Automotive brands have been among the most aggressive–and most willing to experiment–online advertisers in recent years. But in the face of plummeting car sales and with each of the Big 3 seeking a government bailout, that era may be ending.
Though many predict digital media will benefit overall from the auto industry’s growing need to justify every marketing dollar, insiders said automakers’ online budgets are likely to be more focused on reaching a shrinking pool of in-market car buyers and less centered around splashy branding efforts. That could benefit sites like Cars.com and Yahoo Autos, and mean fewer dollars for portals and music and sports sites that had benefited from increased auto spending.
The coming year will be about “driving people down the funnel,” said Susan Thomson, director of media at Chrysler. In recent months, the company had initiated a major branding campaign around the launch of the new Dodge Ram, which included an Election Day roadblock on MSN, Yahoo and AOL. But next year, buys such as that will be “probably less prevalent,” said Thomson.
That is especially likely if the government, by way of bailouts, funds those marketing budgets, theorized eMarketer analyst David Hallerman. “It’s really a question of whether they’ll be on the line to prove the value of their spend,” he said. “Anything that is seen as experimental is likely to be put on the shelf.”
Jay Sampson, senior director, emerging media for Microsoft Advertising, said that through the third quarter of this year, auto brands continued to spend more in emerging segments like in-game advertising and mobile, but fourth quarter has seen “no new dollars.” The good news, he said, is that while “there have been some cuts…mostly what has been bought hasn’t been pulled back.”
As for the in-market category–which in recent years has enjoyed inventory sellouts–Steve Wilhite, president of Jumpstart Automotive Media, said Q4 has been relatively stable. “There have been some cancellations, but some brands have been very aggressive,” he said. “This year has been very uneven.”
One theory is that auto brands, particularly the Big 3, are unable to make media decisions for the coming year until the bailout issue is settled. But that is not the case, said Thomson: “There is no holding pattern. We’re definitely scrutinizing every dollar we spend. But we’re still buying magazines that close in Q1.”
Another theory is that auto brands will dump even more money online, as TV and print dollars are seen as less trackable, and thus, more expendable in ’09. For its part, Chrysler’s digital spend as a percentage of its overall ad budget will be roughly the same in ’09 as this year, said Thomson.