How Consumer Behavior Toward Auto Ads Changed During Covid-19

More than seven months into the pandemic, ad spending is still all over the board. Digital advertising is seeing growth, broadly speaking, but traditional media is suffering as brands pull back on television and newspaper advertising. The Interactive Advertising Bureau projects an 8% overall decline on ad spend by year’s end. While that sheds light on the budget restraints that brands are facing, it tells us very little about how specific industries are faring.

As one of the largest spenders on digital advertising in the U.S., the automotive industry is a bellwether. Prior to the pandemic, the automotive industry had consistent double-digit growth in digital ad spending. That growth was forecast to continue through the end of 2020 — then, in March, everything changed.

Automotive dealers know that consumers go online to do their car research and were doing so even before the pandemic. Rather than visiting multiple dealerships, shoppers are using websites and social media to compare makes, models, and prices. Automotive advertisers have capitalized on the trend by doubling down on their investment in social media advertising and related digital channels.

Although automotive ad spending has remained resilient during the coronavirus pandemic, with some brands actually upping their budgets to take advantage of less competition and lower CPMs, new research shows that consumer behavior toward automotive ads has actually changed quite a bit.

When dealerships temporarily closed down during the height of the pandemic, their service departments largely carried on as essential services. After the initial lockdowns in most states had passed, auto dealers were eventually allowed to offer pickup and delivery services. This created the opportunity for consumers near some dealerships to shop for cars from home, just as if they were purchasing clothing from an e-commerce website.

An analysis run by Constellation Agency, which produces hyper-targeted digital advertising for more than 700 auto franchises across the country, found that since the pandemic began, users have chosen to engage more with automotive content. They have abandoned websites less, and there has been no significant change in overall pageviews. The overall bounce rate decreased from 80% to 50% from December 2019 to June 2020.

To conduct its automotive advertising analysis, Constellation looked at Q1 and Q2 data from around 500 auto dealers running Facebook campaigns. The agency found that while auto dealers were abandoning typical operations during the first phase of the pandemic, users began engaging more directly with dealerships at a higher rate in the form of lead form submissions and phone calls. Lead form submissions increased by 40%, and phone calls increased by 10x from December 2019 to June 2020, correlating directly with the overall increase in time spent on social media.

“Most of the dealers we work with were forced to close down during the pandemic,” says Constellation CEO Diana Lee. “Despite this, users began engaging more directly with dealerships at a higher rate.”

As digital retailing and shopping from home exploded in popularity this past spring, Lee says her agency had dealers requesting these types of ads 100x more compared to the same time period the year prior.

Lee has a few theories about the uptick in user engagement with auto ads, beyond the general increase in social media use.

“People are taking more road trips in their vehicles,” she says.

Lee cites a survey in which 80% of Americans said they took road trips to “keep their sanity” during the pandemic. That increase in road trips is likely to be a big driver in the increased engagement on automotive ads.

Community is another aspect. Lee says hyperlocal ads are even more important for auto dealers today than they were prior to the pandemic, in part because people are gathering in smaller groups within their local communities more frequently. It’s also because people can’t explore as widely these days.

“My family and I have suddenly gotten to know a lot of local people that we had never known before,” Lee says. “So hyperlocalization is the best way to reach people who are thinking and acting locally more than ever before.”

Stephanie Miles is a senior editor at Street Fight.