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Dave

Toyota to spend more R&D, less on TV ads

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Television ads are enormously expensive — not just the cost of airing them, but also of producing them to the standards that buyers are used to. 

According to this Reuters article, Toyota will slash sales and marketing costs in order to dump more money into research and development, as it tries to catch up in autonomous vehicles (where it had an early start, around twenty years ago, with technologies such as adaptive cruise control/braking). Marketing and general expenses were around $25 billion last fiscal year; total profit was around $22 billion, a 9% margin.

Toyota has already cancelled contracts with ad agency Dentsu’s unit in China, complaining of extravagant spending on a ride-and-drive and auto show display; and is targeting media/promotional outsourcing, hoping to gain more knowledge of how the money is spent and then spending it more effectively. Car show displays are very expensive, which has led some automakers to withdraw from non-strategic shows entirely — with a large stand costing around $10 million.  Read more at Reuters.

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