When it comes to auto ads, MySpace continues to garner more overall ad spend: Honda, Chevrolet, Ford, Nissan and Toyota all recently ran ads, with the Honda Fit campaign generating more than 600 million ad impressions in the first quarter of 2009.  A year earlier, Toyota generated over 2.5 billion impressions for its Matrix.  This year, Toyota has allocated more of its ad dollars to Facebook.

As Facebook continues to grow, it will be interesting to track whether the automotive ad spending follows. To receive detailed monthly updates on the auto industry contact Julie Enzweiler

The automotive industry was hit by a Mack truck the second half of 2008 with all-time high gas prices, a shrinking economy and growing consumer fear of making a large purchase.  Advertising spend reflects how the automotive industry reacted to the crisis, highlighting channels that are the most vital to intercepting new vehicle prospects.

The first half of 2008 showed growth in advertising spend over 2007 for TV (+2%) and Internet (+55%) while outdoor, magazine, radio and paper decreased (20%, 18%, 14%, and 4%, respectively).  The second half of 2008 yielded a lower advertising spend over 2007 across all channels.  Radio and paper took the biggest hits with decreases of 42 percent and 40 percent, while Internet exhibited a similar level of spend vs. 2007 with only a 0.5 percent decrease.  Overall automotive advertising spend decreased 8.2 percent from 2007 to 2008, with the Internet being the only channel to witness growth.

Automotive Estimated Ad Spend: 2007 – 2008

Trended on a monthly basis, automotive Internet advertising was outpacing 2007 until October 2008 when the brakes were applied and it dipped below 2007 levels for the first time.  Automotive Internet spending in 2007 represented 4.6 percent of total Internet spend rising to 5.9 percent in 2008.  Acura, Hyundai and Subaru contributed the largest increase in Internet spend from 2007 to 2008 while Mercury, Volvo and Jeep had the largest decrease.  Thus far, Internet spend for 2009 is once again gaining momentum and is forecast to be on par with Q1 07 while still slightly below Q1 08.

Auto Internet Ad Spend As % Of Total Internet Spend

The Internet is proving to be a critical strategic channel for automakers and we anticipate the trend to continue.  Although TV continues to represent roughly three-quarters of total advertising spend, the Internet could likely become the second largest advertising channel by 2010.  The key to successful Internet spend in 2009 will be identifying where your target audience goes online and interjecting yourself at the right moment in the vehicle purchase funnel.

Through July 2008, the Big Three American car manufacturers (GM, Ford, and Chrysler) all showed negative advertising growth over 2007, according to Nielsen Monitor-Plus. Ford and Chrysler each spent 22% less on advertising, while GM dropped its spending by 6%.

Compare that with the relative success of foreign automakers. Honda added the most spending in dollars over 2007 (an extra $71.5 million, or 13%), while Daimler (48%) and Volkswagen (23%) showed the most growth percentage-wise.

But not all foreign automakers saw the same success. Hyundai’s spending dropped by 17%, Nissan’s fell 15%, and Toyota’s numbers remained unchanged. The numbers reflect a 10% dip in ad spending across the entire auto industry through July.

So, for the money that has been spent, where has it gone? Of the total $6 billion spent on car and truck ads, more than $5 billion (83%) were placed in television, while $640 million (11%) were placed in magazines

There were some notable declines in media spending this year. Television is down $323.7 million (-6% compared to last year); budgets for magazines (national, local, and B-to-B) were cut $187.3 million (-23%); and newspapers (national, local, and supplements) dropped $58.8 million (-25%). These significant losses contributed to the overall loss of $640 million, bringing advertising for the automotive category down 11% for the first seven months of this year.

Cable television reported a 5% increase in total spend for the Jan-July time period with $881.9 million in total spend. Another bright star in automotive ad spend is Spanish-language cable television, gaining $1.8 million. Finally, spending in local magazines also climbed, showing the largest increase of 23%.

Despite a continued softening of the economy, several media showed healthy growth in advertising for the first half.  Advertising on Cable TV (+8.1%), Syndication TV (+7.2%), and National Sunday Supplements (+7.2%) saw the largest growth, according to Nielsen.  Spot Radio fared worst among the 19 media categories analyzed by Nielsen (-10.1%). 

Although overall Internet ad spending, when including paid search and online video advertising, was up by 11% during the first half of this year, image-based Internet advertising declined by 6% during the first half of 2008, compared to the same period in 2007.

Among specific product categories, Credit Card Services (+18.95%) and Direct Response Products (+20.48%) showed the strongest ad spending gains, while the Automotive (-.01%), Pharmaceutical (-4.76%), and Motion Picture (-4.64%) categories recorded the largest advertising declines.

The decrease in image-based Internet advertising was driven by a 27% drop in online ad spending by financial services companies, which decreased their spending from $1.5 billion in the first half of 2007 to $1.1 billion during the first two quarters of this year. 

Other industries — entertainment (+47%), automotive (+45%), and consumer goods (+32%) — showed strong increases in image-based online advertising during the first half of 2008.

View the full press release.

View Nielsen Online’s report on first half 2008 online ad spending.

Read coverage of Nielsen’s findings in Wired, Investment News, the Financial Times, Crain’s New York Business, TV Week, Broadcasting & Cable, MediaPost, The Hollywood Reporter, Adweek, and Mediaweek.