Friday, July 11, 2008

Online TV, Automakers and Buyers

JULY 11, 2008

Will Detroit meet the buyers of its dreams on the Web?

Rising fuel prices have made 2008 a tough year so far for automakers in the US. As they examine every possible method to reach potential buyers, online television may benefit, according to J.D. Power and Associates' "2008 Power Auto Online Media Study."

Nearly seven out of 10 new-vehicle buyers surveyed said they went online to find information on TV shows. was their top destination, followed by MSNBC and ESPN.

Arianne Walker, director of marketing at J.D. Power, told eMarketer that although survey participants were not asked about specific activity at those sites, they were asked if they watched TV content online—so it was logical to assume that some of them were watching shows and clips at the top sites, rather than just looking for information about programs and actors.

"As new-vehicle sales shrink, understanding which advertising mediums will provide the best balance of audience reach and composition is absolutely critical," Ms. Walker noted. "As more new-vehicle buyers seek information regarding television shows on the Web, advertisers can benefit from increasing their focus on this medium."

J.D. Power said that buyers of premium-brand vehicles were more likely to look online for TV content than average new-vehicle buyers.

More than three-quarters of buyers of midsize premium utility vehicles, compact premium crossover utility vehicles (CUVs) and midsize premium CUVs said they watched online TV.

For premium new-vehicle buyers, the online video connection makes sense, since Internet users tend to have higher incomes than non-Internet users. For automakers, a focus on online video viewers is practical because the group's population is growing. In the US alone, 190 million people are predicted to watch online video in 2012.

Moreover, an increased online presence by automakers is almost inevitable. Despite the auto sales slump in the US, the industry is not about to let up on online ad spending. Automakers are predicted to spend $5.61 billion on online ads in 2012, up from $2.98 billion this year.

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