Expect to see fewer auto ads this holiday season

• Fewer cars for sale means less reason to drive shoppers to showrooms, and that means holiday advertising is also expected to be down this year.
• Of course, automakers have already cut ad spending compared to the days before the pandemic. Reuters said digital car ads were down around 10% this summer and fall, while TV ads were down around 5%.
• Blame the supply chain, but if you’re determined to put that bow on that gift car, you still can – some holiday traditions are too special to be forgotten altogether.

As we enter the second holiday season of the COVID-19 pandemic, automakers and their dealers are faced with a new dilemma: how to best advertise their vehicles when the supply of such vehicles is limited. Considering the challenges of the global supply chain and the well-documented auto manufacturing plant shutdowns that have taken place this year, there just aren’t as many vehicles for sale as usual. And that leads to the question to what extent we should encourage demand.

The answer, it seems, is to remember things. A recent Reuters report found that local automakers and dealers have decided to cut the amount of ad spending they plan to make this year.

Advertising dollars have already declined during the pandemic. Analysis firm Pathmatics found that automakers cut their digital advertising spending by around $ 24 million, or about 10%, between late July and late October, compared to the same time before the 2019 pandemic. Another analytics company, EDO, found that spending on TV ads that aired in those same months was down $ 57 million, or another five percent, from 2019.

“Winter sales are such an institutionalized event that it’s hard not to organize them,” EDO CEO Kevin Krim told Reuters. “But if they do their job really well, they might make people unhappy if the cars aren’t there.”

Just cutting back on advertising because showrooms are a bit sterile isn’t the easy fix it might seem. Data from PureCars shows that dealers who cut ad spend between March and August of this year experienced a larger overall sales drop than dealers who changed their ad messaging while spending more. PureCars found that dealers who cut the amount spent on advertising between 50% and 89% saw an average sales volume drop of 28%. But resellers who increased their ad spend by 9% saw their sales drop only 9%.

General Motors told Reuters it will not spend the same amounts on advertising as in previous holiday seasons, while Ford said it will advertise its F-Series trucks and some SUVs in a “Get Holiday Ready” campaign. Retailer AutoNation will also spend less this year. Lexus will once again pick up screens with “December to remember” messages, but they might look different than they were in the past.

Lexus has been campaigning for over 20 years. “For us to change it drastically, it’s too important for the brand. It’s part of our DNA,” Lexus US vice president of marketing Vinay Shahani told Reuters. Shahani said Lexus will spend about the same amount as in the past, but “you can certainly expect the offers to not be as compelling” as they used to be.

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