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Pitching Cars Online in Tough Times

Detroit can’t stop advertising altogether, so it’s focusing on efficiency.

November 21, 2008

Since the auto industry is facing serious challenges, it’s no surprise that the long-time top ad spending vertical had the steepest year-over-year drop of any of the top 10 industries tracked by TNS Retail Forward during the first half of 2008.

Top 10 US Product Categories, Ranked by Advertising Spending, First half 2007 & First half 2008 (millions and % change)

However, as in many industries, online is still growing despite a sharp drop in total ad spending. Nielsen Online AdRelevance said that online ad spending by the auto industry in the first half of 2008 was up 45% over 2007, excluding paid search and online video.

eMarketer estimates that online ad spending by automakers will nearly double by 2012 to $5.61 billion, up from $2.98 billion in 2008.

Online Advertising Spending by the US Automotive Industry, 2007-2012 (billions and % change)

John Kovac, senior director of consumer advertising at AutoTrader.com, told eMarketer that digital’s appeal to the industry was simple.

“We are important to dealers’ media mix right now because we are an efficient media form for them,” he said, adding that digital would continue to be popular with carmakers. “There’s going to be a focus on efficiency, more so than ever. Every dollar that’s spent has to have a return. Whether that’s search, investment in SEO, integrated partnerships or display, we’re looking to get more efficient.”

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