Until the COVID-19 virus struck residents of the United States and the country's economy, pundits had been predicting another big year for retail sales — with the exception of new vehicles. New vehicle advertising drove consumers to put 17.04 additional cars and trucks on the road in 2019. This year, thanks to the pandemic, that number is likely to be far lower — perhaps 16.48 million units, predicts Borrell Associates. The NADA is slightly more optimistic, predicting a 2020 level of 16.8 million units sold. That change, along with several others, is disrupting the automotive advertising market. Here's what today's marketers are focused on to get new vehicles off of the lot.
New Vehicle Advertising Market
The $33 billion automotive ad market broke out as follows last year in terms of who is doing the spending:
- Manufacturers 32%
- Franchised dealers 53%
- Independent dealers 9%
- Dealer association 4%
- Private parties 2%
Of the $33 billion in this ad spending, about $26 million will go to new vehicle advertising this year. That number sounds substantial, but in the past few years, it has, in fact, been shrinking by 3.1%. The drop in spending is attributable to a number of factors.
Borrell Analysts points out that while the number of drivers has been increasing over the past two decades, auto sales have not. Even with great financing packages and incentives, some buyers remain cautious about new vehicle purchases. In 2019, more consumers were opting to purchase certified pre-owned vehicles from new car dealers to keep their costs down.
What Today's Marketers are Focused On
So, what are today's marketers focused on? The shifts in the advertising technology mean dealers and vendors are emphasizing the “availability, pricing and financing” of new vehicles through digital messaging instead of using traditional media for branding campaigns.
In fact, 40% of the automotive ad market now goes to targeted display and streaming video. eMarketer predicts that automotive sector operators will spend $6.22 million on digital video ads this year. In addition, OTT sellers have been able to boost sales by convincing auto marketers to buy streaming video time.
Your local auto dealers are likely pulling back on their TV ad spending. You can help them sell more of their cars by targeting likely auto purchasers in the formats that influence their decisions. AudienceSCAN has profiles on all the major automotive brand customers, complete with lifestyle and purchasing influence data. The profiles are available at AdMall by SalesFuel.