Making The Most of Advertising Dollars in a Rapidly Changing Digital Landscape

Now that we are firmly planted in 2018, let’s look at the current and coming advertising trends of the year that affect the automotive industry.

As they have been for the last few years, auto dealers are shifting their ad dollars to digital spending.  Rather than diversifying their marketing budget across multiple traditional channels, dealers are settling on whichever one still has the best value and reach in their marketplace.  For some dealers it’s television, for others its radio. This is allowing dealers to keep their brand in front of the masses while still managing their budget in a responsible and effective way.

Digital marketing has become widely accepted as the best way to reach targeted audiences in a cost-effective manner. We are seeing more and more of auto dealers’ total budget going into search engine marketing campaigns and Facebook Ads. Search engine marketing offers very low funnel prospects who have direct intent to buy and very little ad dollar waste. Facebook Ads offer a vast variety of targeting options, which makes it an incredibly powerful platform for auto dealers to advertise to in-market buyers. These two platforms combined are becoming the cornerstone of every successful auto dealers’ paid advertising strategy.

The ability to reach large audiences with a single media buy is what made traditional media so powerful in the past. One television or radio buy could reach hundreds of thousands or millions of people at a time. The media landscape is changing. While traditional media companies are consolidating, their audience is also becoming extraordinarily fragmented. Mediums like digital video streaming services, digital audio streaming services, podcasts, and even social networks are eating into the traditional media audiences, making it harder to reach people at scale.

The digital media landscape is moving in the opposite direction. As of Sept. 2017 Google owns 42.2 percent of the share in dollars of the U.S. digital ad market. Facebook owns 20.9 percent of the share in dollars of the U.S. digital ad market. Combined, that’s 63.1 percent of the share of ad dollars spent consolidated into the hands of two companies. While the overall ad spend on digital media is consolidating into the hands of only a few companies, the platforms offer the ability to reach the vast majority of online audiences.

Google’s network alone reaches over 90 percent of Internet users globally and Facebook’s Network reaches over 70 percent of Internet users in North America. This type of reach is why auto dealers have found success and will continue to do well when allocating their budgets to these mediums.

Going forward, we expect to see more of the same. We are keeping our eyes on Amazon as they are expected to release some type of ad platform. It’s unknown yet what capabilities this ad platform will offer and whether it will cater to a local market, or only to a national market. If there’s money to be made, Amazon will be there to compete for those dollars. How this and a further move towards digital advertising will affect the auto industry is yet to be seen, but we will be keeping an eye on it.

eMarketer: Google and Facebook Tighten Grip on US Digital Ad Market

 

Henry Kwartler has been an advertising professional since 1985. Henry has worked with all types of media over the last 30+ years and has an affection for any type of advertising medium that get results for their clients. Henry opened KEA Advertising, Inc in 1995 and shifted the agency to digital marketing in 2004. KEA Advertising handles a diverse list of clientele with a high degree of speciality in the automotive category.