March 2007 Automotive Online: The Race Is On

Industry Stats & Data by eMarketer

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Automotive Online: The Race Is On, March 2007

The automobile industry is shifting gears from traditional media to online media, transferring dollars out of television, newspapers and magazines to the Internet.

In 2005, total ad spending by the US auto industry declined 3.4% to $21 billion, but online spending increased 37%. This increased online ad spending is going to microsites, social networks, rich media, paid search and display ads.

eMarketer estimates that in 2007, auto manufacturers, dealers and after-market vendors will account for $2.54 billion of the $19.5 billion spent online.

One indication of the strength of the online channel for the auto industry is the number of ads placed in online classifieds. The sector will account for 10.6% of online classified ads this year, spending $315 million, according to a Morgan Stanley report. By 2010, the investment firm projects automotive online classifieds will account for 12.7% of the total, or $495 million.

In paid search, the auto industry will spend $1.06 billion in 2007, and $1.7 billion by 2010. That makes sense since consumers are heavy users of search when it comes to online auto shopping.

Auto marketers are avidly interested in emerging advertising tactics. They are betting heavily on online video, mobile phones and interactive TV channels. In one week in February, for example, BMW’s Mini, Toyota’s Scion and Mercedes all debuted an interactive feature on the Internet. Mini sponsored a Web-film series, Scion started five-minute Webisodes, and Mercedes claimed an island on the online game Second Life, joining three other auto sellers who already have showrooms there.

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