Digital media spend driving the automotive industry

The automotive sector led mobile ad spending in 2015 as more and more people start their path to purchasing a car from their mobile phone or tablet.

The latest Standard Media Index’ (SMI) report shows that automotive ad spend within the Australian market grew by 8% in the third quarter of 2015. Overall, Q3 auto expenditure remains stable at 13.2%, the same as Q3 2014.

Auto spending increased the most in the ‘digital’ sector, which saw an increase of 26% followed by ‘out of home’ ad spending which grew 3%, followed by ‘television’, which grew 2%. The gains were slightly offset by drops in spending in newspapers (-4%), radio (-10%) and magazines (-5%).

The outdoor and digital media were the only two major media to report quarter-on-quarter gains in each of the US, UK, Australian and NZ markets in the July to September period.

Country breakdown: national media trends in Q3, 2015:

Australia/New Zealand

  • Television -1.3%
  • Digital 21.3%
  • Out of home 12%
  • Radio 5.9%
  • Newspapers -20.9%
  • Magazines -18%

Total 2.4%

The SMI Index also shows that paid media spending by the automotive sector saw dealer ad spend surge from $92.7 million in 2014 to $107.4 million in 2015, for the January-May period, a rise of 15.8%.

Meanwhile, automotive brand media spend rose a more moderate 4.2% to $291.5 million in 2015 up from $279.7 million in 2014 according to SMI.

“We can now also clearly see the differing trends within the two distinct sectors of the automotive market,” says Jane Schulze, managing director of SMI.

For example, automotive brand ad spend on metropolitan TV was down in the first five months of the year (-1.9%), but spending by auto dealers/parts/commercial has grown 9.7%.

Media breakdowns show print continues to lose advertising spend with Jan-May spending down 10.1% in automotive brand, a fall of $1.5 million.

The move to spend big in the digital space is backed by the IAB Australia and Nielsen Mobile Ratings report which reveals that Australian smartphone owners 18+ spent, almost 35 hours engaging with digital content during the month of August 2015 – either via their smartphone’s web browser or via an installed application.

The report also found that time spent on a smartphone is now higher than any other digital device, accounting for 43% of total time. Desktop and tablet usage accounted for 39% and 18% respectively.

With this in mind it’s no surprise that the Australian online advertising market delivered record revenues for the full financial year ending June 30, 2015, growing by 19.8% or $870.2 million from financial year 2014 to reach $5.3 billion.

Additionally, research by Marin Software also shows that automotive brands have increased their spending on mobile ads by 10% in Q1 2015, compared to the same quarter in 2014. There was an 11% year-over-year increase in impressions and an 8.8% increase in clicks during the same quarter, according to the Marin Software study.

Marin says pre-purchase research is essential for the Australian automotive industry as 33% of auto buyers “start their path to conversion from a mobile ad.

“The increase in consumer engagement is indicative of a shift in car shopping consumer behaviour,” the report notes.

“Consumers increasingly use smartphones at dealerships to research and validate brand choices pre purchase, driving a surge in mobile auto app usage in 2015. As automotive brands recognise the importance of mobile in the product research and conversion lifecycle, we’ll see a spike in activity with brands continuing to invest in mobile ads,” according to the Marin report.

The new data is culled from global brands that manage more than US$7 billion in annualised ad spend through Marin’s platform.

The data-set represents all major industry sectors and 13 countries and regions, including Australia, New Zealand, the US, UK, Eurozone, Japan, and China.

In positive news for Australia and New Zealand, leading global marketing firm McKinsey and Co. notes that the Asia–Pacific media market will be the largest source of absolute ad spending growth for the global industry during the next five years.

Finally, PricewaterhouseCoopers projects that spending in the autonomous-car industry will balloon to US$43.2 billion (AUD$61.3 billion) globally by 2021.

The marketing upshot is that automakers will soon be charged with selling the tandem concepts of their assisted-driving features, and dashboards for infotainment.

This article was sourced from autotalk.com.au