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January 7, 2011

Auto Makers Turns Social as Digital Ad Spends Show results

Ford Motor Co. this year will spend 25% of its marketing dollars on digital media, more than twice the amount spent by the industry.

According to J.D. Power, about 9% of spending this year by automakers will be digital, but that will rise to about 12% by 2012 as more companies embrace social networking, online gaming and rich media ads in place of traditional TV and print.

Ford is increasing Relying on Facebook and Twitter to accelerate the word-of-mouth recommendations long familiar to the auto industry and help the blue-oval brand connect with younger and richer people.

Ford’s biggest single bet on digital and social media has been the Fiesta Movement, a program that began in 2008, 18 months before the cars will actually arrive in dealerships. Ford gave 100 European Fiestas to people to drive and live with. The results of the blogging, Facebooking, Youtubing and Tweeting by those people, plus the echoing of those messages by the blogosphere, followers, etc. has been an eye opener.

the Fiesta Movement has created 11 million social networking impressions; five million engagements on social networks (people sharing and receiving); 11,000 videos have been posted; 15,000 Tweets (not including re-tweets), 13,000 photos. And the cars have been driven over one million real-world miles by the 100 participants.

General Motors, had dedicated half of its then-$3B budget in 2008,to one-to-one and digital marketing.Consumers looking to buy new vehicles were among the first to embrace online research to support buying decisions. And while television and print still have a place in product launches and awareness, many dealers now accept that the purchase process starts - and sometimes ends - online.

Spending on search engine marketing in North American is now projected to grow to $25.2 billion in 2011, up significantly (over 6 billion) from the forecast a year ago which was $18.6 billion. As the story repeats – marketers are shifting their advertising from offline advertising to spending more on paid search.

Embattled Toyota Motor (TM) has also tapped the social media and digital spending to manage the public fallout from the biggest vehicle recall in its history.

Car dealers are also one of the most important " links " of auto industry and their spending on the digital media remains significant

Money spent by car dealers on online ads in 2009 : $3 billion
Money spent by car manufacturers online in 2009 : $1.7 billion

Estd. money spent online by car dealers in 2009 : $3.26 billion
Estd. money spent online by car manufacturers in 2009 : $1.94 billion(source:)