Digital ad spending in the US auto industry has steadily increased over the past few years, and this increase in spend is expected to continue.
According to eMarketer, the US auto industry is expected to see a 16.3% increase in digital ad spending in 2016, increasing from $7.30 billion in 2015 to $8.49 billion in 2016. This means the automotive industry now ranks second in the United States in terms of digital ad spending, behind only the retail industry (US Auto Industry Ahead of the Pack). Much of this increase in digital spend is happening at the local level, coming right from dealerships rather than the OEM.
A Changing Landscape
As automotive dealer networks and owners increase their interest and spend in the digital space, the need to effectively measure the true ROI of digital marketing campaigns has significantly increased. The days of simply using intermediate metrics, such as leads and digital shopping actions, to measure the effectiveness of a campaign are coming to an end. Dealers want their digital marketing efforts to move metal on their lot. They are looking to their agencies and partners to prove that with solid analytics that connect the actions users are taking online to the actions they are taking offline, such as the actual purchase of a vehicle. This need has caused analysts, strategists and other digital marketers to look for ways to make that connection.
Some of the Key Players
Several companies, such as Epsilon, Nielsen, comScore and BlueKai have introduced products to help with this need in various different industries. However, none have seen the level of success in the auto industry that Oracle Data Cloud (formerly Datalogix) has seen. With an exclusive partnership with Polk and its vast data-set of vehicle owners, Oracle Data Cloud is able to help OEMs, agencies, and publishers in the auto industry directly tie delivered impressions in the digital space to vehicle sales on car lots. This is allowing digital marketers and data analysts to measure success based on actual sales lifts, as well as other metrics such as cost per vehicle sold. OEMs and dealers have never been closer to measuring true ROI in the digital space than they are now. This shift in measuring digital ad effectiveness is changing the way data analysts in the auto industry report campaign success, and is drastically changing the conversations that marketing service providers are having with their clients.
Not a Perfect Science… Yet
This measurement process is still relatively new, in the grand scheme of things. Therefore, there are still improvements that need to be made. Many times, the sales lift of the exposed group (those in-market digital shoppers that actually viewed an advertisers’ online ad) is measured against a control group of users who were not exposed to ad units, and may not even be a true in-market online auto shopper. So, one could see how the sales lift percentages would be much higher for the exposed group, as you are measuring a true in-market shopper against an internet user who may or may not be in-market for a car or truck. The true value to your auto clients comes when you can show them that the campaigns that you delivered on, caused a larger sales lift than the campaigns delivered by other vendors they are working with, or have worked with in the past. Obviously, this is not always easy to get to, since most marketing service companies don’t readily share their analytics with the industry or competitors. Therefore, industry benchmarks must be adopted and used to determine the true success of a campaign (i.e., what is a good sales lift percentage?). These benchmarks are still being developed and tweaked. It will be interesting and exciting to see how this trend evolves moving forward in 2016 and beyond. In automotive, just like every other industry, the need to connect online actions with offline actions will only continue to increase.
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Data Source: www.emarketer.com/US-Auto-Industry-Ahead-of-Pack-Digital-Ad-Spend