The automotive industry is one of the main drivers of the advertising market, especially in the US. Overall US spend is estimated at $40bn for 2020, and of that amount, nearly $15bn is from auto advertising alone.
You might be wondering how and where that auto ad money is being spent. IHS Markit found that 48% of it was dedicated to drive-to-store (DTS) advertising in 2018 with that number only projected to increase. Think about that for a second, that means seven-billion-dollars was spent on DTS – or any form of advertising that has the direct intention of increasing customer traffic to physical retail stores.
However, percentage-wise, auto DTS spend is lower than other industries such as groceries, fashion, or restaurants. At 48% dedicated from auto, it is 7% lower than the industry average of 55% but the overall spend offsets the size of its share.
Drive-to-store is essential to the automotive industry. Despite the advent of online car buying, 95% of car purchases are still completed onsite at dealerships. That means the entire purpose of their advertising is to increase the number of people that are coming into their physical points of sale. Whether you are a luxury car brand or a small, local car dealer, you are looking to sell cars, even if the way you go about it is different.
Drive-to-store for brands and dealers
Here are two scenarios for a successful drive-to-store campaign that can be run by both of these groups:
Auto manufacturers: build brand awareness by creating authentic and engaging experiences that drive foot traffic to showrooms.
Car dealerships: drive foot traffic to showrooms to convert in-market car buyers and increase sales.
The concept seems easy enough; make an ad that makes people want to go out and buy a car from you. But with the number of advertisements that a consumer sees per day, it is difficult to stand out and make them want to take that physical action. The key is to create an experience that is not only engaging, but that makes it easy for the consumer to do what you’d like them to do. For instance, you might not want to deliver an ad at 9pm when your user is at home, relaxing for the night. That wouldn’t be the most effective opportunity to get them to take a trip to your dealership. Instead, once you’ve determined your audience, you could deliver them an ad when they are only a short distance from your dealership or showroom, and let them know that you are located just a short walk or drive away from their real-time location.
Mobile is key
And what is the device that’s always on-hand at all times, wherever they might be? You guessed it - mobile. For this reason, mobile has become the leading device for DTS advertising at 22% of total spend and continues to grow, expected to make up 28% by 2023, surpassing more traditional DTS channels like radio, TV, and OOH which are all set to decrease. US Marketers voiced that mobile performs very strongly when examining drive-to-store effectiveness, with 60% placing it as one of their top channels.
And with 40% of all new vehicles in the next 10 years being sold to millennials (Deloitte) it would make sense to pay special attention to their mobile planning as it is the device this demographic spends the most time per day with (eMarketer, 2019). Auto brands and dealerships should be combining the effectiveness of drive-to-store through mobile devices in order to see the best return on their ad spend.
The automotive industry has always been highly competitive, with all types of manufacturers and dealerships vying to capture consumers’ attention and dollars. In order to achieve this, the auto industry has exponentially focused spend on advertising channels, resulting in nearly billions a year. And while that market has become increasingly crowded, brands and dealers have rethought how they can be most effective with their ad dollars, which has resulted in a rise of drive-to-store advertising investments.
As the channel that is a clear champion of driving more visits to dealerships and showrooms, DTS will remain key for the industry. In order for these players to successfully take hold of this channel though, they need to ensure that they are working with a partner who specialises in it and has a clear track record of driving incremental visits and sales.
Ed Silhan, chief revenue officer, North America at S4M.