Auto Industry Forecast To Spend $11B On Local Advertising in 2019

Research released Wednesday shows that marketers in the automotive industry -- which consists of dealers, local dealer associations, and manufacturers -- remain one of the highest-spending categories in TV advertising, but the amount this industry segment spends on digital advertising continues to grow steadily.

Vertical search, a part of online advertising, is the largest digital automotive channel, according to data from BIA Advisory Services.

Mark Fatrik, an economist at BIA, believes the gains in vertical search are more a result from sites like building out engines, rather than the return on investment seen from search.

BIA's analysis estimates that digital advertising will represent nearly 41% of ad spend in 2019, and digital media spending within the overall auto vertical will represent 49.3% of total local advertising in 2023.

Last week, BIA released data detailing location-targeted ads, estimating that they will make up the majority of mobile ad growth. About 35.5% of businesses use mobile location ads that create awareness, and nearly 24% use mobile search.

Automotive dealers, local dealer associations, and manufacturers will spend approximately $11.3 billion on local advertising nationally in 2019, BIA Advisory Services estimates.

The amount represents 75% of the $15.1 billion spent by auto industry professionals, and makes auto dealers the largest of the five sub-verticals. The remaining spend comes primarily from tire dealers, auto repair and parts shops, as well as other vehicle dealers.

Traditional media will receive the greatest share of the ad spend, followed by the amount spent online. Auto dealers and manufacturers are projected to increase their use of digital channels significantly during the next four years, adding $324 million annually from 2019 to 2023. 

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