intend to spend $39.7k, those who do read the section will be spending 10 per cent more.
Ford and Holden need to increase consideration
In 2016, Toyota led the market with an 18 per cent share of new sales while Mazda was second at 10 per cent (FCAI).
Among news media readers, emma research shows us that 24 per cent of new car prospects are currently driving a Toyota whereas 31 per cent say they would consider the brand. Of the Top 5 brands considered, we might deduce that Toyota, Subaru and especially Mazda need to be improving conversion to sales – consideration is significantly above the percentage that are currently driving these brands. On the other hand, it seems that Ford and Holden need to focus on increasing consideration if they are to grow market share.
Prospective new car buyers consider 2.3 brands and 2.9 different models. With over 400 models on offer in Australia, there’s a battle to be had in gaining awareness and communicating benefits to ensure that any car model gets itself into the consideration set.
Brands, price and a long warranty
Among news media readers who are new car prospects, 78 per cent agree that well-known brands are important to them when buying a new car. Price (76%), a long warranty (74%) and safety (74%) are also key to the purchase decision.
49% use news media when forming a short list
In the path to purchase, forming a short list is a key stage in ensuring that a car model is in the consideration set of a new car buyer. This stage includes gaining an understanding of specifications and dealer locations – 49% say that they use news media at this point in the decision making – that’s a bigger role than any other paid media.
Source: Path to purchase research (Research Now) Sep 2016
50% use news media when making the purchase decision
For Toyota, Mazda and Subaru, it seemed that focus needs to be on converting consideration into purchase. Primarily relating to reviews and recommendations, 50% of car buyers say they use news media at the point where they are making their purchase decision. Again, this suggests that news media plays a more important role than any other paid media at this final stage in the path to purchase.
Source: Path to purchase research (Research Now) Sep 2016
News media reaches 94 per cent of Australians intending to buy a new car in the next 12 months – it’s mass coverage. Compared with non-readers, these readers are at least 50 per cent more likely to be prospects for this growing industry. Indeed, readers of national newspaper and the motoring section are twice as likely to be prospects. Furthermore, these two channels have readers that are planning to spend more on the cars that they are buying.
Brand, price, warranty and safety are the key benefits that need to be communicated to new car prospects. We’ve suggested that Ford and Holden may especially need to create awareness and understanding at the point where prospects are forming a shortlist – Toyota, Mazda and Subaru may warrant more focus on the purchase decision stage. For each of these two stages in the path to purchase, some 50% of buyers say they use news media. News media plays a bigger role than any other paid media, influencing potential buyers with mass reach across the target.
1. emmaTM 12 months to January 2017. Readership based on last four weeks. Survey conducted by Ipsos MediaCT, people 14+ ; Nielsen DRM January 2017, People 14+ only. Prospects intend to buy a new car in the next 12 months.
2. Record sales year for 2016 – Federal Chamber of Automotive Industries https://www.fcai.com.au/Sales/2016-new-car-market
3. NewsMediaWorks Path to purchase research conducted by Research Now in September 2016.