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The US auto industry is in the midst of a tremendous run-up in digital ad spending, piggybacking on cross-industry shifts in marketing budgets and historically strong domestic sales volumes. Automakers and dealers will spend $6.15 billion on US digital advertising in 2014, up 18.8% from the previous year. All told, substantial annual digital ad spending increases by the US automotive industry will continue for the foreseeable future, according to a new eMarketer report, “The US Automotive Industry 2014: Digital Ad Spending Forecast and Trends,” part of our new report series, “2014 Digital Ad Spending Benchmarks by Industry.”

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eMarketer also expects growth in the sector’s share of total US digital spending through 2018. By the end of the forecast period, automotive will rank as the second-largest industry segment in the US for digital ad spending after retail, keeping it near the forefront of digital marketing for at least the next several years.

More than one-third (35%) of US automotive-related digital ad spending will be on mobile this year, eMarketer predicts, accounting for $2.15 billion of the $6.15 billion total. This will put the auto industry in line with the US industry average when it comes to mobile’s share of digital ad spending. Investment should continue to shift into mobile advertising, accounting for a larger percentage of total spending each year, although the pace of this shift is likely to be tied to advances in attribution and targeting on mobile devices.

Even without those advances, mobile-based branding and upper-funnel advertising efforts are increasing in response to evolving consumer research behavior—which has shifted to mobile.

For the past two years, eMarketer’s US automotive industry digital ad spending data has shown budgets split 60% on direct-response tactics and 40% on branding—in line with the cross-industry average. Put simply, digital marketing strategies have solidified mainly around tactics that entice new-vehicle buyers to take action while they are in-market.

It’s a delicate balance given the long buying cycle associated with new vehicles. Brands must remain well considered and top of mind among consumers who are not yet in-market in order to win a place on their shopping lists once they are. Original equipment manufacturers with a slate of new product launches also gravitate toward branding campaigns as they attempt to drive awareness with native advertising or social media pushes.

Clearly, however, the baseline automotive industry digital strategy is weighted toward investing even more to win sales in the final weeks of a consumer’s shopping process using tactics like search and programmatically purchased, targeted ads. A major reason is the measurability of return on investment for direct-response tactics, which provides an easy case at budget time for further funding.

The effectiveness of such tactics has helped redefine how auto marketers approach branding campaigns. These too are becoming more targetable to specific consumers, blurring the line between branding and direct response.

2014 DIGITAL AD SPENDING

BENCHMARKS BY INDUSTRY

  • Retail
  • Financial Services
  • Automotive
  • Telecom
  • CPG
  • Travel
  • Consumer Electronics
  • Media & Entertainment
  • Healthcare & Pharma

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- See more at: http://www.emarketer.com/Article/Digital-Ad-Spending-US-Auto-Industry-Racing-Ahead/1010872/1#sthash.YHopfFtm.dpuf

Source: http://www.emarketer.com/Article/Digital-Ad-Spending-US-Auto-Industry-Racing-Ahead/1010872/1

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