Borrell Survey Sees Auto Ads Moving Online
June 24, 2011 at 3:56 AM (PT)
YESTERDAY (NET NEWS 6/23), ALL ACCESS reported good news for radio in a new report from MOODY'S INVESTORS SERVICE that sees political advertising "all but certain" to break records. The paper, "U.S. Broadcasters Get Ready for Record-Breaking Political Ad Spending in 2012," calls for political ad revenue to grow between 9 and 18% in 2012 over 2010 levels.
TODAY, another report has bad news, as BORRELL ASSOCIATES sees advertising from car makers and car dealers shifting to online. BORRELL analyst KIP CASSINO notes "The business is going through major changes that will ultimately mean less advertising from the industry. But despite the shrinkage -- since 2007 and the recession that followed, an average of 86 new- and used-car dealerships have closed every week, leaving roughly 17,000 fewer advertisers media companies can rely on -- auto ads will still be strong enough to influence markets, particularly around local, social media and mobile," reports PAIDCONTENT.ORG.
* Over $7.3 billion will be advertising vehicles for sale on the web this year -- an 11% gain from 2010. Since 2009, when online surpassed newspapers, it has been the top marketing channel for auto advertisers as they try to meet buyers conducting price-and-features research at the lower end of the buying funnel.
* Newspapers have seen their print classified advertising automotive dollars sink 75% to $1.2 billion in 2010 from $4.8 billion in 2001. Meanwhile, online media have absorbed much of the fall-out and now receive the lion's share.
* Dealers are earmarking 32% of their budgets for online media buys. About 36% of dealers claim to be familiar with mobile advertising opportunities, twice the rate of other local advertisers.
Local media companies who serve dealerships with everything from listings, photos, leads, website development, keyword buys and search engine optimization will be the ones to rake in the bulk of local auto ad spending.
* Among the biggest names expected to get bigger as a result of increasing online auto ad spending include AUTOTRADER.COM, with revenues of $720 million last year; daily newspapers (including CARS.COM), with online automotive revenues of about $525 million; and local TV stations, with revenues of $300 million. Other competitors are VEHIX, AUTOBYTEL, DEALER.COM, SOURCE INTERLINK MEDIA (AUTOMOTIVE.COM and MOTORTREND.COM), eBAY MOTORS and YAHOO AUTOS.
* Only 13% of auto advertisers said they did not plan to buy online banners or listings from any local media company this year. That percentage is considerably smaller than for local retailers, health care professionals and real estate agents, who shun local sites at a higher rate.