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As more new car shoppers head to auto dealership websites and avoid newspaper ads, more ad dollars are spent on the internet, according automotive marketing research firm Friedman-Swift Associates, writes Brandweek.
“It’s a very real possibility that dealers will spend more ad money driving traffic to their websites,” said Judy George, Friedman-Swift, Cincinnati president. “As more dealers look at their own numbers and see that only 35 percent of their customers are looking at the newspaper before buying a car, it will change their advertising habits.”
Of the 12,270 new-car customers surveyed in 2005, a growing number are using dealer sites before making a purchase.
In February, eMarketer predicted that over the next two years automakers will increase their online ad spending from 2005’s budget of $1.4 billion to $2.7 billion in 2007
In January, automaker print ad spending plunged 23 percent, though in February numbers rallied a bit.
Ford Motor Co.’s print ad budget share dropped last year from 23.5 percent to 21 percent, while its online allocation grew from 3 percent to 3.5 percent, and GM’s budget fell to 15.8 percent from 17.1 percent for print and rose from 2.4 percent to 3.5 percent for the web.
Newspapers are feeling the pinch. Last December, The Tribune Co. said that auto-classified revenue at its newspapers sank 16 percent in December, Lee Enterprises Inc. reported a 15.2 percent drop in the same category for the fourth quarter, and McClatchy Co. said its papers saw a 20 percent decline for December.
“We also see that the consumer is forcing dealers into how their advertising is structured,” said George. “Branding on a local level, say, for Bob Smith Ford, is happening more frequently and has become more of a factor in selling cars because people are looking for it on the Web.”
“Using the internet will ultimately retard the growth rate for advertising spending,” said John Holt, CEO of The Cobalt Group, which offers marketing services to the auto industry. “It has become fundamental and life-changing for these dealers in this industry.”
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