Manufacturers are at risk of cannibalising their advertising budget by targeting the same people through display advertising and lead generation on some of the UK’s large new and used motoring websites, according to car enquiry website Motoring.co.uk.
UK online display advertising is estimated to have grown by nearly 20% since 2009 and online advertising spend for 2012 is estimated to be nearly £4.5 billion, while performance marketing – or lead generation as some people may call it – has grown exponentially in the same period, as more and more brands look to generate a direct response from their online spend.
The automotive sector accounts for a large percentage of online advertising and with around £550m total advertising spend in 2011 from car manufacturers, it is estimated that £350m is spent by the top 10 car brands.
Automotive accounts for a large percentage of online advertising spend, estimated to be £137m annually and around 23% of that is spent on online display advertising.
With an average year on year growth of 12% year on year, automotive online display spend amounts to around £35m.
Chris Green, sales director of Motoring.co.uk, said: “Performance marketing is a specialised area and is growing rapidly as manufacturers look to boost the return on investment (ROI) from their marketing spend.
“We estimate that over the next five years we will see performance marketing take share away from traditional automotive online advertising because it is highly measurable.
“However, marketing directors of large OEMs and their advertising agencies need to make sure they don't pay twice for a new car lead when spending on display and performance marketing and that's why they need to look at spreading their spend and choosing their partners carefully, having a multi-channel approach through email marketing, live data, and using a mix of automotive publishers guarantees ROI without cannibalisation.
“Automotive brands need to spread their risk and spend to make sure they are getting the absolute best coverage and ROI, without having to spend more money with leading automotive websites that are already taking the lion’s share of display advertising budgets.”