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Online Video And Targeted Display Dominate In Local Digital Auto Dollars

The auto sector has long been a bellwether not only for advertising, but for all of media and marketing. According to a new report from local market research firm Borrell Associates, car sales will be up this year, but guess what? Local auto ad spending  is down for newspapers, radio, and even the stalwart of TV, but rising for direct mail, online and mobile.

However, local digital video advertising for cars will also rise over the next several years. These findings align with overall industry trends in digital media that see more money moving to online video and targeted display.

To set the scene, Borrell predicts local auto advertising will reach $32.8 billion this year, up 2% over last year, with car sales up 8%. However, auto advertising will be down 29.3% for newspaper, 15.9% for radio and 16.7% for broadcast TV. On the flip side, expect a 22.9% rise in direct mail, and an 18.7% increase in online and mobile. The digital video sector of local auto advertising is poised for more than four times growth in the next five years as online auto advertising morphs from listings style-ads to more branding-centric ones, and also wins share from traditional media.

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 “Within five years, annual spending by dealers and manufacturers on digital video advertising  will go from $2 billion to more than $9 billion – most certainly at the expense of local radio and TV,” Borrell said in its report. “Our forecast predicts continued growth in spending on digital media as manufacturers and dealers concentrate marketing investments on critical media where people are more apt to be.”

Already, online video has become one of the most important mediums in digital marketing for cars. Borrell said targeted display and online video are the most popular digital ad formats for online local auto ad dollars, at about 25% each of the share of dollars, putting online video ahead of display, email and paid search. These categories are projected to hold their shares over the next five years.

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