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

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.

Hyundai Brand and Assurance Source Breakdown

For more information on the Automotive Industry Overview, contact Larry Black and Julie Enzweiler

New advertisers for the 2009 Awards and how many minutes they ran are listed in the chart below. Hyundai, the top advertiser, ran several general ads, as well as three 30-second spots for its Genesis brand. Sprint Nextel promoted its wireless and web access services. Bristol-Myers Squibb ran one ad for Orencia, a rheumatoid arthritis drug. National Amusements had one ad for DreamWorks Pictures’ Soloist movie, and Techtronic placed a commercial for Hoover vacuum cleaners.

In 2008, movies nominated for Best Picture, Best Actor, Best Actress, and Best Director spent more than $118.8 million (all figures quoted exclude internet and outdoor advertising) on advertising in the United States. Although neither Brad nor Angelina won for their nominated categories, their movies were the biggest spenders. The Curious Case of Benjamin Button, which was nominated in three of the four categories, spent $31 million-more than any other movie, while Changeling, nominated in just one category, ranked second in spending: $29.6 million. Frozen River, nominated for Best Actress, spent the least, under $400,000.

Spending on movies nominated in the Best Picture and Best Director categories was $64.3 million (the same movies were nominated for both categories). In comparison, the movies in the Best Actor category spent $57.3 million on advertising, while movies for Best Actress spent $55.5.

Milk, winner of the Best Actor category, spent $11.3 million on advertising; more than double that of The Reader, the movie that nabbed the Best Actress Oscar.

In the coming months, the “Monthly Automotive Industry Overview” will include staple features such as top blog posts, most-cited online news articles, “buzz” trends of the top six automotive manufacturers, as well as key topics that are influencing online discussion about the automotive industry. For more information or a complete copy of the report, visit Nielsen Online.