The Auto Industry Takes a Digital Turn

wednesday 14 march, 2007

Despite a 3.4% decline in ad spending in 2005, the last full year for which figures are available, at $21 billion in overall spending the automotive industry is still the single-largest US advertising category. So, where auto ad dollars go often determines where other marketing budgets follow.

"Automakers and dealers pulled dollars out of television, newspaper and magazine media buys and redirected them to digital media in 2006," says Lisa Phillips, eMarketer senior analyst and the author of the new Automotive Online: The Race Is On report, "including rich media ads and microsites, search engine optimization and mobile marketing, and short films and video-on-demand."

eMarketer predicts the automotive category, consisting of manufacturers, dealers and after-market vendors, will account for $2.69 billion, or nearly 14%, of the $19.5 billion estimated to be spent on Internet advertising and marketing this year.

eMarketer estimates the auto industry will spend $1.06 billion on search marketing alone this year and more than $1.7 billion in 2010.

"Consumers are heavy users of search when it comes to online auto shopping," says Ms. Phillips, "especially to find vehicles, price information and local dealerships."

There's no question that automakers, dealer associations and dealerships are aware of the power of search advertising. However, recent research and trade reports show they are not fully integrating search into ad campaigns, much less their own Web sites.

"As consumers go online in ever-larger numbers to research new and used vehicle purchases, the stakes get higher," says Ms. Phillips.

Research from J.D. Power and Associates shows the chance of making a sale roughly doubles when consumers visit a brand site first, rather than an online shopping site.

Source: eMarketer