Cars May Not Be Flying Off Lots, But Auto Ad Volume Is Higher Than Ever

The recent hard times in the automotive industry have not dented the industry's display ad volume, according to a new report from campaign management firm MediaMind (until recently known as Eyeblaster).

On the contrary, even as automakers were experiencing declining sales, there has been a significant increase in automotive ad impressions served by MediaMind, and specifically in the average impressions served per advertiser.

Data on online display advertising impressions served by MediaMind from 2007 to 2009 suggest that the global slowdown in automotive sales has actually done well for automotive Display Advertising.

In 2008, the number of total impressions increased and there has been no decline in the average impressions per advertiser. Furthermore, from February 2009, impressions increased significantly, potentially reflecting tighter competition for every customer and plans by governments in Europe and North America to launch new car rebate programs to stimulate the economy.



Last year -- one of the worst years in recent memory for automakers -- online display impressions per advertiser served by MediaMind shot up even further.

This shows that when ad budgets are becoming tight, advertisers are trading offline budgets for more targeted and efficient online campaigns, the report suggests. "For automakers, online display advertising represents a cost-effective way to interact with prospective customers."

On average, the three largest automakers -- General Motors, Ford and Toyota -- spent an estimated $142 on online advertising per car sold in the U.S. in 2009.

Forrester Research estimates that automotive online ad spending in the U.S. will increase exponentially over the next four years.

According to Forrester, online advertising for the automotive vertical is expected to grow by 21.2% annually from 2009 to 2014. Overall, spending is forecast to more than double from $1.5 billion in 2009 to $3.9 billion in 2014.

According to Forrester, in 2010, the automotive industry represents 6.1% of overall online ad spending, and has the sixth-largest presence online.

Meanwhile, a recent global survey by Capgemini, a consultancy, indicated that almost 90% of consumers today use the Internet to research new vehicles -- up from 61% in 2005. According to the survey, dealer and manufacturer Web sites are the two most important sources of information for prospective car buyers.

Capgemini's survey also indicated that the consumer buying cycle has shortened. The survey pointed out that more than two-thirds of respondents start their research two to four months before the purchase, as compared to the traditional buying cycle of six months.

Capgemini attributes the shrinking buying cycle to the availability of more information on the Web, so consumers don't have to go to the showroom to seek information.

What's working for online advertisers? For one, new research by MediaMind, Microsoft Advertising and comScore shows that Dwell Rates -- a key online metric measuring user engagement -- have a significant impact on brand impressions.

Indeed, users who were exposed to campaigns with "high dwell" are three times more likely to search for brand-related keywords compared to users who were exposed to campaigns with "low dwell."

Other known ways to boost conversions include the use of synchronized, or "synched," ads and automatic optimization. Synched ads stand out from the clutter on the page and increase performance by 67%, according to MediaMind, while automatic optimization uses a sophisticated algorithm to deliver the most impactful creative and increases conversion by 79%.

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