Auto Manufacturers, Dealers Put More Coordinated Ad Dollars to Digital - eMarketer

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Auto Manufacturers, Dealers Put More Coordinated Ad Dollars to Digital

Direct response sees greatest share of auto industry’s digital dollars

June 12, 2013

The US automotive industry will spend $5.07 billion in 2013 on paid digital advertising, and that total is expected to rise to $7.80 billion by 2017—a compound annual growth rate (CAGR) of 12.8% between 2012 and 2017, according to a new eMarketer report, “The US Automotive Industry 2013: Digital Ad Spending Forecast and Key Trends.” While growth will begin to taper off this year, the industry’s share of US digital spending is expected to rise throughout the forecast period.

Continued strong growth puts the US auto industry on track to become the second-biggest spender in paid online and mobile media by 2015, surpassing the financial services industry, eMarketer estimates.

US Automotive Industry Digital Ad Spending, 2011-2017 (billions, % of total digital ad spending and % change)

Marketers in the automotive industry will invest approximately 60% of their paid digital dollars in direct-response efforts this year, eMarketer estimates, while brand-focused campaigns will make up the remaining 40%. Search and display will still command the largest chunks of digital spending across the category, with the greatest growth in the areas of mobile, video, social and local.

Regional associations, local dealers and aftermarket providers are increasing their digital spending and directing a larger portion to local online and mobile media. As a result, US automotive digital ad spending at the local level is seeing even more robust growth. The most recent “State of the Industry” report from the National Automobile Dealers Association (NADA) revealed that dealers have dramatically increased their digital ad spending over the past decade, from just 5.0% of spending in 2002 to 26.5% in 2012, primarily at the expense of print media.

Ad Spending Share of US Automotive Dealerships, by Media, 2002-2013 (% of total)

Investments in mobile ads are also growing quickly as US marketers in the auto industry seek out consumers researching vehicle purchases on tablets and smartphones. In October 2012, J.D. Power and Associates reported that the percentage of in-market shoppers who visited an automotive website from their smartphone increased from 17% in 2010 to 31% in 2012.

US Vehicle Shoppers* Who Have Visited an Automotive Website via a Smartphone, 2010-2012 (% of respondents)

Much of this added investment is the result of digital tools changing how auto consumers progress through the research and sales funnel. A September 2012 report from Google, Compete and R.L. Polk coined the phrase “constant consideration,” finding that digital and mobile are “changing the habits of auto shoppers, turning premarket, in-market and post-market phases into a cycle of constant consideration in which brand influence can be won or lost at any post.”

One of the most important outcomes from this topsy-turvy funnel is the realization that automakers and dealers need to work more closely together to intercept prospective buyers at various points of the research process and propel them relentlessly toward a sale.

Forward-thinking marketers have started to re-evaluate ways to bolster their brand presence while also getting buyers into dealer showrooms sooner. In many cases, automakers have significantly increased co-op spending to support their local dealers.

The full report, “The US Automotive Industry 2013: Digital Ad Spending Forecast and Key Trends” also answers these key questions:

  • How much will automotive marketers spend on paid digital advertising in the next five years?
  • How much of their digital budgets are automotive marketers spending on direct-response vs. branding initiatives?
  • How are online and mobile platforms changing the way the automotive industry approaches advertising?

This report is available to eMarketer corporate subscription clients only. eMarketer clients, log in and view the report now.


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