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Auto Industry Banks on Internet Advertising




You might notice by now that the Marketing Pilgrims appreciate numbers about online spending. In particular I like the ones that capture the interplay between the on and offline world.

How is this being done? I’m sure there are other examples but Google has put their technology in certain models of cars. They are also planning to put driving directions via Google Maps at the gas pump. And when I did a search to see what people near me are searching for online, I was surprised how many searches are for cars by specific brand name and location. This is an opportunity.

There’s a new study by the Kelsey Group talking about online auto advertising. Budgets are rising from 5% this year to 13% in 2011. Money spent for TV advertising is slowing down. Like newspapers, the auto industry is suffering and looking for ways to revive sales, and channeling more into the Internet and less into traditional advertising. ”

Global spending on automakers and services will most likely hold steady at about $40 billion. Less of that will be going towards magazine, tv, direct mail and other advertising. That’s not to say that they aren’t still putting money into TV and cable advertisements but the spend is slowing.

“Automakers, including their local dealers, have increased internet spending fourfold since 2002, according to TNS Media Intelligence — to $739 million last year from $175 million five years ago…”
– TNS Media Intelligence

Kelsey Group estimates automakers’ 2008 U.S. ad spending will be flat or down slightly. CEO Neal Polachek said carmakers will shift more dollars online and to out-of-home, with declines in TV, magazines, newspapers and direct mail.

Most notable is Hyundai – they doubled their online ad spending for next year.

“Bob Schnorbus, chief economist at J.D. Power & Associates, predicted Americans next year will buy between 15.7 million and 15.8 million new vehicles…” and more of them will be smaller, fuel efficient cars. As long as gas prices are high, this looks like an opportunity for GM and others focusing on that market. I prescribe an SEO blog that focuses on keywords and inventory while educating people about fuel efficiency (see Auto Blog Green).

Individual dealerships could have a blog but I really see a network of blogs. Since I’m not familiar with the industry I’m not sure who’s doing it but the real estate market has certainly caught on to this.

  • Pingback: Auto Industry Banks on Internet Advertising | Unsold Cars - Tips on buying new and used cars()

  • http://www.goodnightmoonfuton.com Futon-Matt

    This really isn’t a surprise, everything’s heading towards the internet these days. I guess we’ll be seeing more pop-ups soon.

    Matt

  • http://www.nationalhotlist.com Frank

    As finance companies and car manufactures lower their spending on off internet advertising. The finace companies have more then tripled their budgets on finding their lost vehicles. Gas prices rise ever so higher every day, people can’t afford new one’s, so they run off with the one’s they have. Car manufacture’s and finance companies raise their rates. It’s a never ending battle. Our website is doing everything in our power to help finance charges go down.
    “Bob Schnorbus, chief economist at JD Power & Associates, predicted Americans next year will buy between 15.7 million and 15.8 million new vehicles…” There will be that many or more, sold at auction around the country every month. Advertising to sale a new car should be minimal, finding your car should be maximal payout, (skiptracing, investigation, recovery) and no amount should be spared. The asset is valuble, millions of dollars are lost every year due to customers running away with financed vehicles. Quit spending on advertising, we now where to buy and what to buy.SPEND MONEY TO FIND THEM. Maybe then, finance charges will go down, and more cars will be purchased.

  • http://www.bank-cd-rates.net/top-cd-rates BankMan

    And now traditional media is trying to make deals with the Googs, Yahoos, and MSNs. Newspapers are laying people off left and right.

    The internet just makes finding what you want so much easier. Dealerships that use proper SEO and local optimization should do well.

    I believe Dealerships get better and less expensive results using the internet.