Auto dealers have historically been high-octane local television advertisers, but the shift to streaming has left many of them in neutral.
NBCUniversal, working with auto marketing tech company Constellation has launched Spot On Automotive, which enables even dealers with small budgets to buy targeted, high-quality connected TV ad inventory.
Volkswagen of America has signed on as the first automaker to use the new facility.
NBCU Local launched Spot On, which delivers NBCU digital inventory to local advertisers, in 2020.
But local auto dealers faced unusual hurdles that kept them from taking advantage of CTV, Shawn Makhijani, senior VP of business development and strategy & NBC Spot On at NBCUniversal Advertising & Partnerships, and Diana Lee, CEO and founder of Constellation, told Broadcasting+Cable.
Advertising for local dealers has to be approved by the manufacturer to make sure it conforms with the national ad campaign’s tone and colors and qualify for co-op marketing dollars. Commercials can only run in the area where the dealer is franchised by the factory. And in many states, there are regulations that limit dealers to advertising models they have in stock.
All of that can take a dealer two weeks to manage, and some have been known to just give up and turn to social media and search instead of CTV.
Constellation, started by Lee seven years ago, has all of the rules for auto advertising in its computers and uses generative artificial intelligence to render compliant spots that can be ready to roll out on the NBC Spot On platform in as little as 24 hours.
“Now dealers have an end-to-end solution for targeted CTV campaigns tailored for their needs and wholly focused on reaching their most desired potential buyers and of course selling more cars,” Makhijani said.
Dealers with monthly budgets as little as $500 can use Spot On Automotive. Normally a dealer needs a budget of $10,000 to $20,000 to mount a CTV campaign, Lee said.
“This opens up a whole other universe for auto dealers to be able to advertise in the best content,’ she said. “They could do it in English. They could do it in Spanish. It's the first of its kind to be able to do it in a way that’s culturally relevant to those locations and those communities.”
The opportunity is huge. According to Lee, there are more than 17,000 new car dealers and each spends an average of $50,000 a month on advertising. She calculated that potential digital spending is in the $10 billion range.
“Auto generally is a very big category of ours. It's part of the reason we're so focused on it in this space,” Makhijani said.
When Spot On launched regional dealership groups (tier 2 in car marketing speak) utilized the platform. But local dealers (tier 3) didn’t yet have everything they needed–until now.
Operating at the local level can be frustrating unless you’re properly structured and understand the landscape, Makhijani said.
“Our plan is to take this type of democratization, automation and simplification of the local CTV ecosystem to many other categories. not just automotive,” he said. “So this is really the first step of the continued Evolution of NBCU's investment in local advertising in the streaming space.”
To target CTV ads, Spot On can use first party data from the dealer or the manufacturer or NBCU data. It can also use generally available third-party data.
Some of that data would be difficult for a small dealer to access and use.
The inventory Spot On makes available is across Peacock, NBCU properties. It also sells inventory from third-party video publishers.
"Because we're Comcast NBCUniversal, we're able to go with the market and buy inventory at the top of the waterfall from all the major suppliers and sell a complete offering,” Makhijani said
The arrangement is also good for the manufacturers.
“Because it's so difficult for dealers to access truly premium CTV inventory. They're relying on local solutions. They're taking those marketing dollars and placing them in whatever inventory they can get, Makhijani said. “If you’re an original equipment manufacturer [OEM], you want those dollars spent on the most premium inventory that fits the brand and its marketing goals and is being targeted correctly to you know reach the audience that that they want,” he said. ‘It improves the overall marketing ROI for the dealer and the OEM.”
Makhijani said that CTV advertising has proved to be more effective than other digital advertising. He said CTV generates 30% higher ad awareness and 16% more purchase intent. NBCU CTV ads are even more potent compared to social media,with 36% more ad recall and 34% more brand favorability.
“Volkswagen is thrilled to be part of this innovative opportunity to our Dealers with NBC and Constellation,” said Rachael Zaluzec, senior VP of marketing & customer experience, Volkswagen of America. “Democratizing premium content, once only available at a national or regional ad association level, is a huge win for our entire dealer network and brand.”
Lee said VW was the first automaker to certify Constellation when it started up. “They're willing to try new things,” she said.
She added that other media companies couldn’t offer what NBCU has in Spot On Automotive.
“They didn't build their ad platform to represent local,” she said. You can’t launch ads for thousands for franchises at the same time without automation.”
NBCU’s investments in ad tech and the contributions from technology companies owned by Comcast have enabled Spot On.
“We actually were fortunate enough to be able to leverage those resources to solve for this,” Makhijani said. “It hasn't been done before and part of the reason why it's never been done is you needed Constellation's local expertise our local expertise and then the tech expertise to bring it all together.”
