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By Published on .

Ford motor co. rocked the magazine business this summer by announcing it would pull $75 million to $90 million in advertising from several major publishing groups and move it, in large part, to new media.

Responding to that move, Jan Klug, Ford division marketing communications manager, says "consumers don't consume traditional media like they did five years ago. We need to be where they are. We can't command them to consume media like we want them to do."


Though less dramatic, other automakers are also embracing Internet marketing. General Motors Corp., the leading automotive Internet advertiser in 1998, spent $12.7 million on the medium, up 84%; the No. 2 auto Web spender was American Honda Motor Co., at $6 million, up 107%. Ford spent only $3.36 million in '98, up 259%.

Automakers have the budgets to experiment, are hungry for younger and affluent buyers, and see the Net as a way to demonstrate the technological expertise of their products. They mostly want to keep pace with consumers.

Forty percent of vehicle buyers will use the Web at some point in the buying process this year, up from 25% last year, according to the 1999 New and Used Autoshopper.com study just released by J.D. Power & Associates. The consultancy projects that 65% will use the Web in 2000. Only 2.7% of new car seekers shopping the Web currently purchase through online buying, but that is up from 1.1% last year, notes the study.


Recent months have seen a number of Net-marketing deals, as automakers try to come to grips with the new auto-retail environment created by online car-shopping services.

Toyota Motor Sales USA is selling extended service contracts with Autobytel.com. Autoweb.com and American Isuzu Motors have a one-year integrated marketing deal to promote Isuzu's sport-utility vehicles online. Isuzu and GM (via its BuyPower site) are linked from Microsoft Corp.'s MSN CarPoint site. Ford plans to give auto buyers more choice online on CarPoint.

Automakers are not entirely comfortable with third-party sites, however. Typically, an online site helps customers locate a dealership willing to sell the car they want at a desirable price, then turns them over to a dealership that pays a fee to be included on the site.

Brad Larsen, Toyota's national interactive marketing manager, says despite its Autobytel project, Toyota prefers to handle online auto shopping in-house. Preference aside, the J. D. Power Autoshopper.com study found customers who visited sites in the shopping process (as opposed to recreational players) preferred "independent" third-party sources.

Toyota will use the shop@Toyota section of its corporate site, www.toyota.com, in an attempt to draw customers away from independent online sites, and is planning a national training program for dealership personnel to help them handle Web-based customers.


"Already we have a small percentage of our dealers selling 25%-30% of their entire volume from the Net," says Mr. Larsen.

GM is leading the pack that is collectively ramping up spending in e-commerce. It formed e-GM in August, aimed at coordinating all GM's Web efforts.

Still, automakers need to improve several areas of their e-commerce, says Adam Weiner, auto analyst at Gomez Advisors, Concord, Mass. In particular, "dealers don't tend to be Web-savvy. . .some of their sites are rudimentary."

Automakers must move Web-site visitors "deeper into the transaction. It's one

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