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Wednesday, June 8, 2016

Robust Growth In Digital Ad Spending For Auto Industry


Ad spending on paid digital media by the US automotive industry will hit $8.71 billion in 2016, up 17.3% year over year. This figure will climb to $14.14 billion by 2020, for a compound annual growth rate (CAGR) of 13.7% from 2015 to 2020. While growth will begin to taper off this year, the industry’s share of US digital spending is expected to rise throughout the forecast period, as explored in a new eMarketer report, “The US Auto Industry 2016: Digital Ad Spending Forecast and Trends.”

eMarketer’s forecast calls for consistent double-digit growth in digital ad spending for the auto industry through 2020, following a 2015 that saw digital ad spending surge nearly 22%. Indeed, eMarketer expects the auto industry will have the second-highest CAGR of all US industries during the forecast period, trailing only entertainment (13.8%).

eMarketer likewise anticipates growth in the sector’s share of total US digital spending, rising from 12.7% in 2016 to 13.4% by 2020. Automotive will continue to rank as the second-largest industry segment in the US for digital ad spending after retail, keeping it near the forefront of digital marketing for at least the next several years.


More recently, car buyers in the US have been energized by improving wages and confidence in the job market, low gas prices and low interest rates—all of which have lifted US car sales to record growth in 2015. According to Autodata Corp. data, cited by The Wall Street Journal, automakers sold 17.5 million cars and light trucks in the US last year, up 5.7% from 2014. And economic signs are pointing to another healthy year for domestic auto sales in 2016. These lofty sales projections and increased demand bode well for marketing budgets, as automakers compete to win sales in 2016.

The release of new models will also drive up spending this year. A March 2016 JPMorgan Chase analysis of the top 100 advertisers worldwide stated that several automotive companies, including Toyota and General Motors (GM), planned to spend more this year on marketing to support upcoming new vehicle releases.

Figures from Kantar Media Kantar Media, which included most nondigital formats but excluded digital in 2015 because of methodology changes, placed GM, Toyota and Ford Motor Co. at the top of their list of US auto industry ad spenders in 2015. GM spent more than $1.41 billion, taking the top spot. Toyota and Ford ranked second and third, with more than $967 million in spending each.

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