26When compared with the $8.5 billion worth of traditional media buys they made last year, automakers spent what amounted to petty cash on Internet advertising in the USA. But conventional media representatives should start worrying because automotive Internet advertising spending is growing fast.
Automakers' budgets for Internet advertising in the USA increased from $9 million in 1996 to $72 million last year, according to Competitive Media Reporting. This year, Internet advertising spending by automakers is expected to top $100 million. During the past four years, Competitive Media Reporting found automakers' Internet advertising spending overtook what they spent on advertising on network radio and in Sunday magazines. And this year, automakers probably will spend more on Internet advertising than the $92 million they spent last year pitching their products on national spot radio and $80 million on outdoor advertising.
'Instead of giving 30-second commercials that interrupt (consumers) at some point, the web is something that they choose to do,' says Deborah Wahl, Lincoln Mercury marketing communications manager. 'It allows us to define a totally different experience and have longer interactive times with our consumers and our prospects.'
General Motors, Toyota and American Honda accounted for 54 percent of last year's spending on the Internet (see table above). But Internet spending has grown dramatically for most automakers doing business in the USA - Volkswagen is up more than 1,000 percent from 1998 to 1999 and Suzuki is up nearly 700 percent, for example. Only Land Rover, Mitsubishi and Subaru spent less on the Internet during that two-year period.
Automakers use their Internet advertisements on other websites to drive traffic to their websites, where they have more information about their brands than they could convey in a TV commercial or print advertisement.
'It's all about servicing the customer,' says Brad Larsen, national interactive communications manager for Toyota. 'The Internet provides the ability to give the kind of information that you couldn't give before.'
'By 2003, 60 percent of car buyers will look at the Internet before they buy a car,' says Gordon Wangers, managing partner of Automotive Marketing Consultants Inc., a Los Angeles automotive consulting firm that ranks automakers' websites. 'More and more, (car buyers) are using the Internet to narrow down their shopping lists, so it's imperative that automakers have very good websites.'
Indeed, automakers are moving to make their websites easier to use. Most manufacturers' sites are equipped to let visitors send them e-mail.
But Geno Effler, who oversees Kia's Internet operation, warns that one problem with the Internet is trying to do too much.
'If you offer too much and don't have the resources or the structure to fulfill the visitors' needs, such as answering e-mails,' he says, 'all you're going to do is irritate owners and potential customers.'
Still, Toyota's Larsen says, 'the Internet is moving so fast that you don't look out on the horizon in terms of what you can do or what's coming for more than six months.'
By that ruler, car buyers will be able to talk to live personal consultants on the Internet by the end of the year, and there is no telling what the Internet will offer by the first quarter of next year.
And that will be something else about the Internet that conventional media cannot match.