Auto industry advertising dollars continued to rebound from the pandemic in 2023, according to the National Association of Automotive Dealers (NADA).
In their 2023 Full Year Report, NADA data found the nation’s 16,835 franchised dealers spent four percent more on advertising last year for a combined $8.9 billion—rising $330 million from 2022 and $1.4 billion from the 2020 low.
While the total $8.9 billion spent on advertising was the most this decade, overall advertising levels still lags what local dealers allocated to marketing prior to the pandemic. NADA says dealership advertising peaked in 2016 when $9.82 billion was spent to reach consumers.
Breakdown of Advertising Dollars
Overall, 15.5 million light-duty vehicles last year were sold as sales topped $1.2 trillion, according to NADA’s annual publication. It says the average new car selling price was $47,014. NADA also reports that local dealers sold 12.7 million used cars last year for an average $29,308.
The average dealer spent $708 on advertising for each new vehicle sold last year, down $10 a year earlier. In comparison, dealers spent $640 spent in pre-pandemic 2019 and $582 in 2020.
Where advertising and marketing dollars are used is changing, with digital advertising now the preferred medium for local car dealers. A record 72.2 percent of local dealer advertising in 2023 went to search engine marketing and website optimization, social media, and third-party listing sites.
SEO is the New Way
Ad dollars for television made up 10 percent of the average budget, according to NADA, followed by radio at 9.5 percent, five percent on direct mail campaigns and two percent to newspapers.
As for what that translates into dollars at the dealership, NADA estimates the typical new car dealership spent $528,923 in 2023 last year.
SEO website optimization spending averaged $103,140, search engine marketing at $105,256, third party listing sites at $109,487, social media advertising at $64,000, television at $52,892, radio at $50,248, direct mail at $26,446, and newspaper at $11,636.
