Automakers Moving Spending Online: Huge Opportunity For Web Video

Ad spending by U.S. automakers, which are expecting a down sales year, is going to be flat in 2008–but a greater portion will be allocated to the Internet, says Kelsey Group. This is not news, but the TNS Media Intelligence chart with Adage’s report shows that there is a lot of upside for online media if the predicted shift occurs.

Internet advertising remains tiny for the automakers, which poured more than $10.1 billion into broadcast and cable TV in 2006, compared to a few hundred million on the Internet. Automakers put 5% of their ad budgets into online in 2007 (approximately $500 million), according to Kelsey–a percentage that Kelsey expects will climb to 13% in 2013.

The prolonged TV writer’s strike will likely to lead to continued ratings shortfalls, which could accelerate the move of ad spending to the web. The problem for car companies, who like to advertise via full-motion video, is that there isn’t enough high quality video web inventory to go around. As Deep Focus CEO Ian Schafer points out: “The web will benefit, but the web has to figure out how to take that money.”

Still, the auto-spending migration represents a huge opportunity for web media firms. It would also be a great opportunity for the networks, who would be able to keep their car-company customers–if only they would hurry up and figure out how to put all their video content online.

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