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USA:Carmakers rev up Web ads

Carmakers rev up Web ads

Spending jumps in effort to target, lure specific groups

By Nick Bunkley / The Detroit News

Big Three marketing honchos listen these days when Mark Elderkin wants to meet.

It didn’t used to be that way. For years Elderkin, who founded in 1994, said he was ignored by the auto industry, which showed little interest in advertising on an Internet site targeted to the gay community.

“The auto companies wouldn’t really talk to me back then,” Elderkin said. “But the timing is right now. I have no problem being invited in to share our knowledge on the gay market.” and its affiliate,, are two of hundreds of widely varying Web sites that automakers have come to embrace as a way to target specific groups of buyers.

In 2003, the world’s 15 largest automakers spent $160.3 million on Internet advertising, a 70 percent increase over just two years earlier, according to a report by TNS Media Intelligence/CMR.

Despite that growth, automakers still spent only 1 percent of their total advertising budgets on the Internet, far less than companies in many other industries.

And auto companies and dealers still rely heavily on television and newspaper advertising to reach their core audience.

Local TV stations and newspapers remain the favored advertising outlets for individual dealerships.

“We spend probably half our ad budget on newspaper and direct mail,” said Bill Demmer, owner of Jack Demmer Ford in Wayne. Some people get annoyed with Internet pop-up ads. That’s why I don’t do them.”

Automakers rely on TV, print media and event sponsorships to enhance their image and create mass awareness of their cars and trucks, said Garret Vreeland, senior vice president for media relations at 24/7 Real Media Inc., a New York marketing agency with several automotive clients.

But, “the Internet is proving to be a very effective vehicle” for selling cars, he said.

All three U.S. automakers said they continue to increase spending on Internet ads.

“They’re moving more money online because they’re seeing the impact that it’s having,” said Kevin Considine, vice president of national sales at, which is owned by several publishing companies, including Gannett Co. Inc. and Knight Ridder, the respective parent companies of The Detroit News and Detroit Free Press.

Statistics show at least two-thirds of new car buyers now use the Internet to shop, so it’s no surprise that automakers spend a large chunk of their Internet advertising budgets on automotive information sites, such as and

GM casts wide net

Car companies are expanding their focus far beyond automotive sites.

GM, although outspent by Toyota, cast a wide net online in 2003 by advertising on 206 different Web sites — more than any other automaker.

“The audience has become more fragmented,” said GM spokeswoman Ryndee Carney. “You have to be everywhere people have their eyeballs in order to get your products in front of them.”

The individual personalities and target audiences of each brand are reflected in the sites where they advertise most.

Toyota Motor Co.p. spent $15.8 million on Yahoo! Sports, while Porsche AG pursued investors at and Volkswagen AG sought good-humored drivers at

Just as sports broadcasts are often filled with automotive commercials, Web sites like and Sports Illustrated’s now get a large percentage of automakers’ online ad money.

So do Web portals such as Yahoo!, AOL and MSN, which the companies have used simultaneously to create virtual advertising “roadblocks.”

Like putting a commercial on every major network or a billboard along all of a city’s highways, the coordinated ads are likely to be seen no matter which portal Web surfers use.

Ford used the tactic last year to promote the launch of its new F-150 pickup and Expedition models.

“Both times we drove so much traffic to our site that we actually had trouble handling the volume,” said Mark Kaline, Ford’s global media manager.

The largest automakers in 2003 began promoting themselves heavily online to audiences that can be difficult to reach.

Toyota and the Big Three now spend millions of dollars each year on sites frequented by minority groups, including, and MSN Latino, as well as so-called lifestyle sites like and Excite Music.

Unlike network TV spots, which are seen by a broad audience, Internet ads can be surgically placed so almost everyone who sees them is in the group being targeted.

“The beauty of online advertising is that you can target very specifically the consumers that you’re trying to attract,” said Bonita Stewart, director of interactive communication at DaimlerChrysler’s Chrysler Group.

DCX courts gays

DaimlerChrysler poured nearly $1 million into, which has 3.5 million active members. The site’s autos section is sponsored by Jeep.

Two reasons make that expense worthwhile, experts say:

* Many companies, including automakers, are still afraid that courting gays will turn off conservative consumers. The only people who see ads placed on are the site’s users.

* Automakers can no longer afford to overlook gays and lesbians, who tend to have more disposable income because most don’t have children. A study commissioned by indicates that 83 percent of the site’s audience plans to buy or lease a new car in the next two years, paying an average of $24,200 to buy or $335 a month to lease.

“Gays and lesbians are extremely brand-loyal,” said PlanetOut’s Elderkin, “and they recognize those advertisers that are making an effort to reach out to them and support them.”

GM also put a lot of money into, about $624,000 in 2003, but said it is still evaluating whether the site will be a priority in the year ahead.

Ford, however, spent only $1,000 and did not advertise on any other gay-oriented sites. Spokeswoman Paige Johnson said the company is focusing on other methods to reach those consumers.

Automakers seen as making a special effort to reach out to minorities — including women, who have historically felt slighted — are much more likely to get their business, said Robert Smith, owner of an advertising agency in Rockford, Ill., that runs ad campaigns for many car dealers.

“Minorities have a separate identity,” Smith said. “The smart companies are those who say, ‘We’re not going to make them go into the mainstream. We’re going to go where they are.’ ”

Attracting auto ads
Leading Web sites for automotive advertising in 2003:
* in millions of dollars Source: TNS Media Intelligence/CMR
1. Yahoo Sports -- $24.0*
2. Kelley Blue Book -- $16.3
3. -- $13.8
4. Yahoo! Autos -- $10.2
5. Autobytel -- $9.6
6. Yahoo! -- $5.1
7. MSN -- $4.1
8. CBS MarketWatch -- $3.3
9. -- $3.0
10. -- $2.9

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