SUVs & Small Cars Drive Growth in Automotive Ad Spend: SMI

SUVs & Small Cars Drive Growth in Automotive Ad Spend: SMI
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Australia’s SUV, micro/small cars and automotive parts/accessories categories reported the biggest increases in advertising expenditure in the second quarter of 2017, while the total automotive category grew its ad spend in the same period, according to new data from Standard Media Index (SMI).

Reflecting the popularity of SUVs, the category grew its ad spend by 86.1 per cent to $41.4 million in the second quarter of 2017, compared to the first quarter of 2016.

Auto accessories, parts and services was up 37.6 per cent to $17.19 million, while the micro/small car category jumped 17.4 per cent to $20.06 million in the same period.

The largest decreases in ad spend in the automotive category came from auto dealerships, which dropped 27.8 per cent to $21.9 million; medium/large cars, down 26.3 per cent to $9.7 million; and auto insurance, down 6.5 per cent to $32.2 million.

The auto brand/sponsorship category was the automotive sector’s largest in the second quarter of 2017, with an ad spend of $106.1 million – up 3 per cent on the previous corresponding period.

The entire automotive category increased by 6.1 per cent to in excess of $273 million.

Automotive category ad spend (SMI)

Jane Schulze, managing director of SMI for Australia and New Zealand, said: “The automotive category’s ad spend continues to trend higher than other product categories, according to our data, particularly in media channels such as television, digital and radio. and the auto category was the top investor in advertising in the second quarter, driven by auto brand and sponsorship advertising.

“The large increase in advertising investment by automotive brands could be the result of Holden and Toyota’s decision to end car manufacturing in Australia, which is seeing a lot of that spend being redirected into marketing.

“Interestingly, the growth in SUV ad spend is going to digital advertising, television and outdoor, while auto insurance spend has declined in all digital channels except video and social sites.”

Internationally, Australia’s automotive category reached 11 per cent of total ad spend in the second quarter of 2017, compared to 14 per cent in the UK and 9 per cent in the US, SMI data shows.

For Australia and the US, television is number one media channel for advertising expenditure, but in the UK, digital channels dominate.

In the 2017 full financial year, automotive brand advertisers increased their advertising expenditure by 7.1 per cent to $756.4 million.

Australia’s ad market has delivered its fifth consecutive year of record financial year ad spend in 2016-17 to reach in excess of $7.14 billion.

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