How Is the Auto Industry Spending on Programmatic Ads?
The auto industry, amid shifts like the electric-vehicle revolution and pandemic impacts, is adapting its advertising strategies by maintaining or slightly increasing overall media spend to $2.7 billion between 2021-2022 while dealerships, especially used car sellers, sharply cut traditional ad budgets, leading to a potential rise in programmatic ad spending focused on SUVs, pickup trucks, and import models to maximize ROI in a competitive and volatile market.
The auto industry is experiencing significant changes, including the ongoing electric-vehicle revolution and shifts caused by the COVID-19 pandemic. For example, Tesla sold more cars than BMW in 2021, and used car prices surged during the pandemic before returning to normal levels. The CEO of Ford has even supported the idea of selling cars online, similar to Tesla's approach. With increased competition, auto advertisers are under pressure to attract consumers, whether to physical or virtual showrooms.
Automotive Programmatic Advertising Trends
Automotive advertisers have faced a volatile market. In 2019, the number of advertisers buying programmatic ads remained nearly flat, with 2,372 brands in 2019 compared to 2,381 in 2018. Despite a decline in car sales that year, brands still sold over 17 million cars. SUVs accounted for the largest share of programmatic ad spending at 26%, followed by pickup trucks at 12% and sedans at 10%.
Between July 2021 and July 2022, automotive brand/model advertisers spent $2.7 billion on all media formats, a 2% increase from the previous year. However, dealerships, especially those selling used cars, saw the biggest declines in ad spending: used car dealerships decreased spending by 51% year-over-year, and auto dealerships by 42%.
Much of these decreases were due to reduced TV spending, but they also signal how advertisers may allocate budgets in 2023. If budgets continue to shrink due to market instability, programmatic ad spending may increase as advertisers seek to maximize their return on investment—something traditional ad formats may not offer as effectively.
Toward the end of 2022, automotive advertisers increased their spending by more than 15% week-over-week (December 12, 2022 vs. December 5, 2022), reaching around $100 million. The top advertised models were import autos, pickup trucks, and SUVs. As inventory levels stabilize and prices become more consumer-friendly, programmatic advertising is expected to follow suit. However, economic recession concerns may impact car buying and, consequently, advertising budgets.
Which Auto Advertisers Will Spend in 2023?
While the state of automotive advertising remains uncertain, it is likely that auto models and brands will continue to account for the majority of spending. Additionally, there is expected growth from advertisers in the electric vehicle segment and travel-related categories, such as RVs, as consumers resume travel.
Electric vehicle advertising is expected to increase as EVs gain mainstream acceptance, with brands like Hyundai, General Motors, and Lucid Motors likely to boost their ad spending. Tesla, however, may continue its historical strategy of minimal advertising. Travel-related advertisers, particularly those associated with RVs, are also expected to increase spending as people return to road travel after several years.
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