In battleground states, online shopping falls as dealers forgo higher digital ad costs

Vehicle online shopping traffic has dropped in the months leading up to the November presidential election in battleground states as dealers forgo higher digital advertising and paid search costs, Dealer.com said.

Dealer.com, a Cox Automotive website manager for franchised car dealerships, reported year-over-year online shopping behavior down 9 percent in September and 4 percent in October in battleground states. Dealer.com tracked vehicle detail pageviews on its dealership websites in those states.

Since January, the average number of dealership website visitors was 6 percent lower in battleground states than in non-battleground states, Dealer.com said.

The study attributed the drop in shopping behavior and activity to a rise in digital advertising and search costs.

Year-over-year digital advertising costs have increased 11 percent in battleground states since the beginning of the year, compared to 7 percent in non-battleground states. The average paid search cost in battleground states was 7 percent higher than in non-battleground states for the same period. Paid search costs are sponsored listings or links in search engines, which companies usually pay for with each click, according to econsultancy.com.  

“There is a higher demand for advertising in an election year, in particular, the states that can go both red and blue,” said James Grace, director of analytics product management at Dealer.com. “Dealers that cannot account for additional advertising spends suffer, which can lead to a decline in online traffic, and ultimately a hit to their bottom lines.”

Some analysts believe the highly politicized and charged presidential campaign between Republican Donald Trump and Democrat Hillary Clinton has distracted consumers and dampened U.S. sales of new vehicles, which have dropped 0.3 percent through October after setting a record in 2015.  

The Dealer.com study said dealerships will have to power through the remaining days of the election cycle and look ahead to the holiday shopping season.

Dealer.com said the battleground states, in which Democrats and Republicans have a roughly even amount of support, that it studied were Colorado, Florida, Iowa, Michigan, Nevada, New Hampshire, North Carolina, Ohio, Pennsylvania, Virginia and Wisconsin.

Some analysts say Arizona has emerged as a battleground state during this election while Virgina has become less so.