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Digital will become an effective conversion medium for the auto industry—Harjot Singh Narang, Dentsu

09-February-2018
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Digital will become an effective conversion medium for the auto industry—Harjot Singh Narang, Dentsu

While the overall advertising expenditure is expected to grow by 10-12% in 2018, one of the biggest categories driving this growth is the automotive industry. Owing to strong domestic demand and government’s focus on electric vehicles, the auto sector is witnessing significant growth, which in turn is getting translated into more ad spends.

According to Harjot Singh Narang, President, Dentsu One Pvt Ltd, the auto sector will continue to show promise as far as ad spends are concerned.“If you look at the sector in general and if you see the business where it is flowing, this is one market that is showing most promise given that there is a lot more investment flowing into product. Moreover, a lot of auto communication is the first showroom for its product. Now players in the auto industry understand where the grain of the consumer lies. There is lot of research and consumer work going in to understand them and the category is realizing that just showing the vehicle is not enough.”

When it comes to communication channels, the auto industry is highly skewed towards traditional platforms like TV and Print, though the focus on digital has also grown significantly. If we look at the numbers, TV and Print alone attract as much as 60-70% of auto ad spends. Explaining this high dependence on traditional platforms, Narang says, “The media market in India is dominated by TV because it is the most cost effective medium to reach out to masses. However at the same time, a lot of conversion models which are being run on digital are giving good results, but it continues to be only 13 to 15 % of the market. In the coming time digital will become an effective conversion medium for the auto industry. If digital can shorten consumer journey its ROI will grow significantly. In the next few years it can reach 30-40% share of auto ad spends.”

Talking about digital, it is important to mention that in 2016, the auto sector contributed to 8.2 percent of the overall spending in digital marketing which is much more than other major sectors like Real Estate, Telecom, Retail, E-commerce and Banking. Stating that the aggressive marketing spends will continue on the back of rising demand and entry of new players, Naranag adds, “There are enough tailwinds to push this sector ahead, and that itself will create growth in the spends that they do. Given the fact that the response to investment in communication has always been good in this category, all players who have got a base footing in the market will up their spends. The question is- will the new entrants and smaller entrants really try and do 5X of that to overtake market share?”

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