Report: Online Advertising by Automakers Jumps 30 Percent

Automakers eager to use their no-interest financing deals to attract buyers in the face of a slowing economy helped boost online advertising in recent months, according to a report released Tuesday by Nielsen//NetRatings (Nasdaq: NTRT).

The number of automotive ad impressions on the Web jumped more than 30 percent between August and October, while the amount spent on online ads jumped 20 percent, NetRatings found.

"Car manufacturers have been one of the most persistent and creative advertisers this past year," said Allen Weiner, vice president of analytical services at NetRatings. "The automotive sector uses the Web for indirect marketing and branding, to create brand awareness among consumers in order to influence offline purchasing decisions."

Sharp Climb

In October, car manufacturers spent US$2.3 million in online advertising, NetRatings estimates, up 12 percent from the $2 million spent in September and 20 percent above August levels.

The numbers of ads grew even faster. In October, automakers were responsible for 132 million ad impressions on the Web, up 30 percent over August levels and an 18 percent increase over the 112 million ads seen in September.

Favored Medium

Auto makers have been among the most aggressive in responding to the overall slowdown in the economy and, in particular, the drop in consumer confidence following the September 11th terrorist attacks. Many have rolled out zero percent financing deals to attract buyers.

And NetRatings found that many now consider the Web an integral part of their overall advertising approach.

"Automotive manufacturers rallied in September and October to launch integrated advertising campaigns across different media, including television, print, radio and the Internet," said Weiner. "Incorporating the Web into their overall advertising strategy has allowed automotive manufacturers to deliver a single marketing message across all media."

That is important, Weiner said, because many car buyers are beginning their searches for information online. In fact, a recent study by J.D. Power & Associates found more than 60 percent of all new car buyers in the past year had turned to the Web for car-buying information, even though just 7 percent of all new car sales actually took place on the Internet.

Imports Dominate

Toyota (NYSE: TM) ran the most ads, with 25 million impressions viewed by more than 6.3 million people. Nissan (Nasdaq SC: NSANY) was second, with 21 million ads, but a bigger audience reach, with nearly 6.5 million Web surfers seeing its ads. Also in the top five were General Motors, Ford and Mazda.

Import models dominated the top 10 advertisers list, which was rounded out by Daimler Chrysler, Volkswagen, Porsche, Honda and Hyundai.

Further evidence of the potential that car manufacturers see in Web advertising came Monday when Volvo, a division of Ford, announced a 15-month marketing and e-commerce deal with MSN, the portal owned by Microsoft (Nasdaq: MSFT) (Nasdaq: MSFT).