Borrell: Paid Search Rising For Autos Category

Automotive, Recruitment and Real Estate are three especially lucrative and important local advertising categories. They have been historically dominated by print newspapers, to the tune of about $17 billion last year in the U.S. But the Internet is gaining rapidly.

A new report from Borrell Associates estimates that advertising in the Automotive category is now worth $31 billion across media. Borrell estimates that the online segment is currently worth $2.8 billion. However, the research firm says that by 2009 online ad expenditures in automotive will reach $4 billion exceeding spending in all individual media categories but television.

Borrell expects traditional media (newspapers, magazines and direct mail in particular) to continue to lose share while online gains at their expense. Interestingly, the report argues that online lead-generation programs in Automotive are “faltering” and banner ads are losing favor vs. paid search marketing and online video.

Significantly, for this audience, Borrell estimates that roughly “one-third of dealers are buying search engine advertising, and 80 percent of them say it is successful in driving new traffic to their sites.”

A free executive summary of the document, with the high-level data and forecasts, is available here.