2024 is finally the year that the auto industry is expected to make a full recovery from the COVID-19 pandemic. But that doesn’t mean auto dealers are comfortable spending as much on advertising as they did pre-pandemic just yet. While traditional ads are important, dealers should focus more on digital strategies going forward.

Auto Dealers Invest in These Digital Strategies to Boost Revenue

Advertising Opportunities for 2024

According to a report from Insideradio, auto dealerships spent $8.9 billion on advertising in 2023. While that’s not as high as the industry’s peak of $9.82 billion in 2016, it’s the highest of the 2020s. And it only has $35 million to go before it reaches the $9.25 billion spend from 2019.

There’s a chance that ad spending will return to normal this year since sales are anticipated to do the same. “In 2024, we expect that inventory levels will increase,” says NADA’s Chief Economist in the Insideradio report. And “the industry will see month-to-month sales and inventory patterns that were considered normal before the turbulent few years caused by the pandemic and microchip shortage.”

Overall, Insideradio says that consumers looking for new vehicles will have many more to choose from compared to last year. That on top of yearly sales and other events means there will be a lot to advertise in 2024.

According to AudienceSCAN on AdMall by SalesFuel, 19% of U.S. consumers plan to buy a new car or truck within the next year. And data from LoopMe shows that 31% of these shoppers plan to make their purchases within the next six months. So, it’s time to get started on your client’s digital strategies to get ads in front of these shoppers.

What Media Types to Use

According to Insideradio, in 2023, the typical dealer’s ad budget is allocated between these ad media types:

Third-Party Listing Sites: 20.7%
Search Engine Marketing: 19.9%
SEO Website Optimization: 19.5%
Social Media: 12.1%
TV: 10%
Radio: 9.5%
Direct Mail: 5%
Newspaper: 2.2%

Gone are the days when TV ads were the go-to for auto dealerships. Now, they’re focusing more on digital strategies.

Which digital media ad types should your client be using specifically? That depends on which types of vehicles they want to promote and sell.

AudienceSCAN on AdMall by SalesFuel has dozens of vehicle shopper profiles, such as:

New Car/Truck Shoppers
America First Vehicle Shoppers
Electric Vehicle Shoppers
Diesel Car/Truck Shoppers
Luxury Car Shoppers
Shoppers of top vehicle brands like Ford, Nissan, Toyota, etc.
And so many more

Each features information such as which types of ads influenced them to take action within the last year. You can also find out their shopping motivations and demographic information, such as household income. With that information, you’ll know exactly which types of ads to include in your client’s digital strategies.

Who to Target

If you want to move your client’s new inventory quickly, their ads should target consumers who want vehicles now. Who are those shoppers? According to LoopMe, they’re consumers between the ages of 25 and 44.

25–34-year-olds are:

27% less likely than average to wait at least a year to buy a new vehicle

35–44-year-olds are:

20% less likely than average to wait at least a year to buy a new vehicle
66% more likely than average to plan to buy a vehicle within the next three months

Overall, according to Kantar:

63% of Gen Zers are in the market for new vehicles
57% of millennials say the same
47% of Gen Xers also want new vehicles
Only 29% of baby boomers want new vehicles

So, make sure your client’s digital strategies include ads that feature actors and models in these age ranges.

This information also reinforces the importance of digital strategies. Most consumers do at least some of their pre-purchase research online. But some do the whole process, from research through purchase, from their computers and mobile devices.

A recent article from Wards Auto says that millennials are the generation most likely to buy their vehicles online.

2024 is set to be a comeback year for dealerships! Make sure your client’s digital strategies are ready.

Photo by: Ivan Kazlouskij