(This is the first part of a two part series)

It has been about a decade since the automotive Internet revolution started.

Since then, we have run the gamut, starting with the Internet threatening to displace sales people and dealerships. Then the Internet was deemed a “non event.” Now, it is seen as doing what some of us said it would do:

  • Putting customers in charge of the transaction.
  • Making the dealerships' marketing, communication and operations smarter and more efficient.

After the non-event stage, the Internet enabled dealers to buy hundreds of leads from where ever. The idea was to get lots so you blow through them as fast as you could to close as many as possible.

It made us inefficient faster than ever before.

In this new decade, our business is changing yet once again. We are transitioning from the Internet driving traffic to your business to the Internet being your business.

Customers are transitioning from looking for things on the Web to doing things there. It will take a network of Internet-enabled and connected Web properties and applications to give customers what they want, when they want it and the way they want it.

Let's begin at the beginning and also at the most operationally inefficient area of every dealership: the advertising and marketing budget.

First up is demand generation or more commonly referred to as leads or traffic.

Your entire inventory needs to be everywhere it can be. Ebay Motors, Cars.com, AutoTrader.com, Carlocate.com, Craigslist and othere listing sites.

People look for a car first. A dealership is a distant second.

Never use stock photos. Even for new vehicles, take pictures of the actual cars. Take these photos yourself. Do not outsource. Pictures are critical to your success online. They are the main reason a customer chooses a car online.

For best practices on taking vehicle pictures go to my blog www.pcmguy.com. Look under best practices

You only need one set of pictures for each model new car you sell in each color, then put the number of that model in that color you have in stock in the listing.

Better yet, have a model microsite for each of these models built, and direct the customer from the listing site to the microsite for more in-depth information and engagement.

By doing this, you are then able to track and score the behavior of the customer. Taking a customer from a listing site to a microsite also pulls them further into your brand. It allows you to direct the shopper to your inventory site.

This isn't a reason to get rid of the listing site from your budget, but it is a barometer to allow you to understand what you are paying for and what you should be paying for. The benchmark for a conversion of listing site should be 30% to 40% less than what you would normally pay for an Internet lead.

By linking all of these sites to your main website you are also creating great offsite search-engine optimization. The best platform I have seen for this is www.micrositesbyu.com.

Pay-Per-Click Campaigns

PPC is largely misunderstood. It's rarely a good idea to send PPC traffic to your main website. The best place for PPC traffic to go is to a landing experience typically a microsite or a conversion path. The main reason for this is “message match.”

When you send respondents to your main random-access website there is a disconnect between what got the respondent to click in the first place and the message they get when they land on your site. The customers don't find what they instantly thought they were going to get, so they abandon the site.

Also when the respondent lands on your main website, they could get lost and abandon it. Or, as is often the case, your main website is so confusing the customer just stares at the home page for a few seconds and abandons your site, with no engagement at all.

PPC is all about the conversion. Nothing else matters. If your PPC campaigns aren't converting (getting a lead) at between 8% and 15% something isn't right. Your keywords are too high in the funnel or more likely your landing experiences aren't resonating with the respondents who are clicking on the ad.

IAD3.0 PPC keyword buys are looked at a lot like you would look at generating a list for a direct mail or e-mail campaign.

You should segment and strata keywords and phrases by the respondent's most likely position in the sales funnel and by geography.

Stratify your keyword buys according to funnel position, geography and enough conversion rate data. That will allow you to place the highest bids on keywords in the right geography that have the highest possibility for conversion.

Build four or more completely separate landing experiences and let your respondents indicate which one resonates most and converts the best in real time.

Then, to optimize the campaign, shut down the other three and funnel all traffic to the winning landing experience.

Do multivariate testing on your winning landing experiences. That testing is the process of changing button positions, colors, submission forms, headers and the like. That gets you to the optimal conversion rate for each campaign.

Affiliate Marketing & Banner Ads

This medium is new to the auto world and has evolved into a good traffic source with the right partner. Again, this is all about the conversion of the lead.

Pay for CPC (cost-per-click) not CPM (cost-per-impression). There is no branding when you're marketing through an affiliate network. These banners are on other sites that people meant to go to

Some affiliates work on CPL (Cost-Per-Lead) basis even. IAD3.0 will track and analyze everything with the conversion in mind. They know what banner sent the click and what site it was on.

Tracking the sites and banners that get the most leads then doing multivariate testing on those banners will get you the return on investment you need from affiliate marketing.

Partners include RreachLocal and MicrositesByU.com.

Turning Traditional Digital

If you are going to use radio, TV or newspapers, then make it event-driven.

Have periodic events throughout the year. Coordinate this traditional media around these events and structure your media buy on a vertical message strategy.

A vertical strategy means that when you're buying a channel and a day, you need to own that channel and that day. Every other spot needs to be your spot so back your budget into one or two channels and a couple of days surrounding the event and own them.

If your spot owns a day, you will get the largest amount of eyeballs or ears with more impression on them (reach and frequency). Send as much of this traffic as you can to a microsite landing experience that is dedicated to this event.

The more you can generate digitally, the more you will engage the respondents, the easier it is for respondents to get all the information and do business with you, the more you will sell and the higher your chances of conversion.

Use SMS short codes to engage customers via mobile. This is particularly effective for radio. Short coding done well will get you permission to text the customer updates and will help you capture e-mail addresses.

Outbound Demand Generation

This is the process of engaging customers at a point when it is believed they are getting ready to be in market.

The market is now moving so fast, the best practice here is now to start three to six months prior to there being in the marketing.

The No.1 way to communicate to the customer base is e-mail. Notice I said “communicate” not market.

E-mail has turned into this personal space that customers really do not share lightly and will remove you at the drop of a hat, mostly because e-mail clients and ISPs have made it easy for them to do so. This is why it is so important to get the term “e-mail blast” out of your vocabulary.

If you are blasting out an ad or offer to everyone with no regard to relevance to the list you're sending to, you are turning people away from the best way you have to talk with them and killing your brand. Keep it relevant and stop blasting.

Images are your nemesis here. You cannot be sure how the respondent will see them and they serve little value. Do not make the image your offer, it may not be seen.

Do not fill e-mail with links; it will be considered spam. Keep your e-mails to a paragraph and be sure you have a clear call to action. Link the e-mail to a microsite landing experience so the customers can get the info they want, when they want it and the way they want it.

This will increase conversion up to five times the normal 3% rate and allow you to track, analyze and test each e-mail campaign to get the best results.

Direct Mail

Highly targeted direct mail is still very effective, particularly when combined with digital supporting channels. This channel relies heavily on your relational marketing database (covered later in part II of this column).

With a proper target list, direct mail will on a volume level outperform e-mail. That's because your dealership's database will have more customer addresses than e-mails, and also because customers react better to direct mail for sales.

Do bi-monthly or quarterly direct sales campaigns with service cross-promotions.

(Next month: Social media and more)

Marketing expert Larry Bruce is vice president-managed marketing solutions for Reynolds & Reynolds. He is also a partner in MotorTrendsOnline.com and a dealership partner in the GM Sanddollar Autoplex.

Questions or comments about this column? Send us an e-mail at Dealers@wardsauto.com.