Advertising on Internet is Enough to Sell Cars

   The internet is gaining power as the advertising media. The model of cars best sold by Toyota Motor Sales, U.S.A., Inc. in North America was advertised only on the internet and was not advertised on TV. This sent chills to the TV broadcasting industry. Commercial TV companies now fear that cars can be sold by advertising only on the internet. If nothing is done, the TV advertisement business is destined to collapse.

   The sales of internet advertisement in Japan last year amounted to 181,400 million yen which was more than that of radio advertisement. For this year, the figure is forecast to go up by 50% to 272,200 million yen. Japan's advertisement market has so far been dominated by what is called the "4 mass", meaning the four mass media of television, newspaper, magazine and radio. Last year, the sales of the internet advertisement hit the highest since 1996 when such survey started and exceeded for the first time the sales of the radio advertisement which was 179,500 million yen.

The Best Seller of Toyota Cars was Not Advertised on TV

The rapid growth of Internet advertisement frightens commercial TV stations. (Picture: Headquarters of Nippon Television Network Corp.)

   Companies which would put advertisement on the internet were mostly those engaged in mobile phone and other communications business, help-wanted and other staffing service or financial firms. But today an increasing number of carmakers, cosmetic companies and soft drink manufacturers are putting out ads on the internet. These companies usually set aside big budget for advertisement and big commercial TV users. Private television companies are thus very sensitive to the new movements.
   The use of banners was the main way of advertising on the internet in the past. But now the service for linking advertisement to keywords that are used for searching is gaining popularity. In this service, if a key word is put in on a search site, advertisements related to the site being searched will be shown.
   The internet advertisement market in the United States is tending to expand faster than it is in Japan. According to a recent study, the value of the market in the United States in the July-September of 2005 increased 34% over the corresponding period of the previous year to 3,100 million dollars, topping the 3,000 million dollar level for the first time. The value was expected to reach at least 12,000 million dollars, becoming level with the magazine advertisement.
   Pushing up the advertisement on the internet are mainly auto and tourist industries. The ratios of the internet advertisement to the total advertisement budgets of Ford Motor Co., General Motors Corp. and Toyota Motor Corp. of Japan are gradually increasing. The value of the internet advertisement market in the United States is expected to exceed 20,000 million dollars in 2009.
   A certain model of cars advertised on the internet by Toyota Motor Sales, U.S.A. is strongly drawing interest in Japan. This movement was triggered by the report that the best seller car of Toyota in the United States was advertised only on the internet. This threatened an executive of a commercial broadcasting company, who said that the Japanese broadcasting industry would collapse if Toyota did the same thing in Japan and Nissan and Honda followed.

Major U.S. Businesses are Cutting Down on TV and Expanding Internet

   The cars Toyota advertised only on the internet in North America were the three models: Sion, bB and Ist that are marketed only in North America. Toyota was understood to have employed the advertising tactics of spreading the information about these three models through the internet and then let it spread by itself from people to people. It seemed that this way of advertising was over evaluated in Japan. It was a fact, however, that the cars advertised only on the internet were sold well.
   The young people of the United States are tending to shun the television, and it was against this background that Toyota came up with the decision to take advantage of only the internet for advertising the models of the cars targeted at young people. The young people are spending more time watching the PC screens and less time for the TV screens. Not only Toyota but also major business firms in the United States are cutting down advertising on the TV and they are raising the internet advertisement budget by 20-50%.
   This movement is influencing in Japan. The "aggression against commercial TV stations" of last year, such as the buyout of the Nippon Broadcasting System, Inc. by Livedoor Co., Ltd. and management integration proposal to Tokyo Broadcasting System, Inc. by Rakuten, Inc., occurred against the background of the expanding use of the internet as advertisement media.