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Stalled Auto industry now eyeing towards Video Advertising to keep the Engine running




The Challenge:

The Pandemic has limited the consumption worldwide. Nations are trying to figure out ways to counter the menace and with no vaccine in sight for the next few months, it’s a tough road ahead for mankind.


From an economic standpoint, the situation is worsening, and we are staring at a recession similar to 2008. This one though, seems considerably deeper and impacting almost all Industries. The reflex action of every individual, country and brands has been to go into hiding and limit expenditures to only essentials.

While this worked initially to flatten the curve and save oneself, this solution is not viable in the longer run. The auto brands have realized this and have already started responding to the change by communicating with their customers.


Auto brands realize that the virus isn’t going to go away and they need to re-initiate advertising, because people are likely to be hesitant to step out for the next several weeks or months.


Auto manufacturers need to quickly adapt and come up with innovative solutions.


A recent study on the change in Consumer Behaviour indicates the true nature of challenge on a global scale.



source: McKinsey

With a second wave of the virus expected in the next two months, the bigger question is “How is one supposed to buy a car?” or should the real question be “How will auto manufacturers sell cars?”

Impact on Automobile Industry:

China and US are pillars of the automotive Industry. The crisis has impacted all the major players in these countries.

Q1 2020 as compared to Q1 2019 was down for China by approx. 9% while it was down by 20% approx. for US. While China is in recovering stage, US is the epicentre of Coronavirus in the world where production has completely stopped. EU and rest of the world show similar trends.

The impact gets bigger with each passing month. Case in point, India auto makers registered zero car sales in the month of April. Source: news18.

Consumer behaviours have and will be changed forever. Test drives, car unveiling ceremonies and family pictures at the showroom would be a thing of the past. No walk-in enquiries may be entertained, and people will have to book an appointment to visit car showrooms.


Rise of Video Advertising:

Digital is set to gain since more content would be consumed online in the next few months.

With change in user behaviour post COVID imminent, automakers are scrambling for a solution and Video advertising is the way forward for the Industry.


Have you ever wondered what factors would you consider in buying a car during lockdown?

A few common factors considered globally in a usual situation are car make and model, variants and colours, performance stats, financing options etc.


The prerequisites still stay the same but, with limited human mobility, Video advertising provides an opportunity to showcase all the relevant features of the car.


Imagine a video unit that enables a 360-degree view of the car interiors, it has the pricing and financing options, available variants/colours and performance statistics listed to provide a virtual view of your dream car.


Would you not be tempted to test drive it?

While this isn’t meant to be an exact replacement of a test drive, you would want to ‘know it all’, before visiting a showroom. You would have your options figured out and then you reach out to the dealer to close the deal.

General Motors, which owns Chevrolet, Buick, GMC and Cadillac have a feature on their website- SHOP.CLICK.DRIVE. where customers can select make, model, colour and order a car online. FIAT has also “Build & Price” on their site which allows users to ease the buying process online.

Moreover, brands that are engaged in donations and PSAs, are using video advertising as a medium to let their customers know about their contribution to help sustain brand image.


General Motors, which owns roughly 17% of US market share in 2019(source: statisa), shows a similar shift in strategy towards video.

GM spent around 55% of their total spend on video in the entire 2019. Source: pathmatics

In 2020 so far, GM has spent more than 80% of their total digital spends on video. Almost half of the digital spend this year has been on YouTube. That’s a massive shift to video indicating the strategy auto giants want to take during the crisis. Source: pathmatics


The future of the auto Industry is an “Appointment-based single-visit” to the showroom and video advertising would help the brands increase their hit ratio with the handful of customers visiting their showroom.


The opportunity in the video space for auto Industry is massive but the window is open for a short time. If this isn’t capitalized

in the next 10-12 months, brands would move on and figure out another way to connect with their consumers.