Over Half of All 2014 Auto Manufacturer Ad Spending Will Be Online

automotive digital advertising

My last 3 cars that I’ve purchased for myself have been new cars and I’ve personally witnessed a transformation in the selling cycle and relationship with my dealer. When I purchased my first new car about 15 years ago, I drove it off the lot and never looked back. When I purchased my next new car about 10 years ago, I would receive some direct mail from time to time… but honestly never felt the love from the dealership. They even argued with me on a recall repair. I said goodbye to the brand and the dealer (and my family has bought 2 new cars since).

My current dealership has been a totally different experience. The salesperson still chats with me years later, I have a mobile application where I can request maintenance, everything repaired has been covered under warranty without any argument, the loaner car provided me has been a brand new model, and every aftermarket product I’ve purchased has been more reasonably priced at the dealership. Case in point, the car is ready for new tires and the dealership cost is the equivalent of my wholesale club cost.

As new-car sales slowly but surely climb back to pre-recession levels, the euphoria won’t be enjoyed by the more than 3,500 franchised dealerships and five major car brands that have disappeared in the past decade. What’s left is a smaller, more efficient, and certainly digitally-focused marketplace. Automotive is the second-largest advertising category, behind general merchandise stores, at $35.5 Billion. It’s proving to be a landmark year for digital advertising. For the first time, more than half of all advertising dollars will be spent on digital media. Borrell 2014 to 2015 Automotive Advertising Outlook

The Changing Landscape of Auto Buyers

There’s a pretty amazing transformation happening in the automobile industry. The economic hit our youth have taken are keeping them from buying new cars. They live with parents, they socialize online without the need for a car, and they have high unemployment rates. Millennials aren’t buying a car until they need it.

The economy has also driven the value of used automobiles higher – 28% in the last five years. In fact, there will be twice as many used cars as new ones sold this year – many from the lots of new-car dealerships. This means that new car dealers are becoming much more sophisticated marketers. Dealers are now spending $2,404 per new vehicle — nearly five times what they spend on advertising — in the form of rebates, loyalty programs, contests and incentives.

Auto Manufacturers Have Moved Online


It’s no wonder that over half of all ad spending of auto manufacturers is going online this year, huge news in the industry. Customers are spending their time on social channels, watching videos, and researching their next purchase decision online. Dealers and manufacturers have caught on and have figured out that they first need to retain customers with incredible service and then provide the necessary content and incentives online to attract buyers.

Dealers are discovering that they need to come up with news programming (aka content marketing) on a regular basis. Specials and rebates are their versions of breaking news.

[su_button url=”https://www.borrellassociates.com/industry-papers/papers/2014-to-2015-automotive-advertising-outlook-digital-advertising-reaches-a-tipping-point-nov-14-detail” target=”blank” color=”#000000″]Order the Full Report Here[/su_button]

This site uses Akismet to reduce spam. Learn how your comment data is processed.