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eMarketer - Automotive Marketing Online: Negotiating The Curves.

By eMarketer

eMarketer recently released their latest summary of online automotive marketing trends titled, Automotive Marketing Online: Negotiating The Curves.
Some highlights:

• 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—everywhere except on the Internet.


• 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.


• Auto marketers are following their customers. Research shows that 8 out of 10 consumers now consult the Internet at least once during the car-buying process. In fact, recommendations from family and friends have been replaced in importance by online customer reviews—by strangers.


• Manufacturers’ sites are now visited about as often as third party sites, and how dealers handle online inquiries can make or break a sale.


• This year is expected to be the worst for sales of passenger cars and light trucks in a decade. Particularly painful for an industry where new vehicles sell for the skinniest of profits is slack demand for the once invincible (and highly lucrative) trucks and SUVs.  Not surprisingly, fuel-efficient models are becoming more popular.


• Ford, the country’s number-three automaker after GM and Toyota, predicts that sales of small cars in the US will increase 25% by 2012 to a record 3.4 million, while SUV and pickup sales continue to languish.


• Automakers ad spending dropped in 2006 and again in 2007, as automakers, dealerships, part suppliers and accessory marketers spent $18.6 billion; down 6.4% from $19.9 billion one year earlier, according to TNS.


• GM led the decline in ad spending, cutting its advertising spending by $814 million, or 19.8%. The former top-spending US advertiser fell to third place, behind Procter & Gamble and AT&T.


• Despite the overall decline in automotive ad spending, from 2005 to 2007 spending moved from traditional media into digital and out-of-home initiatives, according to TNS Media Intelligence. Hardest hit were newspapers (-43.5%) and magazines (-13.1%), while TV (-7.5%) and radio (-7.4%) experienced smaller declines. At the same time, spending for online display ads rose 100.6% and outdoor climbed a modest 3.3%.


• Internet ad spending by dealers is also rising in both share and importance: According to NADA, the typical dealership spent 16.5% of its ad budget on Internet advertising in 2007, compared with 11.5% in 2006 and 9.9% in 2005.


• In 2008, the question for both OEM and dealer marketers is not who is using the Internet to shop for cars, but who isn’t? Capgemini reports that 80% of in-market vehicle shoppers go online at some point in their search. The firm reported that percentage was 71% in 2006 and 64% in 2004.


• A global trend toward manufacturers’ and dealers’ sites and away from information and independent car valuation services was confirmed by Capgemini data covering 2005 to 2007. In the three year period, respondents claiming visits to automakers’ sites increased 27% and dealers’ site visits rose 2%. Meanwhile, the percentage of respondents citing information sites declined 14%, independent e-tailer sites were down 15% and independent car valuation services fell 3%.

The full document can be found here