Searching for Customers

Like nearly all other marketers, the automotive industry early on took a cautious approach to online advertising.

When initial online advertising experiments failed to produce a hyped one-to-one relationship with consumers, auto makers and dealers pulled back to their traditional advertising methods and waited patiently. (There were notable exceptions, such as the BMW series of original streaming videos).

But it didn't take long to discover that, before car buyers entered the showroom, the vast majority went online to research product options, compare models and get prices.

Within the past three years, auto makers and dealers have realized there is plenty of opportunity to reach Internet users at all stages of the shopping process.

Dealers and manufacturers alike look at using Internet interactivity as a measurable way to move more metal. But how long before they begin going upstream? Most dealers have yet to develop an effective online strategy to influence local buyers into their dealerships.

The auto industry is getting comfortable with online innovations (such as a feature that lets auto makers instantly present to online car shoppers a third option during side-by-side comparisons with competitive models) and rich media ad units such as branded browsers and streaming media that users can click on and call out featured products.

Now, as a way to target consumers by their navigation behavior, along come new efforts at search-engine marketing.

Advertisers spent $4 billion in 2004 on search marketing programs in which ads appear on search-result pages. Advertisers are expected to spend 39% more this year, according to the Search Engine Marketing Professional Organization.

Those figures underscore the complexity of search-engine marketing as they include payments to search-engine firms, search-related media companies, search engine-marketing agencies as well as in-house expenditures supporting such programs. Those costs include paid placement, paid inclusion, organic search-engine optimization and search-engine marketing technology platforms.

Both dealers and auto makers have a comfort level with spending on a cost-per-action basis. Search engine marketing is all about cost per action. You only pay when someone clicks on your ad.

Click fraud (repeatedly clicking just to drive up your costs) is being addressed by the industry.

What should the search-engine marketing strategy be for the auto industry? As consumers increasingly search locally instead of nationally, opportunities for dealers to advertise directly on search sites become real. The top search-engine companies are aggressively moving into local markets.

What about regional dealer associations? Their marketing efforts are almost always coordinated by a national agency (to keep a consistent message).

An ad agency may at first view search-engine marketing as simply a case of too few dollars to justify a new campaign.

But as marketers in every industry are learning, search-engine marketing is not a stand-alone process. It needs to be coordinated with other forms of promotion.

As customers increasingly forsake the yellow pages in favor of online searches for local products and services, search-engine marketing can make dealers part of the Internet research process that buyers go through before entering showrooms.

Dillon McDonald is vice president of Jumpstart Digital Marketing Inc. that works with dealers and auto makers.