Auto Industry to Spend $7.3B on Digital Ads

Programmatic Price Competition Grows For Auto Marketers. The auto industry, everåÊcompetitive when it comes to traditional advertising, has brought that competition to programmatic buying. By leveraging data fromåÊcar makersåÊand dealers, brands are able to target and optimize their digital advertising through data-​driven programmatic, and the competition is heating up in that space.

According to data released by DSP and DMP Turn, price competition among auto companiesåÊwas at an all-​time high in early 2015 andåÊhas since stabilized. Turn's Advertising Intelligence Report 2015 tracks data from the Herfindahl-​Hirschman Index, which measures the level of competition, against spend data from the Turn platform.

Overall, the automotive industry is one of the top digital ad spenders, below retail, according to May data from eMarketer. The researcher predicted the auto industry will spend $7.3 billion on digital advertising this year,åÊand that figure will riseåÊto more than $12 billion by 2019.

Within that digital spending, programmatic is starting to become a staple for many automotive advertisers, Kimberly Maul wrote in adexchanger​.com.

Turn says thereåÊwas a definite drop in the HHI in January 2014 for the automotive market, which means there was more competition during that time. The HHI has stayed low, especially compared to the previous HHI that Turn analyzed, and the swings are smaller compared to data in late 2014.

Across industries and platforms globally, Turn found that the Americas had the most consistent competition and spend in programmatic. Meanwhile, display has stabilized in EMEA and started to reach maturity in APAC, but the other platforms have room to grow.

The auto sector is one of the top industries for direct response advertising. EMarketer saidåÊ60% of digital spending in the industry was for direct-​response advertising, and 40% went to brand advertising. This was only behind travel and financial services industries.

"Programmatic video is one keyåÊfrontieråÊfor car companies. Online video company Innovid transacts more volume of advertising for car companies than for any other vertical, according to CTOåÊTal Chalozin. One of Innovid's clients is Chrysler and the two companies recently debuted a new programmatic initiative that connects consumer data to over-​the-​top content devices such as AppleTV or Roku," Maul wrote.

"For Hulu, 60% of their viewership is done on a connected TV," Chalozin said. "The problem is that you don't do browsing on those devices, so you lose that data." Innovid helped Chrysler create audience segments at a household level, for instance by allowing the brandåÊto leverage user interactions onåÊCars.com to target video adsåÊon Hulu.

Such advanced segmentation and reach measurement across devices is the future for car makers, according to Turn's Knight,åÊbut it's still early days.

"Obviously when you're dealing with automotive brands, segmentation is massively important," heåÊsaid. "There is a lot of nuance that a good media buyer or media services professional can bring to automotive brands, utilizing these audience features, and that's one of the things that programmatic is all about."

So just what are car shoppers interested in? If all this money is going to be invested in digital advertising for auto brands, then it will pay off to be the one who knows the car shopper best. AudienceSCAN tells us that 5% of shoppers used Cars.com's websites/​mobile apps to research or purchase a specific product or service in the past 6 months. And those cars​.com users are into fitness: they're 96% more likely than average to belong to gyms. Also, they're 143% more likely than average consumers to drive sports cars. 33% want to go to the next auto show too. Cars​.com shoppers are 200% more likely than average to have used a click-​to-​call button/​link.

AudienceSCAN data is available as part of a subscription to AdMall for Agencies. Media companies can access AudienceSCAN data through the Audience Intelligence Reports inåÊAdMall.

Courtney Huckabay
Courtney is the Editor for SalesFuel Today. She analyzes secondary customer research and our primary AudienceSCAN research. Courtney is a graduate of Middle Tennessee State University.