One in three TikTok users is in the market for a car and, as of last month, dealers and manufacturers can advertise directly to them. But will people really purchase vehicles mid-scroll?
On 19 February, TikTok announced that it had introduced two ad formats for automotive ads: inventory ads for dealers and model ads for manufacturers. Kristina Karassoulis, head of luxury and auto at TikTok, explained that the inventory ads allow dealers to showcase their stock and are ideal for targeting buyers who are ‘ready to take action’. The model ads, on the other hand, are for consumers in the consideration phase, since they showcase specific models, trims, and offers.
Karassoulis said TikTok developed this ad solution after discovering that 37% of users over the age of 18 are actively looking to purchase a vehicle, and car content on the platform grew 25% year-on-year between July 2023 and July 2024.
TikTok has also become more popular as a search platform, with 56% of users watching reviews and discovering new vehicle models on the app. Forty-four percent have also said that creator content helps influence their purchase decision.
‘Buying a car is a high-consideration journey, and we know that it requires research and comparison. And so I think the challenges that [automotive advertisers] face now goes back to the creative,’ Karassoulis said. ‘It’s not just about being able to create one piece of content that is going to run on TV.’
Dealers and manufacturers can choose between two creative formats for the auto ads: a video with a product card or a photo carousel with multiple links. This gives advertisers the freedom to experiment with the creative — and move away from clichés, like cars cruising along empty streets.
‘What auto ads enable us to do is now be a platform that drives impact, sales, and lead generation,’ Karassoulis said. ‘And I think that it all starts with creativity. We have to lead [car buyers] in with creativity and win them over when they’re ready to purchase. It’s about establishing us as a full-funnel platform.’
But is TikTok the right environment for automotive ads?
‘Just 16% of car owners say they purchased theirs online. Even among 18 to 24-year-olds, this only reaches one in five. And car buyers are most likely to say that review sites and specialised online marketplaces are trustworthy sources of information, with social media scoring lower,’ said Shauna Moran, consumer trends manager at GWI.
That said, Moran believes TikTok can still help move users down the funnel. ‘I imagine TikTok’s automotive ads will be great for raising brand awareness,’ she said. ‘Though, it may take some time for the app to establish itself as a full-funnel platform for selling cars.’
Callum McCahon, executive strategy director and partner at Born Social, said that the ads are not about ‘getting someone to literally buy a car mid-scroll’ so much as they are about moving users ‘from discovery to action’.
‘In a category notorious for long lead times and disconnected customer journeys, TikTok is offering automotive brands something valuable: the promise of a genuinely integrated experience, linking inspiration directly to inventory,’ McCahon said.
Karassoulis said brands that have tested the auto ads have already seen results, with Peugeot recording ‘a 95% improvement in their cost-per-engage session’ metric. Other brands have also seen a 40% decrease in cost per acquisition, a 78% increase in click-through rates, and a 40% increase in engagement rates.
TikTok is not the only tech platform trying to lure in automotive brands, either. In January, Amazon partnered with Hyundai to launch Amazon Autos, which allows US customers to browse and order Hyundai vehicles.
José Muñoz, president and CEO of Hyundai Motor Company, said in a statement that the collaboration helps customers ‘conveniently discover, learn about, and purchase’ vehicles and that it ‘represents the future of automotive retail.’
Featured image: Peugeot automotive ad
