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Auto industry increases digital spend

News, 21 May 2015
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NEW YORK: The automotive industry in the US is set to spend $7.3bn on digital advertising this year, with the greater part of that allocated to direct response according to a new report.

Insights provider eMarketer said that only the retail sector would spend more on digital during the course of 2015, as it forecast auto industry spending would increase 17.3% this year.

Overall, retail will account for 22% of total digital spending of $58.61bn in 2015, compared to 12.5% for auto which has edged ahead of financial services on 12.3%.

For its report series "Digital Ad Spending Benchmarks by Industry" eMarketer analysed hundreds of data sources as well as carrying out in-depth interviews with executives at agencies and brands.

Projecting out to 2019, eMarketer expected that spending by the auto sector would increase faster than average – it posits a compound annual growth rate of 14.2% between 2014 and 2019 – and that its share of digital advertising would increase to 13.2%, when its value would amount to $12.08bn.

Currently 60% of that spending is on direct-response efforts rather than branding, roughly level with sectors such as retail (65%) and financial services (62%). But these three lag behind travel where 72% of digital spending is devoted to direct response.

"The next frontier is convincing marketers that digital is suitable for branding," said Richard Flynn, vice president, category sales director, autos, at AOL.

Digital ad expenditure continues to grow across all industries, but "it is not one-size-fits-all", noted Victoria Petrock, principal analyst at eMarketer.

"Nuances among sectors reflect a variety of trends in the ways each industry approaches its market, targets consumers and closes sales," she said.

"For 2015, mobile, digital video and programmatic buying are the brightest stars in the digital advertising lineup," she added.

Warc's latest International Ad Forecast expects US digital adspend of $56.3bn this year, a 13.6% rise from 2014.

Data sourced from eMarketer; additional content by Warc staff

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