Car renters flock to Internet

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Thrifty car rental may not be living up to its name when it comes to online advertising. It directed nearly 25% of its $9.8 million total measured media budget toward online ads last year, and nearly one-third of the total in the first half of this year.

Thrifty isn't alone, as several car rental companies, drawn by what they say is the medium's efficiency, turn to the Internet. Several major players said they're increasing online advertising and marketing, and some are buying offline ads to drive traffic to their web sites.

"The car rental market is an oft-forgotten success story in the online travel industry," said Patrick Thomas, senior Internet analyst at Nielsen/NetRatings.

Results

Gary Paxton, president-CEO of Dollar Thrifty Automotive Group, said the marketer has been spending less on national ads in traditional media and more on the Internet because "we get better results. They're more measurable results."

Dollar Thrifty started a major online push about 18 months ago, said Scott Anderson, senior exec VP-global marketing and franchising. "The Internet caters at this point to the value shopper and our brands are very well suited to that." He said that Dollar Thrifty has seen bigger growth in reservations made online than through offline channels.

Thrifty has been more aggressive online than its sibling, according to TNS Media Intelligence/CMR. Of the $2.9 million Thrifty spent in the first half of 2003, $1 million was dedicated to Internet ads, while in calendar 2002, Thrifty spent $2.5 million of its budget online. Dollar, by contrast, focused its $2.7 million first-half spending on traditional media to advertise its Web site, CMR reported, rather than on online ads.

Thrifty's effort looks to be drawing people to its site. In July, visitors to Thrifty's site grew the most of eight brands studied by Nielsen/NetRatings, up 53% to 836,000 vs. July 2002. By comparison, while the much-larger Hertz Corp. showed more visitors, 1.7 million in July, that site's traffic grew only 2% from July 2002.

Like competitors, Dollar Thrifty's online expenditures include buying key words on major travel sites and search engines. But that form of marketing isn't tracked by CMR.

John Peebles, VP-online marketing at Cendant Corp.'s Avis and Budget, said online ad spending for both brands has risen every year and will increase again in 2004. But Avis and Budget's broadcast budgets are higher, he added.

other players

According to CMR, of the $10 million Avis shelled out for the first half of 2003, nearly $800,000 was spent online, and, in calendar 2002, Avis channeled $2.7 million of its $30 million ad budget to online ads. Budget, meanwhile, dedicated well under $1 million of the $14 million it spent through June 2003 to online ads and just $194,000 in calendar 2002.

Avis and Budget each evenly split their online marketing budgets to banner ads and search term buys, Mr. Peebles said.

National Car Rental laid out $2.5 million of its total $4.9 million ad budget last year online, according to CMR. National's parent ANC Rental Corp., which had been under Chapter 11 bankruptcy protection since 2001, just sold the brand with sibling Alamo to Cerebus Capital Management, New York. None of National's first-half 2003 outlay of under $1 million went toward online ads.

Hertz directed only $1.6 million of its $19 million media outlay in the first six months of 2003 in online ads, according to CMR.

And Enterprise Rent-A-Car spent less than a quarter million of its first-half $28.5 million measured media budget in online ads. Instead, this year it's been focusing on promotions and search-engine marketing on sites such as the Internet Yellow Pages, said Dan Davidson, marketing director. About two months ago, he started using more promotional codes in traditional-media ads and direct mail to drive consumers to its Web site. Mr. Davidson said he can track how well ads in various mediums are working by the promotional codes.

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