Internet To Become Top Channel For Used Car Marketers

Here’s another good one:

The Center for Media Research says that according to a new report from Borrell Associates, automotive ad spending will reach $31 billion this year, but total ad dollars will grow only 1.7 percent during the next five years, compared with an annual growth rate of 3.7 percent in the last five years.

Online spending for the industry will hit $2.8 billion in 2007 and represent 7.6 percent of all automotive advertising, an annual growth of 13 percent. Moreover, the Internet will become the top marketing channel for used-car marketers this year at the local ad level, surpassing newspapers for the first time. Used-car dealers are allocating 20 percent of their spending to the online channel, compared with 7.6 percent of the industry’s total online ad budget.

Online car marketing will hit $4 billion by 2010, says the report, and become the second most-used medium for automotive advertisers, surpassing newspapers, cable, radio and direct mail and trailing only broadcast TV.

Budgets for offline auto ads in newspapers, direct mail and directories will decline by 20 percent each during the same period, the report indicates.

The report says that local car dealers will spend 29 percent of their online ad budget on online video and paid search this year, but will increase that proportion to 76 percent of online marketing by 2012. E-mail will also gain as a lead-generation tool, while display ads such as banners will decline.

Many shoppers are going directly to manufacturers’ Web sites rather than to third parties, doing their early research online. The Internet is not yet effective at reaching car buyers still in the “dreaming” stage, the report says, adding that manufacturers will use TV spots to sell their brands and then drive prospects to a Web location.

From Dealer Pre-owned
Wednesday, May 23, 2007
Issue 43
VOLUME 1 ISSUE 43,b5wVQglb

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