Automakers embrace Net ads

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When Toyota Motor Sales USA launched its second-generation Toyota Sienna minivan earlier this year, it tried a new strategy. Instead of waiting to start online ads until after the first TV flight, the marketer's online ads broke the first week of April, prior to the TV effort on third-party auto, parenting, educational, family and financial sites, said Mark Simmons, Toyota's national manager of advertising strategy and media.

That move helped spike daily traffic to toyota.com by 75% in the first two weeks of April compared with the previous two weeks and gave Sienna's launch a "really big boost," he said.

Automakers like Toyota are increasingly advertising online to boost awareness and consideration. While still a pittance compared with the $16 billion in automotive measured media spending last year as tracked by TNS Media Intelligence/CMR, online spending in the category has risen every year for seven consecutive years. Carmakers spent nearly $196 million for online ads last year vs. $176 million in 2001, according to the tracking service, and $43 million in the first quarter of 2003.

The phenomenon has benefited Microsoft Corp.'s MSN Internet network, which has seen its ad revenue grow more than 40% this year, according to Stephen Sirich, director of MSN's automotive unit. He said deals like MSN's with Toyota's Lexus and Volvo Cars of North America have contributed significantly to the portal's growth.

MSN's auto channel racked up $25 million in carmakers' ad dollars in 2002, three times more than any other Web destination, a spokesman said. The spokesman said Chrysler Group also dramatically increased its online advertising with MSN's auto unit to launch the Chrysler Pacifica in June, an add-on to an existing three-year deal.

consumer familiarity

MSN launched lexus.msn.com in February, targeting affluent consumers and offering travel and financial content. Mr. Sirich said the program aims to help Lexus increase consumer familiarity with its brand and models.

Volvo teamed up with MSN (volvo.msn.com) to sponsor the Volvo Digital Garage and Virtual Showroom, where visitors can see the marketer's new models, peruse features, obtain price quotes or download an owners' manual. The site also offers a chance for consumers to enter to win a trip to the Bertil Roos race and safety-driving school in Pennsylvania. Volvo captures consumer information via the contest.

In addition, Volvo advertises in other parts of MSN to drive people to its area, said Phil Bienert, manager-customer relationship management and e-business at the marketer. While the carmaker has worked with MSN on a long-term basis, it has worked with other portals, including Yahoo! and AOL Time Warner's America Online since 2000. Longer-term relationships allow both the portal and the marketer the benefit of planning 12 to 18 months in advance. The deals are tactical and provide better tracking vs. short-term online ad programs, said Mr. Bienert, who added that Volvo's regional-dealer ad groups are now asking for online ads, which would be done by its national shop Havas' Euro RSCG MVBMS, New York.

A new online tactic is to buy all the ad space on portals with third-party auto sites, said Mr. Bienert. It's a defensive move to keep competitive ads out of the space. Until a year or so ago, it was "easier to target competitors that weren't as aggressive" about protecting their pages, he said.

`Global extremes'

Toyota spent the most of any automaker on Web ads for a single model last year for the launch of its newest-generation 4Runner SUV. According to CMR, the vehicle was backed with $4.4 million in online advertising. The total included a presenting sponsorship of Yahoo!'s Global Extremes that was integrated with Toyota's promotion offering a trip to climb Mt. Everest in May. Toyota's 4Runner TV and print ads used Sir Edmund Hillary, the first man to reach the mountain 's summit 50 years ago.

Last month, Chrysler introduced a service for its Dodge, Jeep and Chrysler dealers providing ad materials online that can be tailored for individual Dodge, Jeep and Chrysler dealers. Available through the automaker's internal DealerConnect portal, the "Marketing Planner" offers custom newspaper ads, TV footage, radio scripts, direct mail and billboards by Omnicom Group's BBDO Worldwide, Troy, Mich. The goal is to save money and reduce ad production time from weeks to hours.

The service, said John Fisher, senior manager-direct marketing, eliminates individual dealer usage of different ad agencies and offers a uniform look for ads. Chrysler first offered the planner in a notebook about eight years ago and later on a CD.

There's a likely reason Web ad spending trails other media in the category: Auto marketers don't believe Web ads provide the biggest bang for the buck. In a recent survey, when 50 senior auto marketing executives were asked which marketing element provides the greatest return on investment, Web ads ranked last. Traditional media advertising was first, according to the report released last month from event-marketing firm George P. Johnson Co. and the Meeting Professionals International's research foundation.

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