Regardless of whether the Big 3 automakers survive as is, get loans or seek bankruptcy protection, they will need to operate more efficiently. Advertising is a huge portion of their operating costs and therefore is a key place to focus efficiency improvements.

One very basic, yet powerful, way to measure ad effectiveness is by comparing ad dollars spent to the number of in-market shoppers the advertising generates. The result (dollars per shopper) is a uniform way to measure ad spend efficiency across all automakers and across all ad spend types. To assess how the Big 3 are doing on this measure, Compete used its recurring demand measure and, in this case, ad spend data from our sister company, TNS MI. Here’s what we found.

Clearly the domestics are less efficient, spending $192 per shopper vs. $168 per shopper for the other automakers. That means the Big 3 get about 5,200 shoppers for every million ad dollars spent, while the others get about 6,000 shoppers – an efficiency difference of 15%. Next, we looked at results at the brand level.

So what do we see? While Mercury looks to be a clear leader at first blush, the reality is that the brand slashed its ad spend in 2008 and its shopper counts will certainly follow, albeit more gradually (efficiency is great, but if you’re not hitting your sales goals, you simply can’t cover fixed costs). The true successes are those with relatively high spend and low costs per shopper, such as Ford. Those in need of improvement include those with low spend and poor efficiencies, like Hummer.

These results are a good foundation to understand and address the challenges facing the US auto industry. The next step is to add context around things like market conditions. For example, are the off-pace results for Hummer the result of poor advertizing, off-the-mark placement, or simply an impossible hill to climb when gas prices were so high for much of the year? And once that puzzle is solved, the next element is how effectively autos makers convert the demand they generate into sales.

I’m still gloating about winning my March Madness pool – Rock Chalk Jayhawk! Yes, I was glued to the TV during all games… yet, I can’t remember one single ad that aired. It’s sad for marketers really, if I was in fact who they were trying to reach; a college sports enthusiast! Which got me wondering… How much is typically spent on advertising during March Madness?

TV Ad sales projected by TNS were to be around $545 million. “As a sports marketing event, the collegiate basketball tournament is part of a Final Four alongside the Super Bowl and the Summer and Winter Olympics,” said Jon Swallen, SVP of research at TNS Media Intelligence.

And who are the biggest spenders? Well, apparently General Motors has consistently been the top TV advertiser in the tournament, spending an average of $70 million annually during the past five years. So what did GM get for the money?

Using Compete’s Search Analytics Select we created a segment of people called “college sports enthusiasts”. We found that referrals from search engines (MSN, Yahoo!, Google) to Pontiac.com and Chevrolet.com for this segment did increased significantly in March…

Good. The advertising worked… sort of. Increased traffic to Pontiac and Chevrolet doesn’t necessarily mean that it was worth it for GM to spend all those millions - unless of course the quality of the traffic generated was somehow better than before.

Looking at how involved those college sports enthusiasts were on Pontiac and Chevrolet indicates that visitors to both sites were considered more ‘engaged’ in March. Engagement is defined as: use of one of the following tools - Locate a Dealer, Build Your Own, Request a Quote, or Payment Estimator. That being said, conversion, on both Pontiac and Chevrolet’s sites not only reached 13-month highs in March but also outpaced other manufacturers like Dodge, Ford, and Jeep.

What does all of this mean for GM? Well, it seems like the advertising did a good job of attracting people to these two sites. And the quality of the people visiting the sites was better than usual. All’s good, right? Well, for Pontiac at least.

According to Autodata, Pontiac sales were up 6% in March but Chevrolet sales were down 1%. Chevy’s decline was driven by the truck segment, which is being hurt by high gas prices, so there’s more of a story there, but enough for now….

Toyota is closing on Chevrolet as the top brand in the US automotive market. Can Toyota’s web site be contributing to their success? Based on Compete’s Website Engagement Study, the answer is yes.

A look at traffic shows that Toyota was consistently ahead of Chevrolet in the number of people visiting their site until the October Malibu launch. The heavy marketing push for Malibu drove traffic increases of 30% and more and Chevrolet.com exceeded 2 million unique visitors for three months in a row, until January, when Toyota reversed a downtrend and again surpassed Chevy.

What does this mean?
People visiting the Chevrolet site are 37% less likely to visit one of the four key online shopping tools than the Toyota site visitors.

Why is that important?
Compete data shows that those who purchased a vehicle were twice as likely to use a shopping tool on an OEM site.

What is causing the difference?
In a complex industry like automobiles there are a myriad of forces at work that contribute to the online behavior of consumers researching and shopping for cars. Some of the suspects are: the source of traffic, overall marketing efforts, website construction and navigation, consumer targeting, and of course the brand and product preferences of consumers.