Auto sales have come back in a big way since the recession made a deep cut into the business for most dealers. These business owners say they’re looking at next year with an eye on keeping costs under control. For many, this means holding the line on their advertising budgets.
A recent Automotive News survey revealed that auto dealers are studying both the size of their ad budgets and their media mix. In the past year, the average amount spent by dealers on new vehicles dropped to $628. About half of surveyed dealers will not increase their ad spending next year. And, the half that will spend more plan to add less than 10% to ad budgets for 2013.
Even those who don’t up their ad budget in total will emphasize digital in the 2013 media mix. While about 2/3’s of dealers will spend more on digital, only 1/3 will increase their spending on traditional formats like TV and print. Dealers say as much as 35% of sales come from digital advertising. In addition, dealers who want to connect with new car buyers entering the market believe digital is the way to go. The digital world is where younger consumers spend their time. Dealers also fear TV and radio are not as effective as they used to be because people have ways to avoid seeing or hearing the ads.
Dealers also like the easy-to-measure ROI offered by digital formats. One dealer interviewed by Automotive News noted that he could easily track the number of leads coming from his spending on autotrader.com and could adjust the amount accordingly. The level of detail regarding results and ROI available from online ad spending may explain why a significant percentage of dealers will increase digital spending between 11% and 20% in 2013. Another 5% believe so strongly in the benefits of digital that they’ll spend 30% more on the format next year.
Marketers who want to know more about consumers who plan to purchase vehicles between now and the end of the year should check out the Auto Shoppers Forecast available from the Research Store on ad-ology.com.
[Source: LaReau, Jamie and Barkholz, David. Deals cautious about 2013 ad dollars. Autonews.com. 15 Oct. 2012. Web. 2 Nov. 2012]