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For the past three years, General Motors has been cutting total ad expenditures, going from the number two spender to number four. During th…

For the past three years, General Motors has been cutting total ad expenditures, going from the number two spender to number four. During that same period, the automaker tells AdAge, it has shifted about 25 percent of its roughly $2 billion annual ad spend to digital. In the last year, TNS recently said GM’s online spending was over $212 million — display only, not search or online video — a 79 percent rise over 2006. Looking at where the larger auto sector is heading with regard to the internet, eMarketer predicted last week that auto spending online will be up 24.4 percent through 2012, when it will reach more than $5.61 billion. But as marketers feel increasingly squeezed by the deteriorating economy, some auto analysts wonder whether it will pay off.

Making the sale: Acknowledging the internet’s basic effectiveness, Dan Gorrell, president of consultant AutoStratagem, tells AdAge that a large chunk of new car buyers — 34 percent in the U.S. — don’t use the internet to help them decide on a model. Furthermore, he claims that the internet didn’t figure into the decision-making of the 46 percent of those who bought a Chevrolet last year, which is GM’s highest selling brand. As Wes Brown, VP of Iceology, explains, most car buyers have already settled on what they want to buy, so they’re more likely to ignore search ads or banners. Essentially, until the companies have more confidence in the internet for handling successful branding campaigns — through the use of display over search, for example — car makers will continue to be relatively cautious with their digital marketing dollars.

It’s the economy: The downward pressure on the economy could have an impact on the activity of automakers and their use of online advertising. Last week, Brian Wieser, svp, industry analysis for Interpublic Group’s Magna, told me that the auto brands’ goals frequently have elements which are well supported by the internet, “so it makes for a great supplement to the core TV/brand-based activities they undertake. But the challenge is in identifying how marketers’ goals change in a downturn. Is everyone focused on more ‘lower-funnel’ activity? That could suggest more ads with rebates or more direct response activity online.” At any rate, the health of the online ad economy is far less impacted by autos than it is by the health of what Wieser calls “endemic advertisers (Q1 e-commerce growth decelerated markedly — stay tuned for Q2 on Aug 15)” and small- and mid-sized enterprises who drive a lot of the growth online, particularly in search, as “new business formation is the primary driver there.”

  1. Not only GM, many other car manufacturers are shifting towards web marketing on tech and car blogs as is evident from one of the car blogs run by my friend, he is currently earning in 5 figures from only car blog ads.

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  2. GM has been spending more money on the internet while taking dollars out of traditional media for the past 3 years. How has it done? Well, sales continue to decrease year after year since its internet shift. Maybe they should go back to newspaper and TV or save their money and pay off their debt.

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