Thursday, June 12, 2008

Auto Industry Revs Up Online Spending

JUNE 11, 2008

No slowdown online

After consistently leading the US in advertising spending, the automotive sector has dropped into the number two spot behind retail. Ad spending in the sector is going in reverse—except on the Internet.

According to figures published in the new eMarketer report, Automotive Marketing Online: Negotiating the Curves, even as new-vehicle sales decline, automotive marketers will spend nearly $3 billion online this year, up 21.6%.

By 2012, automotive online ad spending will top $5.6 billion.

When eMarketer asked Scott Keogh, chief marketing officer at Audi, how much the automaker was increasing its online budget year-over-year, he replied, "We more than doubled our online ad budget in 2007 to about $1.2 million, and it looks like we'll double it again in 2008."

Auto marketers are changing media lanes and following their market.

Research from Capgemini shows that 80% of consumers now consult the Internet at least once during the car-buying process. The firm reported the percentage was 71% in 2006 and 64% in 2004.

In fact, recommendations from family and friends are being replaced in importance by online customer reviews.

Capgemini found that shoppers are now looking for opinions and reviews from total strangers about specific brands, makes and dealers, as well as to discuss their own impressions and experiences.

A joint comScore and the Kelsey Group study showed that 78% of Internet users who read an online review in the automotive category said it influenced their offline purchase decision.

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