As consumers continue to spend more time online researching car models prior to purchase, dealers are following them online and spending more on advertising.

Cars.com polled dealers in its monthly newsletter about their planned online advertising spending for 2007, and almost two-thirds of car dealers said they plan to increase their online advertising budget in 2007. Over 20 percent said they plan to maintain their current spending levels, and 18 percent said they expect to spend less.

"Dealers increasingly recognize the value of internet advertising and the exceptional return on investment it offers, particularly when compared to radio, outdoor and direct mail programs," said Mitch Golub, president of Cars.com. "Unlike these other media, effectively placed internet advertising reaches more in-market car buyers and drives more high-quality traffic to dealer stores."

Other researchers, including eMarketer, also point to online ad growth in 2007. eMarketer claims online spending for the automotive industry will nearly double for auto companies in two years, going from $1.4 billion in 2005 to $2.7 billion in total online advertising in 2007.