Automakers are getting back into advertising’s biggest arena: NFL

After a slump in recent years, automakers are once again busy advertising during the National Football League season.

Toyota Motor Corporation, Hyundai Motor Company and Detroit automakers are among those expected to capitalize on the NFL and its games as key advertising platforms in the coming months. Toyota, in particular, is entering the football season as the “Official Automotive Partner of the NFL,” a first for the world’s largest automaker.

“There [are] “There are so many variables that can impact budgets, but automakers are starting to get back on track,” said Ryan Briganti, head of advertising sales at Paramount's CBS Sports, which airs NFL games every week on CBS and Paramount+. “We have cars that advertise across the portfolio.”

The auto industry has slashed advertising and marketing budgets in recent years because there weren’t enough vehicles to sell. The Covid-19 pandemic and supply chain issues have led to historically low vehicle inventory levels. But vehicle inventory levels have grown amid high interest rates and economic fears, and automakers are turning to live sports, particularly the NFL, to promote new products.

General Motors, First, GM expects to increase ad spending by more than $400 million in the second half of the year compared with the first six months to promote new or redesigned vehicles. GM declined to discuss specifics of the spending, including how much of that amount is tied specifically to NFL ads, but reiterated that it remains significantly lower than historical levels.

The NFL is a critical part of the automaker’s advertising strategy. During last year’s NFL season, from September to February, about 44% of national TV auto ad budgets went to the NFL, according to media planning and data firm Guideline. That compares with 31% of budgets across all industries, the firm reports.

“The impact of the NFL on the automotive advertising industry is really, really big,” said Alberto Leyes, head of product strategy at Guideline.

NFL games dominate ratings on traditional TV. According to Nielsen, NFL regular season games averaged 17.9 million viewers last year. The Super Bowl, meanwhile, averaged 123.7 million viewers.

The NFL’s consistent ratings — despite customers fleeing paid TV bundles — have led to a surge in the value of media rights deals, which in turn have been a major driver of NFL team valuations. Today, an NFL team is worth an average of $6.49 billion, according to CNBC’s Official 2024 NFL Team Valuations.

The advertising market as a whole has shown signs of recovery this year, particularly for streaming and digital players. Across the board, live sports still drive the most ad spend, with or without declines.

“We’ve seen much stronger growth in 2024 than we’ve seen in any post-COVID year,” Leyes said of total media spending. “We know we’re going to have a strong second half of the year as well, with the return of the NFL.”

According to advertising data company iSpot, automakers were the most-watched brand sector last season, accounting for more than 10% of TV ad impressions.

Disney-esque, which airs “Monday Night Football” on its TV networks and streaming service, namely ESPN, has seen “positive, sustained double-digit growth over the past five years” when it comes to automakers’ ad spending, said Andrew Messina, senior vice president of sales at Disney Advertising. Messina noted growth, especially from Hyundai, Mercedes-Benz, Nissan engines and Chrysler parent company Stellantis.

According to Messina, brands have also begun to expand their commitment by including sponsorship opportunities in addition to advertising space.

Automakers own “key marketing real estate” on “Sunday Night Football,” which airs on from Comcast broadcast network NBC and streaming service Peacock, said Mark Marshall, NBCUniversal's president of global advertising and partnerships. While traditional TV still drives the bulk of auto advertising, there has been an increased presence on Peacock, which has been streaming exclusive NFL games for the past year.

Guideline reports that viewership of NFL broadcasts increased about 7% last season, while ad spending on NFL programming doubled that pace by 14%. Auto ad spending is up 17% over the past two seasons and is expected to increase again this year, Leyes said.

“We saw 139% year-over-year growth among automotive brands in particular as they look to be more precise about their media spend in the complex U.S. market,” said Jenny Wall, Chief Marketing Officer at TV measurement company VideoAmp.

Toyota, as the “official automotive partner of the NFL,” launched a new advertising campaign this week for the NFL season called “Roll Deep.”

It debuted an “anthem spot” for the campaign. Toyota also played a prominent role in the NFL's first game of the season on Thursday night.

For Toyota, this marks the start of a “season-long program of content across linear broadcast, digital, paid social and in-game formats,” the automaker said.

Toyota decided on a new partnership with the NFL after an overall evaluation of its marketing and advertising spending, said Dedra DeLilli, vice president of marketing communications for Toyota North America.

The automaker has advertised and sponsored NFL games before, but felt the best media investment was to expand the partnership and become the league's official auto sponsor.

“The most compelling aspect of this partnership is that we have access to 218 million highly diverse, highly engaged fans of the NFL. That’s nearly 72% of the population. You won’t find scale and diversity like this in any other American sport,” DeLilli said.

“It's a match made in heaven,” she said.

DeLilli declined to disclose Toyota's advertising spending for the NFL. It follows a successful partnership with this year's Olympic and Paralympic Games in Paris.

Stellantis is expected to launch new ads for the NFL season soon, including around its Jeep brand, but a spokeswoman declined to provide further details.

Hyundai continues to play a prominent role in NFL broadcasts, including as the title sponsor of NBC's Sunday Night Football kickoff show for the seventh consecutive year.

The company declined to provide details about its spending plans, but Hyundai Motor America CEO Randy Parker said the company's spending is expected to remain flat compared to last year.

“We want to reach consumers when they're watching live television,” he told CNBC. “We think that's really, really important from a strategic perspective. … Particularly with sporting events, you see viewership increasing year over year.”

Disclosure: Comcast owns NBCUniversal, the parent company of CNBC. NBCUniversal owns NBC Sports and NBC Olympics. NBC Olympics is the U.S. rightsholder for all of the Summer and Winter Games through 2032.