Auto Ad Outlook Deserves Nuanced View
So, what can we really expect from online auto advertising during the recession? The outlook isn't exactly crystal clear
So, what can we really expect from online auto advertising during the recession? The outlook isn't exactly crystal clear
So, what can we really expect from online auto advertising during the recession? The outlook isn’t exactly crystal clear. Take a recent Wall Street Journal story which predicts hard times for auto advertising online.
“Auto Web sites have commanded some of the highest ad rates online, and they typically have sold out a year in advance,” wrote Emily Steel in a story published Tuesday. “Now, those online ad dollars appear to be leveling off as the auto industry slashes costs and prunes its brands. At the same time, traffic is on the wane, as consumers put their car-buying plans on hold and curtail visits to auto-research sites like Edmunds.com, Yahoo’s auto section and KBB.com.”
The story notes that Forrester Research “expects a big decline in spending on display ads next year,” and “visits to auto-research sites were down 2% in October from a year earlier,” with steeper traffic decline for some sites.
“Now, many of the sites haven’t been able to deliver those viewers for ads they have already sold, and are scurrying to find ways to compensate advertisers,” continued the story.
There’s no question that auto advertisers have been spending less with some sites that are accustomed to their typically-reliable ad revenue stream. For instance, in Q3, Yahoo cited auto (along with finance, travel, and retail) as the hardest hit ad verticals for that quarter.
However, some think there’s room for a nuanced outlook. “This week, a new article by Steel noted the ‘tapering off’ of ad spending on auto sites – another bold statement (although the article itself was measured and balanced),” wrote Kelsey Group’s Peter Krasilovsky on the local research firm’s blog.
He asked AutoTrader about the prognostication. The company expects its 2009 revenues to be “solid.” The company told him, “Because automotive media sites such as AutoTrader.com, Edmunds.com and Cars.com cater specifically to in-market car shoppers, we expect that there will be continued growth in spending for advertising and marketing through these sites – something that will be happening at the expense of traditional media.”
And let’s not forget: auto advertisers don’t advertise strictly on auto sites. They buy through behavioral ad networks, and also do lots of search advertising. I spoke with Ben Boles, director of digital media for Damson Automotive Group, in October, and he told me his digital ad spending would not be scaled down as a result of the recession.
“Now, rather than necessarily innovating in what we’re doing, we are just simply looking for efficiencies that online affords….We’re doing it as function of survival,” he said.
Plus, big auto brands are recognizing the Web as a place to spend money for things other than just lead gen. As noted by Steel in a previous WSJ story, “Ford Motor, General Motors and Chrysler have launched campaigns on several Web sites, including Google and its YouTube video site, various blogs, Facebook and the social-messaging site Twitter, trying to make their case for a bailout as quickly and widely as possible — on the cheap.”
I wrote earlier this week about the search marketing components of bailout-related campaigns. And one thing that Ford made clear to me was it’s starting to see Web advertising as beneficial for branding, and reaching people before that almost-ready-to-buy phase.
“Historically we were focused on the end of the buying process,” Ford Digital Marketing Manager Scott Kelly told me. “In the past year we’ve been more focused on changing consideration up front in the buying process, and search and online tools can help us do that.”