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Auto Projected to Spend $11.3B on 2109 Local Advertising


BIA Advisory Services
BIA Advisory Services

In its latest vertical industry report, "Insights into Local Advertising -- Automotive Vertical," BIA Advisory Services estimates that automotive dealers, local dealer associations and manufacturers will spend about $11.3 billion on local advertising nationally in 2019. This ad spend represents 75% of the $15.1 billion auto vertical, which makes auto dealers the largest of the five sub-verticals that comprise the overall auto vertical. The remaining spend comes primarily from tire dealers, auto repair and parts shops, as well as other vehicle dealers.

As in past years, traditional media will receive the greatest share of the ad spend, followed by online ad spending. Auto dealers and manufacturers are projected to increase their use of digital channels significantly over the next four years, adding $324 million annually from 2019 to 2023.

"Businesses within the automotive vertical still rely heavily on traditional media, over-the-air television in particular, to get their message across to audiences," said BIA Advisory Services Senior VP and chief economist Dr. Mark Fratrik. "Our research shows that automotive is one of largest category spenders in TV advertising. Digital advertising is growing steadily and faster than before."

In 2015, BIA projected that despite traditional media's dominance in the current automotive marketing mix, digital advertising would represent around one-third of automotive local ad spending by 2019. The firm now forecasts that digital advertising will represent 40.8% of the ad spend this year and that digital media spending within the overall auto vertical will represent 49.3% of total local advertising in 2023. Pure online advertising, consisting primarily of vertical search, is the largest digital automotive channel.

"Dealers and their local associations are aligning their marketing strategies to target today's auto buyers that are using a mix of media like TV and radio along with digital-review sites, local dealer websites, search engines and social media to educate themselves during their buying journey. Ad sellers who understand and sell value and targeted cross-platform advertising will be very successful," added Fratrik.

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