Dealer.com, a Cox Automotive (a division of Cox No. 18 on the DiversityInc Top 50 Companies list) brand operating websites for more than 60 percent of franchise car dealerships in the United States, reported that car shopping behavior in battleground states is suffering.
Identified through vehicle detail page (VDP) views from its dealership network, shopping behavior was down 9 percent year-over-year (YoY) [Dealer.com hosted site data, September 2015 – September 2016]. Battleground states, or states in which no single candidate or party has overwhelming support to secure electoral votes, include Colorado, Florida, Iowa, Michigan, Nevada, New Hampshire, North Carolina, Ohio, Pennsylvania, Virginia and Wisconsin.
With new-vehicle sales also down 2 percent YoY in September, the contentious presidential election is adding further challenges to car dealers operating in battleground states: sinceJanuary 2016, visitors to car dealership websites across the Dealer.com platform are 6 percent lower in battleground states compared to non-battleground state dealerships within the network [Dealer.com hosted site data, Jan-Oct 2015, Jan-Oct 2016].
A major factor hurting car shopping behavior in these states is the rise of digital advertising costs, as battleground states have averaged 7 percent higher paid search costs than non-battleground states since January, and a bigger hike in YoY advertising costs (11 percent) than non-battleground states (7 percent).
"There is a higher demand for advertising in an election year, in particular, the states that can go both red and blue," said James Grace, Director of Analytics Product Management at Dealer.com. "Dealers that cannot account for additional advertising spends suffer, which can lead to a decline in online traffic, and ultimately a hit to their bottom lines. We're focused on helping customers get creative in optimizing their digital marketing budgets so they can finish the year strong."
To combat higher ad spends and demands leading up to the election, dealers should consider producing election-specific content and specials. Following the election, there will be more opportunities for dealers to produce ads and appeal to customers during the holiday shopping season.
For more information and statistics on Dealer.com's findings on the presidential election's impact on auto sales and ad spends, please visit the Dealer.com website here.