Wachovia Conference Call: Dismal Stats on Auto Ads

By: Jennifer Saba

Automotive advertising’s decline is expected to continue, according to a conference call hosted today by Wachovia Securities Analyst John Janedis on the state of the auto ad market.

On the line was Mitch Lowe, CEO of Jumpstart Automotive Media, a digital ad network focused on the automotive industry. (Jumpstart works with manufacturers, dealers, dealer associations, and after-market services and reaches about 5 million auto buyers per month.)

Lowe responded to a question about the state of the newspaper industry with some dismal statistics. About nine years ago, the data showed that roughly 62% of dealer ad dollars were allocated to newspapers. The migration away from newspapers continued slowly until this year when, Lowe said, that percentage dropped from 58% to about 30%.

?Consumers are leaving newspapers,? he commented. ?And dealers are waking up to it.?

Lowe said that auto advertisers are looking for four themes when placing their ad dollars: ads that are visual, interactive, measurable, and targeted beyond psychographic and demographic characteristics.

Although Lowe heads a company dedicated to interactive advertising, it’s hard to deny that the Internet is a very useful tool for finding and tracking potential auto buyers.

That?s because auto buyers are going elsewhere to make their decisions, Lowe explained, on sites that are provide deep information relevant to buying the process, something that newspapers lack.

?Unfortunately for newspapers, it?s a melting ice cube all the way around,? he said. ?Consumers can get much better information on Web sites that are auto-specific. … I haven?t seen a large newspaper company build that out.”

Lowe also said that while behavioral targeting has been around for some time, auto advertisers are beginning to look at following the consumer off an auto site to a general Web site.

Since auto manufacturers have also been struggling, there is going to be even more accountability required when spending marketing dollars but the Internet will likely be spared. ?At the beginning of 2005, General Motors had a budget cut,? Lowe said. ?In the past, the Internet would have been the first to go. Now it wasn?t touched at all.?

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