Automotive Advertising Shifting from Linear to OTT


Auto dealers are one of the most vital advertising segments, with a traditionally massive spend on linear TV advertising. However, the latest figures show an enormous shift from traditional platforms with no targeting or interactive capabilities to the new way of advertising – OTT.

The significant shift in spending isn’t limited to OTT advertising and includes all digital marketing spending. This is in line with global trends across market segments, but the change in spending seems particularly relevant to the automotive industry currently.

Report Suggests Automotive Ad Spending is Going Over The Top

According to a recent report from Borrell Associates, the shift began in 2020 and looks set to continue throughout 2022 and beyond.

  • TV spending by auto dealers fell by 26% in 2020, 11.2% in 2021 and another 6% drop to $568.3 million is expected in 2022.
  • Auto dealer spending on cable dropped 15% in 2020 and 3.1% in 2021.
  • Dealers spent $1 billion on streaming for the first time in 2019.
  • Despite the pandemic’s severe impact on the auto industry, dealers increased spending on streaming and OTT by 6.4% in 2020.
  • OTT spending increased 35.7% in 2021, and a 20.1% increase in 2022 to $1.75 billion is forecast.
  • Overall, the report predicts auto dealer ad spending to increase 8.8% to $9.47 billion in 2022.

Why OTT Advertising is Better Suited For Car Buyers

While OTT ads are more targeted, interactive, and have a much better ROI for any brand or market segment, the automotive segment can benefit particularly well from this shift.

Targeting Car Buyers Effectively

A one-size-fits-all approach to motor vehicle advertising doesn’t work. Instead, car dealers must understand that to be successful; they have to approach buyers in different ways at the various stages of their journey. There are several reasons that this is particularly true of the automotive market.

  • Cars are enormous purchases (usually the second or third most expensive purchase anyone will make), and some buyers tend to be skittish and quickly put off when researching vehicle options. Targeted messaging at the proper stages is the only option to ease them into the buying process and successfully drive them to purchase.
  • Brand recognition and preference are colossal factors, so brands need to target this aspect in the awareness stage of the purchase.
  • Inventory-based marketing strategies are the best way for automotive brands to move the right stock at the correct times and maximize their overall marketing efficiency. This is not possible with linear advertising and requires OTT ads’ targeted and interactive options.
  • Some buyers who require new vehicles in a hurry should be exposed to advertising that delivers specific model options that appeal to them as soon as possible in the buying stage.
  • Buyers loyal to specific brands who want to upgrade their current vehicle should be exposed to OTT advertising that previews the next upgrade of their current model.

The list can go on and on, but the bottom line is this – OTT advertising can fit perfectly into a digital strategy and appeal directly to the marketing personas created by auto dealers and car brands.

Car Buyers Are Online

According to Think With Google, 92% of car buyers research online before they buy – And they are investigating with video more than ever before.

64% of people who watch online videos to inform their purchase say that new formats like 360° video would convince them to buy a car without a test drive.

So not only is the market virtually all online, there’s a growing trend for virtual test drives and an already massive market for consuming video-based car reviews. As a result, the interactive advertising potential for OTT auto ads is limitless and highly lucrative.

Cross-Channel Automotive Marketing is a Must

Cross-channel marketing creates a unified customer experience across all channels. The customer journey is designed and integrated into each marketing channel, providing a targeted message at each stage.

Automotive brands and car dealers must realize that to engage and attract customers; they need to have a cross-channel marketing approach that harnesses the significant power of OTT advertising as a part of the marketing strategy.

In closing, the automotive advertising shift from linear to OTT might not be surprising, but it is something that dealers and brands need to be aware of.

As more and more brands and dealers shift and develop highly effective integrated marketing campaigns with OTT advertising, it will become harder and harder for those who aren’t climbing on board to compete effectively.

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