Spending Marketing Money Smarter

Digital advertising is all the rage today in automotive retail. Dealers are hearing a steady drumbeat of messaging from self-ascribed experts and Web-focused vendors to get out of print and put all the advertising money into online channels.

Surprisingly, though, some vendors are saying not so fast.

Larry Cochran, general manager-Digital Marketing for Automatic Data Processing Inc. says some dealers are making short term decisions often based on the economic situation to move completely to digital advertising.

“I think it’s happening way too quickly, in my opinion,” he says. As an example, Cochran points to dealers who might have only 2,000 customer email addresses, yet completely have discarded print-based direct marketing, relying only on email marketing. As a result, those dealers might be missing thousands of customers in their database.

“Still, digital advertising makes sense,” Cochran says. “When you see the stats of eight out of 10 people start their research online, you need to be there.”

Dean Evans, chief marketing officer for Dealer.com, cautions dealers from falling into what is quickly becoming an old mindset that digital advertising is cheaper.

“In some cases, print might actually be a more efficient and less expensive spend for dealers today,” Evans says. “There are some areas of the country where newspapers are charging dealers thousands less than before to take out a full page ad on the weekend. Is that more efficient than some digital channels today? Absolutely.”

The question is how to make sure you’re maximizing your spend.

“It’s really a question of ‘who’ relevance and ‘when’ relevance,” says Dennis Galbraith, vice president-Operations, Training, Dealer Products at Cars.com. “Dealers need to get their message in front of people who are in the market when they are actually shopping for a vehicle.”

Experts disagree on how to get there. One of the hot new buzz words in automotive retail marketing is Web-based display advertising. It's been mostly used by tier one auto makers) and tier two advertisers (regional ad associations) but now display advertising is finding its way down to the local dealer level.

Essentially, display advertising is a banner ad across the top of a Web page, a skyscraper ad along the side or an ad within the body of the page. What makes display advertising different today than before is the ability for advertisers to serve up messages that target Internet surfers by geographic location, demographic information and online behavior.

It's an important tool as studies show more people are skipping the commercials in TV shows using their TiVo device. “It helps dealers get in front of people who are harder to reach today,” Greg Meyer, vice president of product development for the Cobalt Group, says. “It’s an effective way to extend your reach.”

But you have to marry display advertising to geographical and behavioral targeting, he says.

Evans disagrees that display advertising should be a part of a dealer’s spend. While ADP, Cobalt and Cars.com offers dealers display advertising solutions, Dealer.com does not.

We don’t think it’s an efficient spend for dealers,” Evans says. “It is an important tool, though, for dealer ad associations – the tier two advertisers.”

He believes dealers should focus their digital spend on their local market areas before trying more expensive Web-based advertising.

“You need to look at how you can optimize your advertising money and not just throw it at digital,” Evans says. “Prioritize on those areas that get the best return.”

Meyer believes smart dealers are looking at their entire arsenal of Web solutions and not just one tool. “I really think there is no one silver bullet,” he says. “Instead, it’s a portfolio of solutions that changes over time and is cyclical.”

Galbraith says while the industry focuses on the people who are in market for a vehicle, it doesn’t talk enough about targeting them when they are actually shopping for a vehicle – for example, when people visit a dealer’s website, or sites such as AutoTrader.com or Cars.com, it’s a good bet they are shopping for a vehicle. “That’s when you want to target them,” he says.