Auto Ad Spending Up, But Only in Digital

(MoneyWatch)  eMarketer has a new report out today, showing that auto ad spend, while declining overall, is up for digital. From the report:

Automakers have traditionally been the biggest advertisers in the country. General Motors is the fourth-largest advertiser in the US, and the company spent $535 million in Q1 2008, according to TNS data cited in a July 2008 Media Life article. GM spent $2.1 billion on ads last year, which was the third year in a row of lower ad spending for the company.

Last year total auto ad spending was down 10.8%, to $12.3 billion, according to Nielsen Monitor-Plus data cited in the Detroit Free Press article.

If there is a bright spot in auto ad spending, it is online. Internet spending was up 57.9% last year, to $441.6 million.

Looking at the ad spend of General Motors two things leap out. One, as I've mentioned before, the company is scaling back its advertising in every area except online, which in 2007 was up 79 percent over 2006. This is to be expected, as the auto manufacturer pledged to shift half of its ad spend to online by 2011. Two, online in Q1 2008 is still only nine percent of overall ad spend. To put it in other terms, it's a almost seven times smaller than the amount GM spent on television in the same period.

The point here is that online is a small but rapidly growing market. I firmly believe that over online ad spend will surpass television within a decade at the most -- but those who still have their claws in traditional media may be better off, at least in the short run. That means Interpublic, which counts GM as its third-largest client and is just now begining to shift towards online, may fare better than fellow-GM benefactor Publicis, which has made a number of aggressive moves and acquisitions in the direction of online.