Media Buying Briefing: As the auto industry shifts its priorities, digital media buying slides into the driver’s seat

By Michael Bürgi

Headline after headline about the auto industry’s supply-chain woes (Not enough computer chips! Expensive raw materials! Used cars are more valuable than new cars!) have dominated the business pages for at least a year now. It turns out those impacts on the industry, combined with a more selective consumer who expects to get things on his or her terms, is having an impact on where auto manufacturers and dealers are spending their media dollars.

On top of it all, the auto industry has had to deal with Tesla, an independent car brand that hasn’t spent a penny on advertising but sold almost 450,000 fully-electric cars in 2020. Though Tesla has its own set of challenges, carmakers and their agencies are keeping a close and envious eye on how the upstart has marketed itself.

“Tesla changed the game. Their no-dealer model has really affected what consumers expect,” said Scott Schwartz, managing director, business lead at Omnicom’s PHD. “They don’t advertise. What they do well is they foster fandom — they’re creating experiences, moments and this fandom. And it pushes [the entire auto] industry to figure out how to tap into a little bit of that magic. It’s going be hard to recreate what they did, but we can look at their playbook a bit.” Among other accounts, PHD handles Volkswagen’s media.

That magic, it seems, is being sought more and more on digital channels, at the expense of some traditional media. “Manufacturers are working on building brands with long life cycles, which tends to require sustained [ad] spending, with more of a digital skew,” said Brian Wieser, global president of business intelligence at GroupM. With used cars in some cases generating more value than new cars, dealers are looking to reach prospective buyers online, which Wieser said can come at the expense of local broadcasters.

“In certain times and channels, the consumer wants to be inspired or educated or assured. We go beyond the channel mix to focus more on the consumer journey, and right now that journey is more digital, streaming, and influencer focused than ever before,” said Kimberley Gardiner, senior vp of marketing for Volkswagen of America. “Given the supply issues and all the production challenges in the auto space right now, channels that allow for maximum flexibility in regards to both flighting and creative certainly have an advantage.”

The shift toward digital in all its forms — search, CTV, website — seems indisputable to Gordon Borrell, founder and CEO of media analysts Borrell Associates. Borrell’s own research shows that in 2019, of the $8.4 billion local and regional auto dollars spent, 65 percent was spent on digital. In 2021, Borrell forecasts that, of the $7.1 billion expected to be spent by auto on local/regional, 73 percent will be on digital.

Yes, you read that right, local auto dollars are expected to drop over time, and all sources reached for this story pointed to the consolidation happening among auto dealers, the result of more car buyers choosing to …read more

Source:: Digiday