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Be a Smart Marketer – the Online Automotive Category |
As spring break is currently in full swing, and families are busy preparing for their summer road trips, it is a good moment to focus on the #1 US advertising industry – automotive – responsible for $21 billion in overall advertising spending during 2005: of which, $1.42 billion was spent in online advertising by automotive companies during 2005, jumping to $2.54 billion in 2007 and projected to $4.2 billion by 2010. 1 This brief inquiry focuses on automotive online, the nuances of portal advertising, as well as how US Hispanics fare in the mix.
| Offline Habits Reflected Online, and Vice Versa |
Summer travel plans exhibit a cyclical nature, as proven by the car rental site category visitation increasing 9% from June 2006 - July 2006, to 7.1 million unique visitors during July 2006. 2 Most likely, a similar trend will occur this summer.
Chart 1:
According to comScore Media Metrix, US Hispanics exhibit greater reach within the Automotive Category than General Market by a hair's length, 31.4% versus 31.1%, respectively, during January 2007.
Ethnicity aside, the Internet plays a critical part in the car buying process and is the preferred medium. Consider these facts: 1) 30% of vehicle shoppers are not brand loyal; 2) 35% of first-time car buyers believe that the Internet is an important informational tool in car research, only 8.2% choose television; 3) 49% of consumers ranked advertising on related web sites as the promotional media likely to be influential when choosing a vehicle. 3
Advertisers have taken note and shifted ad dollars online, as Internet advertising among US automotive dealerships increased 10% from 1995 – 2005, while offline alternatives suffered: 21% decrease in newspapers to 33% in 2005, and only a 4% increase in television to 20% in 2005. 4 The automotive category also declined in magazine advertising by 11% from 2005 – 2006 to $2.05 billion in 2006. 5
| Automotive Online Advertising Drill Down – Portals Shine |
Now that the medium, cyclical nature and audience have been established, there are several interesting headlines regarding online automotive advertising to take note.
The 80/20 rule is now 80/3, as GM, Ford, and Daimler Chrysler are the top 3 advertisers on automotive websites, garnering 81.3% of total impressions during October 9 – 15, 2006. 6 Yet Hyundai, BMW, and Dodge owners/leasers over index as having purchased a vehicle online in the past year (247, 203, 156 consumer index, respectively). 7
While these studies are noteworthy, a twist is thrown by in-market respondents who voted web sites, but not automobile web sites, are the best source for automotive information by 32% of respondents, while automobile company web sites ranked 4 th at 9%.
Chart 2:
Perhaps in-market car buyers prefer the depth of automotive coverage found on portals, or prefer to read/participate in user generated auto related communities, automotive company web sites as such, surprisingly, are not ranked highly for in-market auto buyers.
Happily, most portals have had their own autos channel for a while now, as it is naturally a major category of high relevance and interest to their audiences. Terra’s Autos channel (http://www.terra.com/autos/) visitors are constantly greeted with exclusive content such as Ferrari’s 60 th Anniversary Celebration. Fredy Wiles, Terra’s Autos channel producer, wrote a lengthy article covering the event in Homestead, FL (http://www.terra.com/autos/articulo/html/aut6194.htm), including slideshows. Watch Fredy actually driving Ferrari’s on Terra TV’s Auto Show! (http://php.terra.com/terratv/video.php?video=http://www.terra.com/videos/autos/show_ferrari2007)
As for the ad unit of choice for automotive campaigns, consider video. Based on 243 automotive campaigns measured by Dynamic Logic, online auto campaigns generated a 7.4 point increase in Online Ad Awareness. Previous research has also shown that online video ads can be extremely effective in generating brand impact, including automotive brands. 8 While the data are based on a small number of campaigns (N=14 campaigns), initial research suggests that auto campaigns using online video can have a greater impact on brand metrics, generating 15.7 points in Online Ad Awareness and a 5.2 increase in Purchase Intent. Source: MarketNorms data through Q4/2006 (A 5.2 increase in purchase intent means that 52 out of every 1,000 people exposed to online advertising report being likely or very likely to purchase who otherwise were not.)
Aside from providing a fun, newsworthy experience for its viewers, portals also leverage their full range of content from autos to news to bring the best of all perspectives to the auto enthusiast. Integrated, cross platform opportunities, such as campaigns in both Cosmoenespanol.com and the magazine, are also a great way for auto advertisers to reach their target audience. Terra’s Autos behavioral targeting segment is yet another option, which follows auto enthusiasts throughout their entire visit on Terra.com. Portals may also offer the opportunity for custom created specials, as well as brand tracking research studies. In short, portals have a large and growing arsenal of options available to automotive advertisers, as in-market auto shoppers are clearly receptive.
While the new car buyer in general market is flat, US Hispanics are the driving catalyst among car buyers. Of the 26.1 million adults who plan to buy a vehicle during the coming year, 18.1%, or 4.7 million are Hispanic. 9 Indeed, 30% of Terra’s Autos channel visitors have already bought a car within the last 6 months, and 51% state that they would purchase a vehicle online. 10 US Hispanics, by definition, need cars as new arrivals since 70% of US Hispanics are foreign born.
Additionally, as Hispanics are the ethnic minority with the highest buying power, reaching over $800 billion this year, they have the means to spend - which include luxury. Among the 4.5 million adults who plan to spend $30,000 or more on their next vehicle, 17.4% are Hispanic. 11
Among affluent Hispanics online, defined as HHI $50k+:
- 10% own a large luxury vehicle
- 14% have a recent car make (2005 or 2006)
- 44% purchased their car, new
- 15% are very likely to purchase a car within the next 6 months. 12
At the end of the day, it is flexible creative execution and placement, coupled with a savvy online audience that is capturing the attention of both audience and advertisers in the automotive category. Be a Smart Marketer, consider the myriad of options available from a content based portal for automotive campaigns, where visitors naturally gravitate towards the experience provided by exclusive content, and advertisers enjoy excellent results.
1.) Automotive Online: The Race Is On. eMarketer. March 2007
2.) comScore Media Metrix, Inside the Ratings, July 2006
3.)
Automotive Online: Gearing Up for Greater Spending. eMarketer. March 2006
4.) Advertising Spending by US Automotive Dealerships, by Media, 1995 & 2005 (% of total spending). NADA, eMarketer. May 2006
5.) Leading Magazine Advertising Categories in the US, by Revenues, 2005 & 2006. PIB, eMarketer. Jan. 2007
6.) Top 20 US Advertisers on Automotive Web Sites, Ranked by Impressions, Oct 9 – 15, 2006. NNR Ad Relevance, Center for Media Research, eMarketer. Nov 2006
7.) US Adult Automobile Owners/Leasers Who Purchased a Vehicle Online in the Past Year. Scarborough Research, RAB, eMarketer. Feb 2007
8.) http://www.dynamiclogic.com/na/research/btc/beyond_the_click_nov2006.html
9.) Hispanic Adults are Disproportionately Higher Automotive Buyers. Center for Media Research. Sep 2005
10.) Dynamic Logic Autos Channel Study. March 2007
11.) Hispanic Adults are Disproportionately Higher Automotive Buyers. Center for Media Research. Sep 2005
12.) comScore Media Metrix. Plan Metrix. Summer 2006 |
