The total advertising spend of the auto sector, according to the recently released dentsu e4m digital advertising report 2024, amounts to Rs 5,223 crore, which is about 6% of the total ad pie across industry verticals. However, a closer look shows that digital media dominates the auto sector’s total advertising expenditure, constituting around 35% of the share, which is more than one-third. This is followed by print (33%) and television (27%).

In terms of value, the digital media spend of the auto sector amounts to around Rs 1,815 crore, which is about 5% of thedigital ad pie.

Within the digital domain as well, paid search turns out to be the most preferred byauto brandssince they allot around 31% of their digital ad budget to the same. This is followed by online video (26%), display and social media at 16% each, and lastly other digital media formats that constitute around 12%.

Auto sector - Over the years 

If we go back a year, in 2022 auto sector’s share in total ad pie was Rs 5,118 crore, which indicates that in 2023, there was a slight 2% jump in its share. However, in 2022 the sector had allotted 26% of its ad budget to digital, which went up to 35% in 2023, thedentsu-e4m reportnotes.

The digital inclination was even lesser in 2021, when the share was 20% of the total advertising budget, in the auto sector. This was a dip as compared to 2020 when it allocated 25% of its budget to digital. During 2021, the auto sector's share in the total digital ad pie was barely Rs 970 crore.

We spoke to auto experts to understand the reason behind the growing digital AdEx in the sector.

Hero MotoCorp’s emerging mobility business allots around 60-70% of its total ad budget to digital. Manav Sethi, Head-Media Martech & Growth, Emerging Mobility Business Unit, Hero MotoCorp shared that the company saw close to a 40% jump in its digital ad spend in 2023 as compared to 2022. “We believe that potential consumers are mostly online and hence a chunk of whatever we spend on media is also spent on digital/online,” he added.

Delving into the preferred digital media format, Sethi shared that a majority of its digital AdEx happens either on bike portals or on Google/Meta.

Maruti’sShashank Srivastavashared that the company’s digital spending has gone up from 29% to 36% of the total spends. In terms of growth, it is around 20%. He also mentioned that Maruti’s spends are maximum on Paid Search, followed by social media, display and online video.

Srivastava feels that there has been a rapid shift in customer preferences because of increased digitalization. “This is being reflected in their content consumption choices, pushing OEMs to also shift their focus towards digital and OTT platforms. Spending on digital media is growing and is almost in the vicinity of television spending across the auto industry at around 26% of the overall media budget,” he added.

According to Srivastava, Maruti also follows a ‘Digital Always-On’ mantra and prefers catering to its audience through search advertising and targeting in-market users. For example, the company allocated around Rs 8 crore in digital and OTT during the festive season last year.

“With digital platforms receiving widespread adoption, we can see the auto industry spending more on digital platforms than before. We expect digital expenditure to grow at a faster rate than TV with the latter itself poised to grow at close to double-digit number,” he said.

However, there still does exist some exceptions in the auto industry. Virat Khullar, Group Head - Marketing at Hyundai Motor India Limited, shared that the company still allocates a majority of its ad budget to television. For Hyundai, television accounts for 55% of the ad budget, digital comes to around 35% and the remaining 10% goes to experiential marketing.

According to industry experts, the automotive segment is set to witness growth in the coming year, owing to the increased consumer income, demand, and the need for personal mobility. The government’s push to boost manufacturing of advanced automotive technology products with the launch of Production Linked Incentive (PLI) schemes, combined with other benefits to consumers and rising awareness of environment sustainability, is fueling the demand for fuel-efficient electric and hybrid vehicles, the dentsu-e4m report noted.

Furthermore, India's investments in infrastructure development and urbanization play a pivotal role in the automotive sector and, ultimately, contribute to the overall economic development of the country.