My Business Guide

Automotive Marketers Rev Up Online Advertising

Auto industry to account for 15 percent of total US online advertising spending

FEBRUARY 16, 2006 -- NEW YORK, NY Automotive advertisers are finally gearing up for an online advertising surge and the increased online spending will come at the expense of other media, according to a new eMarketer report on the state of automotive online marketing.
"The industry's foot is definitely coming off the brakes and onto the accelerator this year," says Lisa E. Phillips, eMarketer Senior Analyst and author of the new Automotive Online: Gearing Up for Greater Spending report. "Automotive advertisers are gearing up for an online advertising surge, but it's going to come at the expense of other media."

Despite increasing traffic, online advertising among the top 10 auto manufacturers accounted for just 2.5% of their total ad spending in JanuaryNovember 2005. But thanks to tight online inventory, higher prices and changing tactics, eMarketer estimates that auto companies will spend $2.7 billion in total online advertising in 2007, compared with $1.4 billion in 2005. And by the end of 2007, the auto industry will account for 15 percent of total US online advertising spending.

"The automotive industry is the largest advertiser in the world. In the US alone, the industry spent more than $17 billion in the first 11 months of 2005," says Ms. Phillips. "But, despite the fact that almost 70% of consumers use the Web at some point in their automotive purchases, the industry has been slow to commit to online advertising and promotion."

Ms. Phillips notes that the Internet has turned the idea of an orderly ad buying process, or "funnel," into ancient history. "With the funnel effectively dead, behavioral targeting looks like a light on the horizon," she says. "As auto manufacturers are trying every gambit to build brands and get their products noticed, most of the major independent sites offer some form of this technique and several manufacturers are already testing it."

Tactics mentioned in the report include: Audi and Volvo sponsoring National Public Radio podcasts; Cadillac's five-second film contest bumping site traffic 358%, according to Promo magazine; Chrysler targeting 'Road Trip' advergames to moms interested in its Town & Country minivan; a limited edition of the Pontiac Solstice selling out within 45 minutes after it debuts on an episode of The Apprentice; Honda's viral videos for its Element SUV; General Motors buying ad programming on Mobile ESPN while Jeep just launched its own mobile phone TV channel; the Jeep Commander comes with an online sitcom family called the Mudds; Ford producing an online mockumentary about a Norwegian noise rock band and tests video on demand.

eMarketer's Automotive Online report answers these key questions:
Where are automakers spending their advertising budgets?
How well does behavioral targeting work in the automotive industry?
In what ways do consumers use the Internet to buy cars?
Does the online experience influence consumer decision-making?
And many more...

About eMarketer
eMarketer is "the First Place to Look" for market research information related to e-business, online marketing and emerging technologies. eMarketer aggregates and analyzes e-business research from over 1,700 sources and brings it together in analyst reports and the "eStat Database" the most comprehensive compilation of up-to-date e-business and online marketing statistics in the world. Visit eMarketer for more information.

Source: eMarketer

[ Comment, Edit or Article Submission ]