A Look at Auto Industry Ad Trends

Maegan Buckler  | 

For the first time in nearly a decade, auto sales are slowing slightly (between 1.8% and 6% depending on your source) and car companies are shifting marketing gears in order to keep profits apace. The record-setting sales rate of 2016 has cooled, and automakers and dealers are now exploring the advertising strategies that will fuel growth in a market characterized by high rates of vehicle ownership and fully loaded inventories at dealerships. Some companies are simply trimming ad budgets to mitigate anticipated shortfalls. Others are taking more proactive approaches, amping up their advertising in order to capitalize on the continuing convergence of TV and video and a growing proliferation of ad units and platforms. Here are a few key trends.

Digital Moves into the Fast Lane
Last year we noted how the auto industry’s spend on digital vs. traditional campaigns was higher than in any other category except retail. And that holds true this year, in spite of the slowdown in auto sales. Spending on digital ads in the auto category will rise 16.9% in 2018 and is expected to grow steadily after. Fueling this growth is the appeal of over-the-top (OTT) and connected TV (CTV) and their potential to marry the benefits of traditional television with digital marketing capabilities. Look for automakers to capitalize on digital’s potential for behavioral targeting of buyers, especially incumbent digital buyers, and to use emerging ad tech to find their audience with precision and at scale.

Video is a huge part of this effort, and its importance is reflected in how brands are upping spending on OTT. eMarketer’s most recent report on auto industry ad trends cites an Interactive Advertising Bureau and Advertiser Perceptions study that finds a majority (64%) of auto advertisers buying cross-platform package deals with cable and satellite providers. They’re also using video to drive engagement on social media and drive programmatic growth. As one of the biggest TV advertisers, the auto industry is worth watching for how it’s incorporating digital into the overall marketing mix.

TV Remains Dominant
Speaking of TV…while some of the investments in digital are coming at the expense of TV expenditures, TV is still the primary medium for auto brands. Historically it’s been about the branding opportunities TV offers through its reach, but a new Video Advertising Bureau study suggests there may be additional benefits, as well. Specifically in how TV ads steer consumer traffic to websites. The VAB study looked at the 24 car companies spending the most on TV ads and found a strong correlation between TV investments and website visitors. Those companies that increased TV ad budgets by 15% got 50% more unique visitors and those that cut spending experienced a 30% drop in visits. TV’s power clearly extends beyond the living room.

Going Mobile
eMarketer reports that automaker spending is keeping pace with mobile shopping traffic mostly because mobile generates more traffic than desktop. As a result, automakers are exploring innovative ad products that capitalize on the immediacy and intimacy of mobile with apps like Chatbots that have the potential to play a larger role in mobile advertising. Look to Kia to see how Chatbots may figure in the future of auto industry advertising.

What’s clear is that the automotive category is one of the biggest advertising innovators and warrants a close eye from marketers navigating the shifting terrain.

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