TV GETS MOST, ONLINE IS GROWING
A new report from BIA/Kelsey projects that automotive organizations will spend more than $15.13 billion on local advertising in 2015, representing 11.1% of the $137.9 billion total local advertising market.
“The auto industry and television came of age together as keystones of twentieth-century American culture,” said Mark Fratrik, SVP and chief economist BIA/Kelsey. “The two industries remain closely tied, with the auto industry being dependent on over-the-air television advertising, and all auto vertical subcategories relying heavily on traditional media to get their message to their audience.”
Auto dealers and manufacturers are projected to spend $11.3 billion on local advertising this year. There are approximately 17,600 new vehicle dealers in the country and BIA/Kelsey projects that the average auto dealer will spend more than $640,000 on local advertising this year. Other types of dealers—including motorcycles, RVs and such—will spend $50,000 to $100,000 per dealership for a total of $1.0 billion.
Other auto-related businesses—such as auto parts stores, tire dealers and gas stations—will spend a lot less on average, from $15,000 to $40,000 each on average, but still contribute to the $15.13 billion total.
Of that $15.13 billion. 77% is expected to be allocated to traditional media. BIA/Kelsey estimates 33.9% of local automotive advertising budgets is spent on over-the-air television, and another 1.7% on TV online advertising. In addition to the heavy use of television, newspaper (14.7%), online (12%) and over-the-air radio (11.6%) account for meaningful traditional market shares in automotive local ad spending.
“Despite traditional media’s dominance in the current automotive marketing mix, digital advertising is on the rise, and will represent nearly one-third of automotive local ad spending by 2019,” says Fratrik. Pure online advertising, consisting primarily of search, is the largest digital automotive channel. BIA/Kelsey’s report, Insights into Local Advertising— Automotive Vertical, projects that going forward all growth in local advertising for the automotive vertical category will occur on online/digital media, reaching 30% of total local advertising by 2019, up from 12% in 2015.