Online videos of car dealerships and their inventories will be among the hottest marketing tools in auto retailing over the next five years, according to a new U.S. forecast of auto advertising trends.
More money also will flow into targeted online display advertising, according to a multiyear outlook from research firm Borrell Associates Inc. in Williamsburg, Va.
Targeted online display ads might include a dealership's banner ad that appears on an individual's Facebook page based on his age, demographics or shopping habits.
"What you're seeing is auto companies and dealerships becoming much more sophisticated in their ability to target consumers," says Kip Cassino, Borrell executive vice president. "That's a key trend for the next five years. Dealer floor traffic is falling because fewer consumers are out looking for information at the dealership. Those who intend to buy are more focused on what they want."
Targeted online display advertising accounted for $1.19 billion in U.S. new-car dealership ad spending last year -- double from the year before. Borrell forecasts that the medium will soar to $9.11 billion in dealer ad dollars in 2018.
Online videos will account for $9.12 billion in dealer ad dollars in 2018 -- up from $1.14 billion last year, and $690 million the year before, according to the forecast. The projections are based on data and interviews collected from more than 2,000 dealerships, ad agencies, media buyers and others.
Borrell forecasts that another fast-rising auto retail marketing tool of recent years -- paid Internet search -- is headed for a sharp downturn.
Paid search, in which a dealer pays for a preferred position in Internet searches, will decline in ad spending from an estimated $1.71 billion this year to $682 million in 2018, according to the forecast.
Cassino says that dealerships are rapidly becoming more expert at doing their search engine optimization -- achieving the same results without spending ad dollars.