Want Millennial Buyers? Make a Video

In one Web commercial, an exuberant woman standing next to a RAV4 says "Airbags!" -- and the spot is over in 5 seconds.

Automakers are embracing online video ads for millennials for an obvious reason: That's where young shoppers' eyeballs are; they're buyers who appreciate the offbeat and humorous.

In October alone, 183 million U.S. Internet users viewed more than 37 billion videos and 11 billion video commercials online, data from digital analytics firm comScore show.

That amounts to an average of about seven videos and two commercials a day for each adult.

Earlier this year, Toyota posted videos on youtube.com to help launch the Prius C hybrid.

A Prius C shopper is a "much younger buyer, more of an urban buyer, someone who is very mobile and maybe won't take the time to go to the toyota.com main site," says Dionne Colvin, national manager of media planning in Toyota Division's marketing department.

Automakers say online videos, which range from standard TV commercials to offbeat videos, hold advantages over TV or print ads. Advertisers can more precisely target ready-to-buy consumers using data about Web users' surfing behavior or interests. Online video also can be a more interactive and engaging advertising format than TV. Hoping to get a viral hit, auto advertisers are more willing to experiment with edgy or sometimes downright goofy video ads.

Nearly every brand -- even beleaguered Suzuki -- has made online videos at least a part of its advertising mix during the past two years.

Ford, for example, created a series of humorous Web-only videos featuring a troublemaking orange puppet named Doug for prime consumers ahead of the 2011 Focus launch.

Chevrolet's YouTube page has more than 107,000 subscribers while nearly every major automotive brand -- from Audi to Subaru -- advertises on hulu.com, a streaming video Web site where users can watch movies and TV shows.

It's difficult to quantify the growth of online video ad spending by automakers. But anecdotal evidence shows that auto advertisers are flocking to online videos.

Hulu.com, for example, said last week that the number of automotive brands advertising on its site is up by 58 % through Nov. 19 from the same period last year. The company also says its automotive advertisers are spending 39 % more this year.

According to a recent survey by online marketing firm Martini Media, 94 % of auto advertisers are spending more on digital video this year compared with last year. More than 60 % of 381 digital marketing executives from the auto industry and their ad agencies said in the survey that they are shifting ad dollars from TV to online video.

Automakers say online video can help expand the reach of TV commercials, particularly when they go viral, the Holy Grail for advertisers. Volkswagen's Passat commercial featuring a young Darth Vader, for example, became a viral hit after airing during the 2011 Super Bowl, gaining more than 55 million views on YouTube since.

Tom Peyton, associate vice president of advertising for American Honda Motor Co., says the company is investing heavily in Web videos, primarily to reach millennials, who are mainly in their 20s.

"That's where the future is, and that's the medium that they like best. That's where your video focus needs to be," Peyton says.

Web video has been a major driver of a doubling or so in American Honda's digital ad spending over the past four years, he says.

"Four years ago, online just meant banner ads," Peyton says, referring to static ads usually on the top or along the sides of Web pages. "Now, I'm buying Hulu. I'm buying the video portion on AOL and MSN, and a lot of those dollars are moving from TV to these digital sites."

The explosion of online video-sharing Web sites such as youtube.com and online TV show streaming sites such as hulu.com have created new opportunities for carmakers to advertise to potential customers.

The huge pool of potential car buyers flocking to these sites is a big reason why Toyota has made digital video a priority.

Colvin says digital video spending has grown into a "significant" investment for Toyota in the past three or four years.

"It's now a foundational element of our plans so that most of the time when we go to market there is some type of an online video element," Colvin says. "A few years ago, there weren't as many opportunities for online video from our perspective."