Digital to Account for Over 50% of Auto Advertising

Wed Nov 5, 2014

Kathy Crosett

Borrell Associates is out with a new report that predicts what’s in store for media companies as they Car shoppingcontinue to adjust to the digitization of their industry and for auto marketers as they face a new competitive landscape. For the first time, analysts see  spending on traditional media formats shrinking to less than 50% of the total.

2014 has been a good year for the auto industry with sales up 5% so far. But dealerships can’t rest easy. The focus on profitability is razor-sharp with automakers still looking to cut dealerships and brands that aren’t showing their worth.

Most dealers are selling nearly 20% more new vehicles than they were before the recession. They’re also selling more used cars with an average sticker price of $20,000.

Dealers are also changing how they’re promoting their products. Part of this shift is being driven by the digital consumer. Most consumers arrive at the dealership with a good idea of what they are looking for because they’ve extensively researched their options online. To capture prospective customers who are in the early stages of the purchase process, dealers are spending more on online marketing channels.

This shift means that per-vehicle advertising costs have dropped to $522 or nearly 20% in the past few years. At the same time, dealers are spending about $2,404 in other types of promotions to sell their cars. These promotions range from rebates to loyalty programs and contests to incentives.

Dealers still have to get out the word about these promotions. They often use content marketing on their own websites or other digital formats. To succeed in the new world of automotive marketing, more traditional media companies will likely be promoting services such as content creation and management to help dealers achieve their goals.

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About Kathy Crosett

Kathy is the Research Director for SalesFuel. She holds a Masters in Business Administration from the University of Vermont and oversees a staff of researchers, writers and content providers for SalesFuel.

View all posts by Kathy Crosett