Auto industry faces 21% decline in global adspend in 2020 due to pandemic | Advertising

Advertising spend by global automotive brands will fall by 21% in 2020 as a result of the COVID-19 pandemic, according to Zenith’s automotive advertising expenditure forecast, released Wednesday.

Zenith predicts the global ad market will decline by 9% overall this year.

“This year, the coronavirus had massive effects on consumer behavior,” said Jonathan Barnard, Zenith’s global head of forecasting. “The fact is, consumers have new demands and new concerns.”

The automotive industry traditionally unveils new models in October, making this time of year big for advertising. Some auto brands have put out new campaigns, such as Kia’s K5 launch during the 72nd Emmy Awards broadcast on Sunday that featured dramatic, stunt-driving spots by David & Goliath. 

U.S. auto brands still spend the majority of their media budgets on linear TV, lagging other categories in the tilt toward digital. Global auto brands directed 42% of their budgets to digital channels in 2019, compared to the average brand, which allocated 49% of its spend to digital. In the United States, automakers spend 47% of their budgets on television and 31% on digital, Zenith found.

Auto brands will not only need to figure out how to connect with their consumers on digital channels, but do so with a message that resonates with the current reality.

“Consumers that may not have bought cars before may be in the market for the first time because they’re worried about the safety of public transport,” Barnard said. “How do you effectively communicate with these consumers, so they are more likely to trust your brand?”

Zenith predicts a rebound in automotive ad spending in 2021 and 2022, growing 10.5% and 11.4%, respectively. It will be a long haul to full recovery, though, as automotive ad spend will still be 2.8% lower than it was in 2019, according to Zenith’s projections.

The next report from Zenith will analyze ad spending in the media and entertainment verticals, which are grappling with the impact of lost summer blockbuster campaigns while aggressively pivoting to streaming.

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