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Auto Advertising to Rise 4% in 2010; Online Auto Ads to Jump 14%

Auto manufacturers are expected to increase their online ad spend by 14% in 2010, while new and used car dealers will increase their ad spend online by 8.6%, according to a new report from Borrell Associates.

The increase in expected spending may be due to the fact that the internet is the leading media driver of walk-in traffic, per a study from Northwood University for AutoTrader.com, which Borrell cites in its report.

Though most customers interviewed by Northwood University stated it was ads on the web that instigated their foot traffic, dealers themselves attributed 30% of foot traffic to the web, with the rest coming from newspapers, radio and direct mail, writes ClickZ.

Automakers will also continue to shift how they are spending their dollars online, decreasing the amount spent on banners, popups and classifieds and increasing the amount spent on email and social network campaigns.

Total auto advertising, across all media segments, will increase 4.1%, to a little more than $19.1 billion, next year. That follows a precipitous drop in automotive ad spend of 31% in the first half of 2009, a year marked by the bankruptcy of Chrysler and GM and a significant decline in new auto sales.

Demand for new autos is expected to rise this year, according to Sanford C. Bernstein.

General Motors announced in August that it planned to increase ad spend for the rest of 2009 and 2010, after having cut ad spend by 15% in 2008. GM is now the third-largest advertiser in the country, behind Procter & Gamble and Verizon.