Auto Manufacturers are upending their advertising spend as Aussie Car Sales rally despite the pandemic
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Auto Manufacturers are upending their advertising spend as Aussie Car Sales rally despite the pandemic

Despite the barrage of negative news surrounding a declining ad spend as a result of COVID-19, there are some areas of spend growth shining through. And some of those areas fall outside the expected realms of FMCG staples and e-commerce.

The auto sector is one area that is bucking the general trends, and advertising is rising to engage consumers who are thinking more closely about personal transportation than mass transit options. According to Nielsen Ad Intel data, Australia’s advertising spending in the automotive industry registered an uplift between May and June 2020, based on automotive internet sites, SUV brands and dealer group activity. 

This increase in spend is critical for brands seeking to keep a growing number of potential auto shoppers engaged at the right time, as most of the states are emerging from lockdowns. In addition, we are all aware that COVID-19 has notably shifted consumer behaviour and increased media consumption (when lockdown restrictions were in place), which has prompted marketers to adjust their ad strategies. 

Expectedly, new car sales plunged while consumers were forced indoors during lockdown restrictions. But after falling 48.5% in April, the auto industry is recovering and at the end of June stand only 6.4 per cent down on the corresponding month a year ago. This result was driven primarily by consumers and businesses looking to take advantage of enticing end-of-financial-year deals and the federal government’s valuable instant asset write-off scheme. In fact, Australians purchased more than 110,000 new cars in June 2020, prompting actual worries about a possible inventory shortage in the coming months. 

This shows how important it is for brands to not go silent on consumers during crises, even when brands have hard budget decisions to make. Nielsen research shows that brands that go totally dark for the rest of 2020 could be facing revenue declines of up to 11% in 2021.

Taking a closer look into the profile of potential auto shoppers, latest Nielsen Consumer & Media View (CMV) data (based on February to April 2020 Survey) shows a positive trend in the demand for both new and used cars, especially among males in the 25-39 age band. 

During the same period, intention to buy a new car among people from 18-24 years old living in regional/rural areas doubled, and now sits at 8% when compared with the prior three month period (December to February). And when it comes to the metro area, consumers 25-39 years old have demonstrated the strongest increase in appetite to buy a new car, growing from 9% (December- February) to 12%. 

When we look at brands across those intending to purchase a new car in the next six months we can see Audi, BMW, JEEP and Toyota have increased for consideration. 

And when it comes to advertising spend Toyota Motor Corp., Hyundai and Mitsubishi are leading the top 10 automotive advertisers by spend ranking (January-June 2020).

Looking forward, auto advertisers need to ensure that their brand messages evolve to continue resonating with consumers.
COVID-19 has certainly reshaped the advertising industry. It’s pushed advertisers and marketers to rethink their strategies. The key is for manufacturers to ensure their brand awareness remains at the forefront of consumer consideration in the ‘new normal’.