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Eye On: Auto Spend and COVID-19

Global data company, Eyeota, has found that after an initial dip in audience spending in Q1, auto marketers quickly ramped back up their targeting strategies, with May 2020 showing a 39% month-over-month uptick, primarily driven by the Americas region (up 75% month-over-month in May). 

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In addition, auto advertisers focused on direct response-oriented car ownership segments in April but returned to demographic targeting in May.

Below is a report from Eyeota that reveals trends in the auto marketing space amid COVID-19.

Eyeota Marketplace Auto Audience Expenditure from March to May 2020

Introduction

● Early/Peak COVID Affected Auto Sales and Buying Behavior

○ As the COVID pandemic began to unfold, auto sales dropped by as much as 50% year-over-year in the U.S. 1  Some of that decline can be explained by auto buying behavior shifting dramatically from in-person dealership visits to online methods, such as virtual car building (via a website or mobile app) and price comparison sites that included both new and pre-owned cars. 2

Source: [1] Car and Driver (2020); [2] CNBC (2020)

● Post/Ongoing COVID Renews Driving as a Mode of Long-Distance Transportation

○ As consumers shy away from air travel and, to a lesser extent, train and bus travel, many consumers are relying on cars to travel long distances. Recent U.S.-based research has shown that the majority of consumers (59%) believe driving during this COVID period presents an “extremely low risk.”

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Source: University of Illinois (2020)

Eyeota Marketplace Audience Buying Trends

● Auto advertisers buying audiences in Eyeota’s Audience Marketplace saw a dip in Q1 2020 but showed indications of increasing spending in Q2 .

○ Q1 2020 showed a year-over-year decline, and April 2020 showed a slight month-over-month decline.

○ However, May showed a 39% month-over-month uptick, primarily driven by the Americas region (up 75% month-over-month in May).

● In terms of audience targeting objectives, auto advertisers pulled back broad-reaching demographic targeting in April 2020, focusing more on direct response-oriented car ownership segments, but returned to demographic targeting in May.

○ In April, product ownership segments saw a 117% increase in share of auto advertiser spend month-over-month, while demographic segments saw a 12% drop in share of spend

○ In May, demographic share of auto advertiser spend returned, up 34% month-over-month from April

● Auto advertiser audience spending could continue to increase as consumers are still hesitant to travel via air, as well as other mass methods, such as cruises and trains.

○ U.S. TSA data shows that traveler count was down 95% and 90% year-over-year, respectively in April and May, and has only returned to 25% capacity in July so far.1

○ Additionally, international border restrictions will force holiday travel to local destinations.2

1 https://www.tsa.gov/coronavirus/passenger-throughput

2 https://www.cnbc.com/2020/05/06/coronavirus-pandemics-impact-on-travel-tourism-in-5-charts.html

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