Automotive advertisers are increasing their presence on the internet, with a new report from eMarketer expecting almost $2.7 billion to be spent on the sector online in 2007.
Overall advertising budgets for the industry are not expected to increase during 2006, but more spend will move online.
Advertisers increasing tendency to move advertising money online is resulting in a decrease in traditional media spend. According to TNS Media Intelligence, in November 2005, online adspend in the automotive category increased by 12.1%, while traditional media spend dropped by 2.5%.
A study published last year by online magazine, Direct, confirms this shift in adspend showing that marketers are moving their adspend online, with 60% planning to raise their online advertising expenditure in 2006 (see Marketers Move Adspend Online).
Commenting on the findings, Lisa Phillips, eMarketer senior analyst and author of the report, said: “Automotive advertisers are gearing up for an online advertising surge, but it’s going to come at the expense of other media.
“The automotive industry is the largest advertiser in the world. In the US alone, the industry spent more than $11 billion in the first 11 months of 2005.”
Online’s strong growth is confirmed in a number of industry studies, with a recent survey from Outsell predicting search engine advertising expenditure to rise by 26% in 2006, resulting in total online marketing spend growing by 19% in 2006 (see Search Engine Adspend To Rise By 26% In 2006).
Elsewhere, paid search is also expected to enjoy a healthy 2006, with a recent report from Piper Jaffray predicting the medium to generate more than $14 billion globally over the coming year, enjoying an increase of 41% from the estimated $10 billion that it made in 2005 (see Paid Search To Reach $14 Billion Worldwide In 2006).
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| US Automotive Online Ad Spending, 2004-2007 (in $ millions) |
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2004 |
2005 |
2006 |
2007 |
| Total online ad spending |
9,600 |
12,900 |
15,600 |
17,800 |
| Consumer-related catergory |
4,700 |
6.579 |
7,800 |
8,900 |
| Automotive category |
893 |
1,447 |
1,950 |
2,670 |
| Source: eMarketer, February 2006 |
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