US Auto Industry Spending on Digital Marketing is on the Rise

Internet usage is increasing. Technology has enabled to access Internet on smartphones, tablets and other mobile phones. Most users are willing to search on Internet rather than searching in the newspapers and magazines. Auto manufacturers and dealerships are also switching to digital marketing. According to eMarketer report, the United States automotive industry in 2013 will spend $5.07 billion on digital advertising. By 2017, it is expected to reach $7.80 billion. Between 2012 and 2017 a compound annual growth rate (CAGR) is at 12.8%.

The United States auto industry growth of digital spending continues. It will become the second biggest spender in mobile media and online paid advertising by 2015. 60% paid digital dollars for efforts of direct response will invest by the auto industry marketers this year (2013). Remaining 40% will make up by brand focused campaigns. With the greatest growth in local, social, video and mobile areas, display and search still command the largest part of digital spending.

Aftermarket providers, local dealers and regional associations are increasing their spending on digital marketing and directing a larger portion to mobile media and local online. As a result, United States automotive digital ad spend at local level is likely to have more robust growth.

The most recent report “State of the Industry” from NADA (National Automobile Dealers Association) indicates that the digital ad spend by dealers has increased greatly over the past decade. It is up from just 5% of spending in 2002 to twenty 5% in 2011, and in 2012 it is twenty 7%. On television ads, automobile dealerships spent on 2002 is nearly 17% and it touches 20.1% in 2011, and a slight increase of 0.1% in 2012.

Advertising in newspapers has a different story. In 2002, nearly 47% spent on newspapers, by the year 2011 it decreased to 20%, and in 2012 fell to 17%. The radio advertisements are having a consistent record, as in the year 2002 it is 15.7% and by 2011 touched 15.9%, to the next year the budget is allotted by the auto dealerships. Direct mail advertising is from 7.4% in 2002 to 10% in 2011 and 1% raised to the next year.

As the United States auto industry marketers seek out customers researching about vehicle purchases on their smartphones and tablets, the investments are growing in mobile ads quickly. According to the JD Power and Associates report in October 2012, the percentage of in-market shoppers those who visited an auto website through their smartphone increased from 17% in 2010 to 31% in 2012.