Auto Ad Spending Sags in Q1 | Adweek
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Auto Ad Spending Sags in Q1

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NEW YORK Ad spending for the ailing car industry fell more than 10 percent in the first quarter, according to both Nielsen Monitor-Plus and TNS.

Spending dropped 12 percent to slightly more than $2 billion, per Nielsen, while TNS says the drop was just a tad more, 13 percent to about $3.2 billion.

Ford and Chrysler had the sharpest spending drops. Chrysler was down 47 percent, per Nielsen, and 42 percent, according to TNS, while Ford was down about 30 percent, according to both ad trackers.

But those numbers don't provide the whole picture. The Nielsen figures don't include online spending, while the TNS Internet data covers display ads, but not search. And the Internet -- and search in particular -- are big growth areas for auto spending.

According to a report issued this week by eMarketer, online ad spending by the auto companies will increase this year almost 22 percent to $3 billion. The research firm predicts that $5.6 billion in car spending will shift to the Web by 2012 as more consumers spend time online researching vehicle purchases.

That said, the car industry is having its worst year in a decade, with projections that total car sales will be down by 1 million or more units in 2008 as gas prices soar and demand shifts from gas guzzling SUVs to smaller, more fuel-efficient models.

"What we're looking at is a combination of belt tightening by the auto industry with some reallocation of spending to unmeasured media," said Brad Adgate, svp, research at Horizon Media.

Daniel Young, evp, Havas Medi, agreed: "The only way to keep up in a market like this is to keep your products in the view of any possible consumers that are out there. I would suspect, even though we've seen some dramatic reductions in the numbers for advertising, that it's more a shift and less a reduction." But that could change depending on how big the auto company losses grow as the year progresses, said Young: "What we don't see so transparently is the financial hit that companies are taking with the losses on the bigger vehicles. It's enormous right now."

Adweek is a unit of the Nielsen Co.