Forecast: Slight Increase for Auto Radio Buys

Advertising expenditure by automotive brands will grow by 0.8% in 2019, down from 1.5% in 2018, according to Zenith’s inaugural Automotive Advertising Expenditure Forecasts, issued Monday. Total auto expenditure this year will be nearly $35.8 billion globally, reports MediaPost.

According to the study, auto brands are expecting a tough 2019. They face continued tension in trading relations, particularly between the U.S. and China, and the possible imposition of car import tariffs in the U.S. making it more expensive for manufacturers to source raw materials and parts, as well as to sell across borders.

Automotive advertising is at a crossroads, according to the new report. Automotive brands are particularly dependent on television advertising, which accounted for 54.5% of category spend in 2018. That was well above the 32.9% global average across all categories.

The ongoing declines in linear TV ratings have left the auto companies with higher prices and lower reach. Auto firms have found it more difficult than brands in other categories to make full use of the possibilities of internet advertising — almost no one will finalize an auto purchase online.

In some ways, auto brands are behind the market as a whole in embracing internet advertising, spending 22.9% of their budgets online in 2018, compared to the global average of 40.6% for all categories.

Zenith predicts the internet’s share of automotive ad spend will rise to 25.6% by 2020, in part because consumers now conduct much of their research and consideration of auto brands online.

Apart from print, which continues to suffer from the ongoing decline in circulation figures, the rest of the traditional media are holding on to automotive advertising. Zenith expects radio, cinema and out-of-home to either maintain or fractionally increase their share of automotive advertising between 2018 and 2020.

Radio, which many consumers experience in their cars, works well for automotive brands, attracting 7.3% of auto ad spend, compared to 6.0% of ad spend across all categories globally.

Auto spending should pick up a bit next year, with growth of about 2%, per the report.