June 24, 2011
Some of these numbers may give you reason to make sure you have all your digital ducks in order. And, perhaps some savvy salespeople who new how to speak the digital language. Radio's biggest advertiser is moving advertising dollars to all things digital. The new Borrell report concludes that 32 percent of automotive ad budgets are spent online. That's more than they spend on any other medium. "The heyday of automotive advertising may not exactly be gone for good, but it sure feels like it. Borell reports that auto dealers will spend $22.6 billion online this year. "The pre-Internet era of TV and radio scooping up all the branding dollars and newspapers and magazines collecting the ?Big Sale!? dollars have faded."
The Borrell study says the dollars are going principally to banner advertisements and paid search, with additional non-advertising expenditures paying for website design, inventory database management, lead-generation fees and search engine optimization. "The efficiency of the Internet to meet the car-buying public isn?t the main reason advertising channels have changed. The economy has shaken the basic underpinnings of the entire dealership system. In the past four years, an average of 86 new- and used-car dealerships have closed every week. That?s 17,000 fewer advertisers, with a few thousand more expected this year. What?s worse is that the biggest advertisers in the bunch ? the mega-dealerships created during the consolidations in the 1980s and 1990s ? have been hit hardest. And a new phenomenon ? where slightly-used cars are in higher demand than many new cars ? is rippling through the marketplace."
What?s in store for new- and used-car automotive advertising? Borrell is forecasting an overall increase of 7.2 percent, from $21.1 billion in 2010 to $22.6 billion this year. "Every medium except yellow pages is seeing an increase in auto advertising this year. but the largest dollar increase is expected for online media, up 11 percent this year, from $6.6 billion to $7.3 billion.
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