Why OnStar spends 90% of its ad budget on addressable digital media

OnStar is spending upwards of 90% of its ad budget on digital addressable media. The 25-year-old in-vehicle safety and security system company is hoping the strategy will allow it to more effectively target customers and better inform its 2023 marketing strategy.

“We know who many of our consumers are, and we want to make sure that we’re hitting our reach and frequency targets to them as precisely as possible,” said Laura Thornton, head of marketing for the digital business team at General Motors, OnStar’s parent company. 

Over the past year, OnStar has ramped up its addressable media efforts in streaming, audio, social media and connected television. The latter of which has become a trend across the industry, especially as third-party cookies are disappearing from the digital advertising ecosystem. (Read more on that here and here.) To create its targeted audiences, OnStar leverages a combination of first-party data along with proprietary media targeting tools.

A big portion of the company’s spend this year was dedicated to streaming audio, including a branded podcast and in-stream podcast advertising. Last year, OnStar’s addressable media spend accounted for about 60% of its budget. This year, that figure was 90%, a significant increase. (Thornton did not disclose specifics.)

“The reality is all of us as marketers are trying to learn what the right mix of addressable spend is,” Thornton said. “We said, ‘Listen, let’s make this the year that we go all in on addressable and see how it plays out for us, and then for 2023, let that inform our plan a bit better.'”

So far this year, OnStar has shelled out more than $3.3 million dollars on advertising, compared to spending just over $3.5 million in 2021, according to Pathmatics. Meanwhile, Kantar reports that the vehicle security company spent more than $2.8 million on advertising from January to June this year. Within that same time period last year, OnStar spent more than $31 million on advertising, a significant difference from this year’s spend. (Kantar does not track social media spending as Pathmatics does.)

An addressable media-led strategy like the one OnStar is using not only allows the company to access more information, but also allows for more targetable media within channels that can typically be difficult to target, including television and radio, according to David Mirsky, group director of media at MMI Agency. 

“Taking this approach, a brand can be more efficient and, ideally, drive more sales with less waste of media impressions,” Mirsky said in an email. 

Across the data-obsessed ad industry, addressable media has become increasingly more important with advertisers looking to better target customers. It’s a trend that experts expect to continue as targeting improves and costs decrease.

“As cookie data goes away, the importance of addressable media becomes even more crucial, to ensure that media dollars are reaching the right audiences,” Craig Kronenberger, founder and CEO of data and digital marketing firm Stripe Theory, said in an email to Digiday.

The learnings from this year’s strategy are what will inform OnStar’s marketing strategy next year, per Thornton. Heading into 2023, there are plans to expand the media mix, making space for linear television and other more traditional media channels while continuing to lean into addressability in digital, she added.

“Expect to see more from us. I can’t really share whether that’s more from a budget perspective or just more fun things, but we will be more present next year,” she said. 

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