Negative Buzz Increases Post Launch of “Cash for Clunkers”

In the two months prior to the official launch of the CARS (Car Allowance Rebate System) program, 10.5 percent of all discussions were positive, while an additional 10.7 percent of the discussion focused on actual intent to purchase a car through the Clunkers program. On the other side of the argument, 7.9 percent of the discussions were negative, containing sentiments like this New York Times blog comment:

“The worst part about this program is that the government is encouraging people to take on more debt. Those clunkers are mostly PAID FOR. Why on earth are we telling U.S. citizens to go and take out another big loan on a depreciating asset? It’s absolutely ridiculous.”

While positive sentiment around the U.S. government’s program outweighed the negative in the weeks prior to the launch of the program, bloggers began to shift their opinions in the week following the official launch, with negative buzz increasing to 10.1 percent of all discussions and conversations that focused on purchase intent fell to 7.1 percent. As the program quickly ran out of money, negative buzz again increased, growing to 11.4 percent while intent to buy continued its downward trajectory, this time falling to 6.1 percent of all CARS discussions online.

CARS.gov Attracts the Wealthy

Online visitors were also heading over to the government Web site created specifically for the program, www.cars.gov. Month-over-month, unique visitors to the site increased 733 percent, from 287,000 unique visitors in June 2009 to 2.4 million in July. Unique visitors between the ages of 35 and 49 were 35 percent more likely than the average Internet user to visit cars.gov. Contrary to what many may assume, visitors to the site also over-indexed among the wealthy. People who make between $100k and $149k were 33 percent more likely to visit the site, and visitors who earned over $150k were 36 percent more likely to visit the site in July.

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The re-designed Forester boosted sales for Subaru, while Hyundai and Kia launched new models appealing to younger drivers.  Existing models, such as the Sorento and Sedona posted strong sales growth (69% and 48%, respectively).  And Lincoln was the only U.S. brand to outperform the market (although sales remained in negative territory on a year-to-year basis).   Foreign automakers benefitted disproportionately from escalating gas prices because consumer perception that their vehicles, especially hybrids and diesel models, are more fuel-efficient.  Hybrids remain an exciting but emerging segment, as consumers take their time investigating the genre.  Meanwhile, consumer interest in the basic economy vehicle was solid when gas prices were high, but dropped sharply once gas prices dropped.

Read more about the positive developments in the auto industry in 2008, as well as consumer behavior with respect to shopping for and buying vehicles in the July edition of Consumer Insight

An analysis of auto-related blog discussions released Tuesday by Nielsen Online found online buzz in October spiked around BMW’s X1 Concept, Lexus’s IS 250C, and Acura’s first V8 engine.

The “Meet the Beckers” series and content from the Lexus L-Studio site were the top consumer-cited videos for October.

Among more sober blog discussions, buzz about a potential GM/Chrysler merger was most prevalent. Consumers speculated about which models might be discontinued and the prospect of job cuts. Many also voiced opposition to funding the merger with a government loan.

In contrast, Porsche’s increased stake in Volkswagen generated far less online buzz. Most consumers who blogged about that merger described it as a good business move.

View the complete “Automotive Industry Overview” for October 2008.

Stay tuned on Nielsen Wire for monthly installments of Nielsen Online’s monthly “Automotive Industry Overview” of online, consumer-driven automotive discussions.

An analysis of GM-related online buzz between September 1 and October 24, 2008 found that consumer chatter on Internet message boards and blogs has focused on how Detroit would change if GM and Chrysler joined forces — and which vehicles might survive the merger.

GM’s forthcoming electric car, the Chevy Volt, also drove a significant portion of GM’s online buzz during the last two months — as did discussions of plant closures, the United Autoworkers union, and the company’s 100th anniversary.

View Nielsen’s proprietary Brand Association Map (BAM) for GM, which charts the attributes most closely associated with the company in online discussions.  The BAM analysis provides an unaided, unsolicited, real-time barometer of consumer perceptions of and attitudes toward a topic discussed online.

What are your thoughts on a GM-Chrysler merger?  Submit your comments below.

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.