a4 Advertising: Strategic Ad Buys Can Benefit Auto Brands in the Chip Shortage

That39s according to Michael Bartoli Senior Vice President for local sales at a4 Advertising the local and national ad sales team owned by Altice USA the nation39s fourthlargest cable operationAt first blush those opportunities might not seem apparent when considering what the auto industry is up against Autos have been hurt more than any other industry Hyundai for instance said earlier this month that it expected sales growth to slow down for the rest of 2021 quotamid adverse business conditions caused by the unstable supply of semiconductor chipsquot General Motors saw slowdowns and downtime at eight plants in the US Canada and MexicoAlixPartners estimates the semiconductor chip shortage will cost the international auto industry 210 billion this year double the 110 billion it projected back in May It39s a big shock to the system and it also affects auto advertisingquotThe future is very uncertainquot said Bartoli quotSome are saying the shortage will end in the first or second quarter of 2022 but others see it lasting into 2023 On top of the unavailable parts there39s a shortage of truck drivers and crane operators to unload cargo at the ports There39s a huge backlog of orders and automakers are competing with other industries such as appliances and phones for the chips When the cars are built we39re likely to see a surplus of 2021 models on the market There will be pentup demand and we should also see the incentives come out again starting with the domestic brandsquotThe crisis has also affected used cars which have soared in value According to Forbes wholesale usedvehicle prices in August 2021 averaged 14712 That was up 32 compared to July and up a huge 9 compared to August 2020 quotThe downside is it39s hard for dealers to find inventory to buyquot Bartoli said quotThey39re reaching out to consumers and offering to come by with a flatbedquotStill there are opportunities amidst the difficulties quotBrand loyalty is being challenged because some popular models are just not availablequot Bartoli said quotAutomakers with vehicles to sell can increase their market share and dealers can win some new customers if they talk about the value of their product Consumers can be brought over from a brand they rewarded with longterm loyalty We39re starting to see some of thatquotAn example of this would be truck owners who39ve routinely traded in their Ford F150 the most popular vehicle in America for many years or Chevrolet Silverado for another model These buyers may never have considered a Toyota Tundra or Nissan Titan but once behind the wheel of these models which are built to please American truck buyers they may form new loyaltiesNew shipments of vehicles are arriving at dealerships 80 to 90 sold already so inventory is scarce and in some cases dramatically marked up over the sticker price Bartoli shared that some dealers have switched their creative to push lucrative service departments which are now offering amenities such as free wifi espresso machines and play areas for the kidsA major perk for some owners is concierge pickup and dropoff for vehicles getting serviced quotDealerships need to keep their brand in front of the public for name recognition even in the absence of full lotsquot Bartoli assertedInevitably there has been some decrease in auto advertising across the spectrum Bartoli shared In 2018 Statista said 1428 billion was spent on auto ads in the US making it the secondlargest category behind only retail 1781 billionquotWe are close to our dealers and are having a lot of conversations with themquot Bartoli said quotWe39re helping them come backquotAs a solution a4 Advertising is focused on offering them advanced targeting multiscreen advertising opportunities With Altice USA as a parent company a4 is able to gather huge amounts of data with privacy maintained on what consumers are viewing on TV and it can continue to target them on their digital devices as wellquotIt means that if an auto dealer is targeting an upscale brand they will want an upscale audiencequot said Bartoli quotWe find for example households that make over 200000 per yearamp160identify their viewing patternsamp160and use other data sets to determine how much time they have left on their lease The advertisers end up reaching exactly the viewers they need At a4 Advertising our goal is to be a partner with our local advertisers continuously finding solutions to drive business even in challenging times like the auto category is currently facingquotClick the social buttons to share this story with colleagues and friendsThe opinions expressed here are the author39s views and do not necessarily represent the views of MediaVillagecomMyersBizNet

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a4 Advertising: Strategic Ad Buys Can Benefit Auto Brands in the Chip Shortage

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Jim Motavalli

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