Auto Ad Spend Declines Set to Continue

April 20, 2023

This article is included in these additional categories:

Advertising Trends | Automotive | Digital | Industries | Social Media | Spending & Spenders

Automotive brand advertising looks like it will continue its pattern of descent, according to a recent forecast from WARC Media. The firm projects that the auto advertising market will shrink by one-eighth, dropping by 12.4% year-over-year. That would mark the 7th decline in spending in a 10-year period.

If this year’s prediction comes to pass, it would be the second-largest relative drop in ad spend in the past decade, behind only the pandemic-induced reduction of 19.2% in 2020. In fact, the only time that Auto ad spend has grown since 2016 was in 2021, when it rebounded from 2020’s pandemic-driven decline with a 23.5% increase.

The $37.2 billion that WARC forecasts in global Auto ad spend this year would be about 27% less than the $50.9 billion registered in 2016, before Auto ad spend began its downward spiral.

Previously, WARC data indicated that Auto ad spend had almost halved from 9.3% of total US ad spend in 2017 to just 5.1% share in 2022. Separately, eMarketer forecast that the Auto industry would be the slowest-growing in terms of digital ad spend in the US this year, and an IAB survey of buy-side advertising decision-makers revealed that Auto (-7%) was the only category identified in which ad spend was expected to decrease this year.

WARC actually has a more optimistic forecast for the US this year, however. It predicts that Auto ad spend in the US will grow by 7.7% after declining by 3.8% in 2022. In fact, WARC data indicates that a majority (56%) of all Auto ad expenditures will be spent in the US.

In other highlights from WARC’s forecast:

  • Auto brands’ share of global ad spend has fallen from 10.1% in 2013 to a projected 4.1% share this year.
  • Auto ad spend in publishing media has plummeted from $8 billion in 2016 to less than $2 billion in 2022.
  • Auto ad spend on digital channels has grown, particularly for social media (+57.5% in 2021) and search (+51.7%).
  • Instagram is predicted to garner the largest share of social ad spend from automotive brands this year, at 30.3%.

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