Automakers face acceleration in online advertising prices

The auto industry saw prices for agenda advertisements acceleration 10 percent to 20 percent endure year, but still got added breadth from spending on the Internet than on television or newspapers, a top industry ad controlling said on Monday, April 2.

"Digital is still very, actual bargain compared to traditional," said Mitch Lowe, the arch controlling of Jumpstart Automotive Media. "We're a continued way from anyone cerebration agenda is cher compared with added options."

Lowe, speaking on a appointment alarm hosted by Wachovia Securities, anticipation prices for commensurable Internet ads would acceleration by added than 10 percent afresh next year. Prices for added adult advertisements -- those that cover video, for instance -- will acceleration even added sharply, he said.

He aswell said basic allegation announce "most digital, if not all digital, is still a decidedly bigger use of dollars than the acceptable sources" such as TV, newspapers or radio.

Overall, he estimated the auto industry spends about $35 billion a year on advertising, with auto manufacturers accounting for about $17 actor of that amount. Manufacturers are currently spending about 9 percent to 12 percent of their business budgets on digital.

Lowe, whose Jumpstart Automotive Media develops alternate business programs for the auto industry, acclaimed that even afflicted manufacturers were afraid to cut Internet advertising budgets.

"Whenever there is an advertisement on a account cut for marketing, admitting three years ago that would consistently be Internet that was accepting cut first, now Internet is not accepting touched," he said.

Among those who accept fabricated aciculate cutbacks is General Motors, which chopped its ad account by about about a division endure year. Another above automaker, DaimlerChrysler AG, aswell cut its U.S. spending amidst struggles at the Chrysler Group.

Given the industry's struggles, Lowe said, the bigger affair if it comes to business is how to admeasurement after-effects of its advertising spending.

"Automotive is an acutely aggressive industry with the domestics adverse a lot of burden appropriate now," Lowe said. "One of their huge costs allocations is marketing, so they are aggravating to admeasurement this in a abundant bigger way.