Automotive advertising is projected to shrink 21% in 2020 across 10 major markets around the globe, compared to 9% for the ad market as a whole, according to new research from Publicis Groupe media agency Zenith.
However, spending in the category is poised to outperform the market in both 2021 and 2022, with 10.5% growth in 2021 and 11.4% growth in 2022. Plus, the worst hit markets will benefit from the biggest recovery next year. U.S. ad spend, in particular, is down 21.9% for 2020 but is forecast to recover to 11.6% in 2021 and 17.3% in 2022.
Digital advertising is the only channel forecasted to grow between 2019 and 2022 with Zenith predicting digital will be the only channel in which auto brands spend more in 2022 than in 2019.
Digital advertising is the most important single channel for auto brands, but auto advertising is less digital than the market as a whole: auto brands spent 42% of their budgets in digital channels in 2019, while the average brand spent 49%.
Australia and Canada are the most advanced markets for automotive digital advertising, each devoting more than 70% of total spend to digital channels.
Zenith believes digital will rise as companies make better use of their customer data to target digital ads more effectively.
Television is the second-biggest channel for auto advertisers, which spend substantially more of their budgets in television (32%) than the average brand (27%).
Television is still a key platform for their mass-audience brand-building, though Zenith expects brands to focus more on premium digital video to compensate for declining prime-time TV ratings. Auto ad spend on TV is likely to drop 6% between 2019 and 2022.
Out-of-home and cinema are forecast to recover strongly in 2021 and 2022 from steep losses in 2020, which were caused by social distancing restrictions. Still, OOH auto ad spend is likely to decline by a net 10% between 2019 and 2022, while cinema ad spend is expected to decline by 16%.
Radio, a particularly relevant medium given that a large proportion of radio listening takes place in the car, will remain an important media channel, declining only 7% between 2019 and 2022.
Auto brands spend substantially more on newspaper advertising (11%) than the average brand (7%). That’s primarily due to two markets, Germany and India, where newspapers still have high reach among what Zenith describes as well-educated, wealthy readers. Nonetheless, newspaper ad spend globally will be 27% lower in 2022 than in 2019, and magazine ad spend will be 28% lower.
“The coronavirus recession has been particularly tough for auto brands, making it especially important for them to adapt to consumers’ changing behaviors and needs,” said Jonathan Barnard, Head of Forecasting, Zenith. “Brands that have got closer to their customers online, by investing in first-party data and personalized communication will be well-positioned to benefit from resurgent demand during the upturn.”
Zenith’s Automotive Advertising Expenditure Forecasts tracks Australia, Canada, Germany, India, Italy, Russia, Spain, Switzerland, the UK and US, which collectively account for 57% of all global ad spend.