Are You Ready for the Brave New World of Auto Advertising?
Your local auto dealers may be anxious to see 2018 in their rear windows. After selling 17.25 million new vehicles last year, dealers will find it difficult to achieve those same levels this year. Auto advertising is also undergoing huge changes. Spending is down this year, and manufacturers have adjusted how they’re handling co-op advertising.
Borrell Associates, in their new auto advertising outlook report, expects total auto industry ad spending to come in at about $34.4 billion for the year. That’s a serious drop from last year’s numbers. In percentage terms, here’s what the change looks like for 2018:
- Spending by dealers: -6.6%
- Spending by dealer associations: 0%
- Spending by manufacturers: -9.5%
Borrell analysts also took a look at what dealers are doing by media format this year. As you can see, only cable TV and cinemas have increased:
- Broadcast TV -27.7%
- Cable +13.2%
- Cinema +3.1%
- Direct mail -12.0%
- Newspapers -8.4%
- Online -3.9%
- Other Print -18.5%
- Out-of-home -12.8%
- Radio -10.0%
While auto dealers may have cut online spending this year, both manufacturer and dealer associations have increased their online spending, by 9.4% and 15.0%, respectively. According to Borrell analysts, “marketing services are likely to get far more attention as manufacturers and dealers spend more time and money on their ‘owned media’ channels in the future.”
Co-op Advertising Levels
At Salesfuel, we’ve noticed another trend. In our AdMall service, we maintain co-op plan data for auto manufacturers. In the past few years, these manufacturers have shifted the way they support auto dealers with co-op money. Manufacturers continue to make co-op money available for traditional media formats like TV and radio. However, they’ve consolidated some of the digital funding availability. In some cases, dealers that want to participate in these programs are required to use the turnkey vendors for access to co-op funding for formats like paid search or mobile apps. These vendors often have a nationwide presence and may be coordinating paid search campaigns for all dealerships in a specific region or on a national scale.
Other manufacturers have changed how they fund the cycle of co-op advertising. Historically, auto manufacturers issued a co-op plan that lasted for an entire year. Today, we’re finding some companies allocate funds on a monthly or bimonthly cycle and tie the availability of these funds to the unit sales of new or used vehicles.
The good news is that Borrell is predicting a slight rebound in auto advertising for next year. Start positioning your company now to capture these additional funds. And, to learn more about the kinds of co-op advertising funds your dealers may have access to, check out the details on AdMall from Salesfuel.