According to the latest forecasts published by Zenith, global advertising spending in the moto category will decrease by 21.0% in 2020 across 10 key markets*. That is a decline two and a half times faster compared to the entire advertising market in those countries.

  • Spending in the automotive advertising category will decline by 21% globally in 2020, with a 9% decline in the entire global advertising market
  • In most world markets in 2021, we will observe a recovery whose scale will be greatest in the countries most affected by earlier declines
  • Car brands spend more on television than average: it is still perceived as key to building broad-scale awareness
  • Digital advertising is the only channel that, according to global forecasts, will grow in the moto category in 2019-2022

The epidemic accelerated the declines

The spread of the coronavirus epidemic and its impact on the global economy have made consumers uncertain about their financial future and reluctant to make larger purchases. Car manufacturers also suffered from disruptions in their supply chains, because as a result of lockdowns, production plants were closed in many countries, additionally at different, often non-overlapping times, thus contributing to the desynchronization of production. When the crisis became real, faced with pressure on both supply and demand, car brands sharply reduced their advertising budgets. In April and May 2020, there was the largest decline in advertising expenditure in the moto industry in most markets, compared to the same period of the previous year. The following months brought a softening of these declines, which - according to the forecast by media agency Zenith - will also gradually diminish over the rest of 2020.

According to the forecast by media agency Zenith, global advertising spending in the automotive industry will be characterized by growth in 2021 and 2022, with results of +10.5% and +11.4%, respectively. Delayed car purchase decisions related to the persistent reluctance to use public transport will lead to the first increase in passenger car sales since 2017, driving sustained growth in automotive advertising in 2022.

Global automotive advertising spending will remain below 2019 levels in 2022

Despite the pace of economic recovery in 2021 and 2022, Zenith forecasts that advertising spending in the moto category in 2022 will be 2.8% lower than in 2019. The recovery in this industry will also be smaller than for the entire market, whose value is expected to be only 0.6% lower in 2022 than in 2019.

Car brands lag behind in the digital channel

The digital category is the most important advertising channel for car brands, yet only 42% of budgets in this industry are used in digital, compared to 49% spent on average by brands in this channel. Automotive brands are also less visible in magazines and out-of-home.

A slight rebound in perspective

Television is the second-largest channel for advertisers in the automotive category, who spend significantly more of their advertising budget on television (32%) than the average brand (27%). Television is still a key platform for broad-reach brand building, although premium digital channels are beginning to take over this role for some target groups. Moto advertisers also spend more on cinema advertising, which is good for building brand awareness among young, relatively well-off audiences, as well as on radio, which is a particularly important medium given that most listening takes place in the car.

Car brands globally spend significantly more on press advertising (11%) than the average brand (7%). This is mainly due to two markets - Germany and India - where newspapers still have broad reach among well-educated, affluent readers. Car brands use their ability to convey more detailed information, such as brand values, specifications and accessories.

However, digital advertising is the only channel that will grow

Digital as the driving force

Media agency Zenith predicts that digital will be the only channel where car brands will spend more in 2022 than in 2019. Advertisers will focus especially on premium video in digital format to compensate for the decline in prime-time television viewership and to better use customer data for more effective ad targeting in digital. Even before the pandemic, digital channels were becoming increasingly important in the consumer purchasing path, and the pandemic only intensified this trend. Zenith expects this tendency to continue over the next few years. It also predicts that automotive brands will globally spend 9% more on digital advertising in 2022 than in 2019.

Automotive advertising spending in times of crisis

Newspapers and magazines have been losing advertising market share for years as their readers moved online. Zenith assumes that by 2022 they will recover almost none of the advertising revenue lost in 2020. Newspaper advertising spending in 2022 will be 27% lower than in 2019, while magazine advertising spending will fall by 28%. By comparison, OOH and cinema advertising in the moto industry are expected to recover after gigantic losses in 2020 caused by social distancing restrictions. Nevertheless, Zenith predicts that in 2019-2022 global out-of-home advertising spending in the automotive industry will fall by 10% net, while cinema advertising spending will decrease by 16%.

Who is the digital leader?

Television and radio will remain important for automotive advertising, and in 2019-2022 the relatively limited decline will be 6% and 7% respectively worldwide.

Australia and Canada are pioneers in digital dominance in the moto category

Australia and Canada are the most advanced markets for automotive digital advertising, each allocating more than 70% of total budgets to digital channels. Even here there is potential for greater growth - the share of digital advertising spending is forecast to rise in Australia from 75% in 2019 to 79% in 2022, and in Canada from 72% to 75%.

In other markets, the growth potential is even greater, especially where the weakest results are recorded. Zenith predicts an increase in the share of automotive advertising in the digital market in India from 15% in 2019 to 23% in 2022, in Switzerland from 27% to 33%, and in the United States from 31% to 38%.

"The recession caused by the coronavirus turned out to be particularly difficult for car brands, which is why it was so important for them to adapt to changing consumer behaviors and needs," said Jonathan Barnard, head of forecasting at Zenith. "Brands that got closer to their customers online by investing in first-party data and personalized communication will have a good opportunity to benefit from rebounding demand during the economic recovery."

 

*The markets covered by this study are: Australia, Canada, Germany, India, Italy, Russia, Spain, Switzerland, the United Kingdom and the USA, which together account for 57% of all global advertising spending.

Summary

Global automotive advertising spending will fall by 21% in 2020, or two and a half times faster than the entire advertising market. However, media agency Zenith forecasts a recovery: in 2021 and 2022 growth is expected to be +10.5% and +11.4% respectively, although spending will still not return to pre-pandemic levels.

Digital remains the key trend – the only channel with growth in 2019–2022. However, moto brands still spend only 42% of their budgets on it, compared with the market average of 49%, and the leaders are Australia and Canada with shares above 70%. Experts see the greatest growth potential in India and the USA.