Why CTV Advertising is a Must-Buy for Automotive Dealers in 2022
Author: Peter Jones, Head of Local Sales, Premion.
As vehicle demand continues to outpace inventory, car buying in 2022 will remain much the same as last year — with limited selection, elevated pricing, few incentives, and the need to act fast to make a purchase. While chip constraints are predicted to ease in the second half of 2022 and major automotive manufacturers have announced accelerated production plans this year, particularly in electric vehicles, car buyers won’t see much change in the near term.
The used car market continues to see spiraling demand and soaring prices as new car inventory shortage persists. According to Kelley Blue Book, the average price of used vehicles has risen 42% over the past two years and is now close to $30,000. Thus, auto dealers have had to adapt quickly to a frenzied car buying environment and many have pivoted to prioritize the sale of pre-owned vehicles and are continuing to invest more in digital capabilities, such as virtual car buying tools, at-home test drives, and home delivery of vehicles, to attract car buyers.
To stay top-of-mind with car buyers, savvy auto dealers are focused on agility and flexibility to align and shift ad spending amidst supply chain constraints and to ensure that their ad dollars are spent reaching high-value auto intenders to drive measurable outcomes. As such, CTV advertising is a must-buy for automotive marketers. No longer just for TV buyers looking to extend reach, performance marketers are also turning to streaming TV in the wake of recent consumer privacy changes.
Automotive marketers have been among early adopters of streaming TV advertising, which has quickly evolved as a priority customer acquisition and performance marketing channel. With the continuing growth in streaming TV viewers, auto marketers are shifting even more budgets to the medium to reach the highly engaged CTV audience.
- In 2022, 84% of U.S. households are projected to be CTV households and the average time spent per day streaming on a connected device will be about 50% compared to the average time spent watching television, according to eMarketer*.
- A November 2021 Cord Evolution study found that 79% of people planning to buy or lease a vehicle in the next 12 months watch ad-supported OTT. Of those auto intenders who view ad-supported OTT, 56% of them are looking to buy a new car, 72% are looking to buy a used car, and 21% of this audience is ready to lease a car. Additionally, 39% of all U.S. auto-intenders cannot be reached via traditional TV or cable.
- BIA forecasts total auto spending in local OTT will reach $302 million in 2022, rising 80% to $545 million by 2025 with tier 1, 2, and 3 auto making up nearly 90% of forecasted OTT spend in this category.
New data innovations in targeting and measurement makes streaming TV even more compelling for auto advertisers. Beyond the ability to reach audiences by location and interests, auto dealers can now find high-value audiences and connect viewership with sales through closed-loop attribution, due to our partnership with Polk Automotive Solutions by IHS Markit. For an automotive dealer in a midsize market, our campaign performance drove 33% sales lift — with 88% of sales influenced from within the first 30 days of campaign exposure. Furthermore, while this dealership ranked fourth in their DMA for total sales, they ranked number one in sales for households exposed to this campaign.
Automotive marketers need a trusted streaming TV advertising partner to reach auto intenders at the household-level, track conversion and reduce wasted impressions. Premion is a proven partner in driving measurable outcomes for many automotive brands. We run a multitude of campaigns for local, regional, and national dealers.
Download “A Marketers Guide: The New Rules Ahead for Streaming TV Advertising” for more insights on driving CTV advertising success.
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*eMarketer, Connected TV Households, September 2021; eMarketer, Average Time Spent per Day with TV, April 2021; eMarketer, Average Time Spent per Day with Other Connected Devices, April 2021. Copyright © 2021 Insider Intelligence Inc. All Rights Reserved