• by Skip Brand , April 8, 2014

The auto industry is usually a first in everything digital — and programmatic is not an exception. The auto digerati are innovators and early market leaders who are always the first to jump into new formats and strategies. You do not visit Detroit just for the hockey, to see Ann Arbor or to get a beer with Kid Rock. The auto industry’s investment in dollars is time well spent in digital advertising. They really scale programmatic direct deals (auto up-fronts), programmatic private exchanges and real-time bidding for performance, as well as branding.

Finance, travel, CPG, retail advertisers, agencies and digital companies don’t have it as good as anyone who gets to develop new and innovative programmatic solutions for the digital enthusiast in the auto sector. Listening to auto brands and auto-focused companies can provide guidelines and practical insights for programmatic direct, private marketplaces and real-time branding. Some of the digital industry’s best learnings are found at J.D. Powers’ yearly event in Las Vegas. 

Programmatic Direct (Auto Digital Up-Fronts)

In the greater-than-$20B TV and Cable Up-fronts, media companies’ stocks soar or fall based on these exclusive relationships, presentations, commitments and excitement judged publicly in pure dollar investments/commitments. The digital up-fronts and especially the auto’s portion of the up-fronts lead the industry. Detroit and Los Angeles automakers that buy the make and model, in addition to reach, lead in spending. The industry has long delivered an autos audience, but now programmatic delivers the actual people who are in the market to buy a car. The endemic U.S. auto digital “performance spend” is roughly $750M and dominated by media companies like Jumpstart Automotive Group. The auto OEMs spend nearly $2B for car launches and brand building digitally after kicking off their spend during the Super Bowl. Today members from Team Detroit and others in the auto agency world predict that more than 50% of the digital media will be spent up-front and programmatic. Nick Matarazzo, CEO at Jumpstart, best describes the auto digital industry as strategic and innovative, but always wanting to scale with efficiency, partnering with companies who understand their consumer and cater to their needs. 

Programmatic Private Exchanges

The auto industry has had larger private extranets, exchanges and co-ops for longer than any industry, and this applies to programmatic private exchanges, as well. Our auto industry has pushed the limits to spend brand dollars with private exchanges not only with the likes of Google and endemic auto specific players like Jumpstart. They are also partnering with data players like Datalogix, as well as many of the premium publishers like Conde Nast. These players work directly with the top auto brands like Cadillac, Ford, VW and many others. The ability of the digital auto executives to test, innovate and then scale has made the programmatic private exchange a big business for a company like the hot new IPO’ed Rubicon Project where trust, transparency and viewability help these premium auto brands launch their new lineup of cars. Brand skepticism has been reduced with more brands building private exchanges and beginning premium programmatic tests. 

Real Time Branding (RTB)

Since 2012, General Motors and Toyota have been top spenders, as well as investors in RTB. Automakers have been leaders using their own first-party data, as well as utilizing data players for both Tier 1 (manufacturer) and Tier 2 (both OEM and regional dealer) digital auto advertising. The best up-front commitments from the auto industry come in the form of digital up-fronts (programmatic direct). The top automakers continue to scale with private exchanges and the huge jump in RTB dependence is due in part to the associated measures like viewability, MOAT engagement measures and complete transparency. The auto industry will lead all others in programmatic investment, spend and technology, even CPG. An investment in time with an auto industry partner pays off for start-ups and big media companies alike, due to testing for performance and then investing big time for scale. 

Digital programmatic up-fronts, private programmatic exchanges and RTB to lead on the bleeding edge by the auto vertical in Detroit and Los Angeles, as well as in Europe.