Despite Huge Inventory Problems, Auto Advertising is Surprisingly Steady

AutoForecast Solutions says that more than 25 auto brands each lost more than 10000 units of North American production because of parts shortages through May 2021 And it39s not getting better anytime soon Lewis Black a partner at Almonty Partners which mines tungsten critical to the making of chips says he39s now pushed back his expectation for the end of the crisis to late 2023The paradox is that demand for new cars is at levels reminiscent of the postWorld War II consumer boom but those hungry buyers are having to scramble to find their vehicles Automakers are usually in the position of trying to activate that purchase gene maximizing the sale of cars and trucks they39re turning out as fast as they can But what happens to advertising and marketing when the few vehicles that do make it to dealer lots fly out the door unaidedThere is pain along with the rest of the automotive supply chain but predictions remain surprisingly bullish especially for local advertising Borrell Associates39 2022 Local Automotive Advertising Outlook says that local dealers spent 87 billion in 2021 up 15 percent from 2020 And for 2022 the report predicts an 88 percent increase in ad spending using the money to quotrebrand themselves educate consumers on what their stores have to offer and drive buyers to their websites to interactquotMeanwhile national TV buys are showing signs of life with 5039 million spent in February 2022 up 154 percent from the same month in 2021 But more recent surveys show a small but significant dip about 14 percent in national auto TV advertisingFor the week of May 2 Cadillac had the most eyeballs among automakers for its electric Lyriq spot quotFortune Favors the Fearlessquot according to iSpottv Sports events drew a lot of the viewers in broadcast and cable The Lyric is pictured at top With an ad spend of 225 million Cadillac got a lot of bang for its buck 260 million impressionsAuto advertising and marketing continues propelled in part by the carmakers39 need to introduce all the new and unfamiliar electric models they39re churning out The recent New York International Auto Show was almost exclusively about cars with plugs including the muchanticipated Ford F150 Lightning A confounding complication is that EVs use approximately twice as many chips as regular gas cars so the crisis may affect electric availability the mostOne factor keeping the media spending going in the face of such disruption is brand loyalty and retention Automakers fear that if they disappear from popular media and their cars aren39t on the lots hitherto loyal customers will defect and not come back when the crisis eases Joe Kyriakoza Vice President and General Manager of Polk Automotive Solutions by IHS Markit said in an interview that consumers have a fairly consistent 50 percent loyalty to their current car brand but that39s starting to deteriorate as buyers shop around for available vehiclesKyriakoza said customers today often have loyalty to auto segments like pickup trucks rather than to brands quotIt39s not plausible that pickup customers would say buy a crossover from their current brand because a pickup wasn39t availablequot he explained quotInstead they39re going to shop other brands It39s easier for the automakers if they have a family of brands someone who couldn39t find a Chevy crossover could buy a Buick insteadquotThe automakers Kyriakoza added quotneed to continue to have a voice they can39t go silent and darkquot He said that brand loyalty is down two percent year over year quotIt doesn39t seem like a lot but it could mean that a customer would fall in love with another brand and not come back There are more consumers who are nomads in the marketplace nowquotCox Media puts it this way quotIn the face of these supply chain disruptions auto advertisers and marketers are still tasked with engaging potential buyers and driving conversions In fact the hardships affecting supply chains and production make it all the more important that auto ad campaigns are creating revenue opportunities as brands focus on weathering this stormquot Cox notes that about a third of consumers said in 2021 that the chip shortage had led them to consider brands other than their current car That39s ominous for automakersThe fear factor continues to propel lots of ad spending According to Auto Success the crisis is also accelerating a push to digital quotMany retailers are relying on their digital advertising partners to instill more 39justintime39 promotions and advertising practices known as Ad Refreshers across their web and digital properties such as dealership websites thirdparty websites Google and Bing display advertising social marketing and even ads on YouTube and streaming video content such as HuluquotAd Refreshers can be nimble partners allowing dealers to align their online offerings with available inventory PureCars data shows that retailers39 digital display ads saw a 152 percent increase last March compared to March of 2021 Videobased ads saw a 70 percent increase from a year agoOne reason for this is that consumers are going online trying to find available cars which complements the online shopping that has already largely supplanted that initial visit to the dealership floor Oddly they39re still fixated on trucks and SUVs despite the high gas prices Consumer behavior can be difficult to predict and that39s going to keep the auto ad and marketing business on the volatile side for the foreseeable futureClick the social buttons to share this content with your friends and colleaguesThe opinions and points of view expressed in this content are exclusively the views of the author andor subjects and do not necessarily represent the views of MediaVillagecomMyersBizNet Inc management or associated writers

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Despite Huge Inventory Problems, Auto Advertising is Surprisingly Steady

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