Never, in my almost 40 years of advertising experience, have I seen such confusion in the advertising world. Not just among advertising clients, but in the advertising community itself...
...Some of the world’s largest advertising agencies are topsy-turvy. Online specialists are claiming the future of the Internet as a mainstream medium is now. Traditional ‘upfront’ advertising buys have been lower for the past two years. (This is advertising purchased in advance on major networks.) Major advertisers, including automotive, are making often irrational, and unsubstantiated mid-stream budget changes. A new book has just been released with the premise that half of all advertising is (and has been for some time) wasted. What’s a car dealer to do? Let me share some ‘truths’ about the current state of advertising affairs.
Truth #1. Traditional advertising venues still work. The most successful (i.e. profitable) automotive retailers in America still spend the lion’s share of their advertising dollars on traditional mainstream media. Television, radio, newsprint.
Truth #2. The Internet is important. Even though almost 70% of car shoppers go online for information during their shopping process, only about 25% of automotive retail purchases are influenced by the Internet.
Truth #3. The market is changing. In Truth #2, 25% of car purchase decisions were influenced by the Internet, with only 1% of the auto advertising budget. Yet while 50% of the auto ad budgets were spent on Television, that medium only influenced 27% of the purchases.
Truth #4. Print is the most rapidly declining medium in terms of impact on car purchase decisions. Those seeking information are looking for real-time, in-depth, interactive platforms provided on the Internet.
Truth #5. Dealers doing the best job with Research have the best handle on what mediums are working, and the true value cost relationship of those mediums.
Truth #6. Most dealers still do not understand the importance of their own dealership website, and even those that do have not developed a synergy between their website and their overall marketing efforts.
Truth #7. Search engine placement is one of the most important, if not THE most important issue in Internet advertising.
Knowing what I know today, having a pretty good feel for the point we are at in the advertising continuum, and where we will most likely be in the next few years, my advice would be this.
Do the Research. Continuously evaluate the impact of various mediums on your own customers. You cannot rely on manufacturers’ surveys, nor can you confidently trust the obviously biased, self-serving, and conflicting reports of specific mediums. The best Research is a post-analysis of actual sales. This separates the talk from the walk. You don’t care how many thousands of people listen to a radio station in a given quarter-hour period. You don’t care how many zillions of people clicked thru your website. You don’t care about the preferred positioning in the sports section. You care about how many cars and trucks you sold last month! What elements of your marketing, and to what percentage, influenced those customers to step up to the plate and buy a vehicle from you! You get that information by asking those buying customers. Either in a personal interview format, or a properly worded questionnaire, conducted in a manner and method that elicits the highest qualitative responses. There are a number of research programs on the market that provide that information.
Re-evaluate your major media expenses. Studies show newsprint and network television have the lowest projected increases of advertising revenue over the next three years. The Internet has the greatest projected increase, followed by cable television and radio. Don’t conduct business as usual in formulating your ad budget for 2007 and beyond. A gradual shift in your budget makes more sense than a radical, knee-jerk change.
Re-visit your Internet investment. Do you have a website that truly reflects the overall marketing effort of your company? Is there synergy between your very best communication portal and your other advertising messages? Do all of your ads, your business cards, your stationery, your signage have the URL of your website? Can a customer click onto your website right now and find the vehicles you are advertising today in your print ad, television or radio message? Is your website easy to use? Do you have a strategy to collect opt-in email addresses of your customers and site visitors? Do you have a system to manage those emails? If your dealership(s) have at least 60 employees, one of those employees should be an online communications manager. This is a person who manages your newest portal (showroom) with the greatest possible growth potential. This is not a programming person. Nor is it a technical person. This is a web-savvy individual who can help you manage the interactive communication process. A person who spends 115% of their time thinking of new ways to make your website more friendly, informative and easy to use. This person is your liaison between e-customers and department managers.
If you operate a smaller dealership, there is still no reason for you to NOT be involved in the Internet. The smallest dealership in America can have the ‘stature’ of the biggest dealership…and quite frankly may actually outperform larger dealerships in e-productivity. Find a LOCAL web design company who will take the time to study your operation and design, manage and refresh your site on a continuous basis. Many good design companies charge somewhere in the range of $200.00 per page and less than $100.00 a month to host your site on a substantial high speed server. Most of these companies offer maintenance packages at a very affordable price. Your other option is to choose one of the national automotive internet design companies (some with design/maintenance services in foreign countries) and while design costs are not high, the monthly maintenance/service costs will be substantially higher. Going local does not necessarily shortchange you in technical services in my opinion. Today it is fairly easy for any web design person to interface your site with manufacturer sites and third party information services. An important design criteria should be self administration areas on your website that virtually anyone with authority at your dealership can change at the drop of a dime. That way you can add and delete advertised vehicles and specials at a moment’s notice.
Your dealership marketing landscape may look dramatically different in 10 years from now. There is no reason to panic. No need for confusion. But there is a need and reason for awareness of rapidly moving structural changes made possible by the Internet, and a consistent process of research and re-evaluation of the value each medium brings to the table.
Do you have questions or comments about this or past AdTalk articles? Feel free to email them to CBC.
This issue of AdTalk is brought to you by Research Partners. Serving dealers for nearly 20 years to help reduce advertising cost: Research Partners
