Looking for triggers to a new market

Filed in archive Business Trends on June 1, 2006

If you could shift even a small portion of existing automotive advertising from television to online video, you could explode a $225 Million ad market into something quite huge.

Automakers account for $17 billion (or 25%) of the nation's annual advertising spending. Jan Thompson, VP-marketing of nissan North America called the $17 billion figure "shocking" and told Advertising Age that new-media choices offer opportunities to save money.

Nissan has extended its relationships with Yahoo, MSN and Google, which "we now recognize as networks in their own rights, able to deliver audiences comparable to prime time." Nissan formed a more strategic deal with Yahoo, which Ms. Thompson said reaches 73% of the total online audience and streams more than 50% of all video streamed online, more than any other site.

Ms. Thompson also pointed out these interesting numbers:

Auto advertising soared in the past 20 years by 1,378% while new-vehicle sales increased by only 17%. The industry-wide marketing cost per new vehicle sold increased from $50 to $1,000 in the past two decades. When incentives are added, which she said totaled roughly $51 billion last year, automakers are spending around $4,000 in marketing and incentive costs for each vehicle sold.