2009 was a year of struggle, bailout and bankruptcy among automotive manufacturers which spurred the Cash for Clunkers government program; only to end the year with double digit gains in volume sales Dec ’09 vs. Dec 08 for the likes of Ford (+37%), Toyota (+34%), Honda (+28%), Nissan (+19%) and BMW (+11%.) 1 It appears that the automotive industry is poised for a sustained rebound in 2010, of which the Hispanic consumer plays a key role today and the near future.

The automotive category is ranked 8 th among top line categories by display ad impressions during Oct ’09 spending $35,469,000 on 8,983,015 display ad impressions reaching 83.4% of US Total Internet. 2

Here are the top 10 automotive manufacturer category advertisers ranked by Display Advertising Impressions, Oct ’09 according to comScore.

Chart #1

Chevrolet commands the highest share within category with 28.1% share, reaching 61% of US Total Internet Users with their display advertisement. 3 Most of the manufacturers with volume sales gains from the first paragraph are top advertisers found in Chart #1.

Yet Chevrolet’s web site does not lead by Hispanic composition among the advertisers listed in Chart #1. US Total Internet is comprised of 11.3% Hispanic visitor composition. Infiniti (as InfinitiUSA.com) Hispanic composition of site visitors is 12.2%, while Chevrolet’s is 11.1% - the same as US Total Internet, while Lexus’ audience is comprised of only 3.5% Hispanic composition. It is critical for marketers to reach Hispanics due to population projections. The non-Hispanic white population is increasing 1% in population while the Hispanic population is increasing by 167% in population between today and 2050 (Smart Marketer November '09 ). Some age ranges actually decrease among non-Hispanic whites (Under 5 – 29 years old, 40 – 64 years old) by 2050.

Marketers beware. It is not necessary to wait until 2050 to observe these seismic shifts in population - minority majority is happening now. Highlights from The New York Times, citing the latest figures from the US Census:

• Since 2000, half the states registered a decline in the number of people younger than 18.
• Michigan’s under-18 population decreased by 246,000, or 9.5 percent, surpassed in raw numbers only by New York’s loss of 266,000, or 5.7 percent.
• Higher birthrates among immigrants and the migration of younger job-seekers mean that in seven states, non-Hispanic whites now constitute a minority of people under 18. Those states are Arizona, California, Hawaii, Maryland, Nevada, New Mexico and Texas. 4

That said, percent Hispanic composition of site visitors may indeed be the new KPI of the digital advertising industry, both as a campaign effectiveness measurement for advertisers and as a guide for campaign placement by choosing sites with high % Hispanic composition of site visitors. The Terra – Telefonica Property is ranked first across Top 1000 Ad Supported Properties by % Hispanic composition of site visitors with 57% Hispanic composition, while our flagship Terra.com US Hispanic portal contains 75.1% Hispanic composition of site visitors, Dec ‘09. 5

Hispanic Internet Users exhibit a desirable target for automotive manufacturers beyond population projections:

• 10.3% of Hispanics plan to buy a new vehicle within the next 6 months, 53% more likely to be so vs. US Total Internet (153 index)
• Specifically, Hispanics represent 11.4% (172 index) of all new vehicle purchases conducted offline within the last 6 months, and 9.9% (149 index) of all new vehicle purchases conducted online within the last 6 months. 6

Perhaps one reason why Hispanics are more apt to acquire new vehicles is due to their buying power, forecasted to reach $1,386.2 billion by 2013. 7

As far as which automotive type may suits their fancy, there is much buzz generated from the North American International Auto Show 2010 held in Detroit concerning electric cars. The Chevy Volt is due to go on sale late this summer and is the first mass produced electric plug-in with a backup gasoline engine. The price of the Chevy Volt is below $40,000 and the $7,500 tax credit should help. BYD’s E6, their all electric car with 200 mile range will be offered in the US late this year. Other electric car contenders include the Hyundai Blue Will and the Nissan Leaf.

Once again, Hispanics are in tune with the latest trends, in this case the green revolution as it applies to automobiles. Hispanics account for 10.4% of all Hybrid car owners, of which 4.8% of Hispanics own a Hybrid being 57% more likely to be so vs. US Total Internet (157 index.)

Terra.com’s global-warming section, Calentamiento Global alongside of course the obvious contextual choice of our Autos channel has housed many successful automotive campaigns. Terra Client Norms based on Dynamic Logic research studies fielded on Terra among automotive campaigns indicate a statistically significant lift across several key metrics: Online Ad Awareness (+8.2 at 99.9% sig), Message Association (+7.3 at 99.9% sig), and Purchase Intent (+4 at 99.7% sig) N = 7 studies and n = 5,980 respondents.

Chart #2

Be a Smart Marketer. Automotive advertisers are clearly using display advertising to build their brands within the online Hispanic community effectively.

Terra would like to congratulate Ford for winning the North American Car and Truck of the Year awards at the North American International Auto Show for the 2010 Ford Fusion Hybrid and the 2010 Ford Transit Connect, respectively.

1.) Source for Volume Sales Gains Dec ’09 vs YA. Neff, John. By the Numbers - Dec 2009: Strong Finish Edition. Autoblog.com. Jan 5, ‘10

2.) comScore. Ad Metrix Advertiser. Oct ‘09

3.) comScore. Ad Metrix Advertiser. Oct ‘09

4.) Roberts, Sam. Half of States See Dip in Under-18 Population. The New York Times. Jan 8th, 2010

5.) comScore. Key Measures. Dec ‘09

6.) comScore. Plan Metrix Consumer Target Profile Report. Nov ’09. Analysis performed by Terra USA Research.

7.) eMarketer. US Buying Power, by Race/Ethnicity, 1990, 2000, 2008 & 2013 (billions). Selig Center for Economic Growth, Terry College of Business, The University of Georgia, “The Multicultural Economy 2008”. Jan ‘09

By Natasha Funk

Published:  January 2010