The advertising puzzle

Where do you put all the pieces? Dealership advertising can be a puzzle.

Auto retailers must decide which part of their advertising budget to put where in order to reach the most potential customers.

Putting that puzzle together is challenging these days because so many advertising options are out there.

Planning an advertising campaign has become more complex than merely buying a page in the newspaper and spots on the local TV or radio channel.

Now there are specific-format radio stations, 500-channel cable television and the Internet.

This expanding media universe has made advertising decisions more complicated. But it also has made advertising more targeted - and theoretically more effective.

"We talk about the three Cs: consistency, continuity and clarity," says Robert A. Mueller, executive management director at the J. Walter Thompson advertising agency in Detroit.

He explains, "Consistency means if you're going to be somewhere - be it on the radio, TV or in the newspaper - be there on a regular basis so people can start to expect you there.

"Continuity is the creative thread you weave through all your advertising.

"And you need clarity so you don't confuse people with a complicated message."

Joe Winkelmann, president of Green Stripe Media in Newport Beach, CA, adds, "People get 1,200 calls to action per week via advertising. And research shows that a person has to hear a message at least three times before it kicks in."

Developing a message for dealership advertising is as important as how it's delivered, say the experts.

"Dealerships are living brands, most often owned by an individual who is a significant part of the community," says Mr. Meuller, whose firm handles Ford nationally and many regional dealer group campaigns. "Everything they do reflects the brand."

There are two philosophies about dealer advertising. One is to sell prices and payments. The other is to build the dealership's image or brand.

"Both do work," says Mr. Mueller. "There's no pat answer. Every market is different and every dealership is different."

It's not enough for advertising just to sell the product or its price, says Pete Rentschler, executive vice president and group director at the Young & Rubicam agency in Irvine, CA.

"There must be something to differentiate dealerships from the competition," he says.

In the ad business, that's called G-POD, short for "greatest point of difference."

If a dealership hasn't identified its differentiating characteristic or service, it needs to do some internal soul-searching and some customer research. One way is to meet with a group of recent customers to get their views about what they liked about the purchase process.

"These focus groups can be relationship-building exercises as well," adds Mr. Rentschler, whose agency handles the advertising for all 29 Lincoln Mercury dealer associations.

"First and foremost, you must think about customer satisfaction," says Mr. Mueller. "You don't want to make promises that you can't keep. You want to make promises you know you can keep or go beyond."

Once it has been established, "the differentiating proposition should be in every form of communication," says Mr. Rentschler. "And the sales people need to be trained to sell the differentiating proposition in addition to the product."

With all of the media available to retailers these days, what are the best places to put dealer advertising?

"Campaigns need to be well-rounded communications programs," says Mr. Rentschler. "You can't be TV-centric and you can't be newspaper-centric."

The most popular places for dealer advertising are television (both local network affiliate and cable), radio, newspapers, billboards, direct mail and the Internet.

"A dealer's brand image should be the centerpiece to the TV advertisements," says Mr. Mueller. "They should include what the dealer stands for and why people should consider going there."

One dealer who subscribes to that theory is Bobby Baillargeon, general manager of Baillargeon Ford in the Dallas suburb of Richardson, TX. In 2000, he switched focus from radio to local network affiliates TV.

"Now, people are seeing the faces and I can't go anywhere without people saying, 'Hey, you're the Ford guy,'" says Mr. Baillargeon.

He adds, "There will never be a price or payment in one of our ads. It's all image."

Baillargeon Ford uses 50% of its ad budget on TV, 25% on radio, 15% on the Internet and 10% on print, which includes outdoor billboards.

Cable TV gives dealers a chance to target markets in a geographic area and demographic segment. It costs less because of that "narrow-casting."

A big fan of cable TV advertising is Mr. Winkelmann, a media buyer for many southern California dealerships.

"LA is like 10 little cities," he says. "We do cannon shots with radio and geographic rifle shots with cable TV, which dollar for dollar gives you the best bang."

Says Mr. Mueller sees it differently.

He says, "Local network affiliates are more expensive because they give dealers more people. It's still the best way to reach the greatest number of people."

He says traditional TV advertising actually is growing in importance as more media - like the Internet and multiple cable channels - become available for more focused marketing.

"The more of those things that are available, the more significant that cannon shot can be," says Mr. Mueller.

Radio is the primary advertising outlet for Fletcher Jones Motorcars in Newport Beach, CA.

"In southern California, people are really into their cars and spend a lot of time in their cars, so we put a tremendous amount of emphasis on radio," says Garth Blumenthal, the dealership's general manager.

He says 46% of his ad budget is spent on radio, 32% on print, 16% on cable and public TV and 6% on the Internet.

Mr. Blumenthal says the dealership tries to cover many demographics with its radio campaign by buying time on many stations. Those formats range from classical music to the Howard Stern Show.

"Radio is still a good way to reach a large number of people," says Mr. Mueller. "And you can target demographically because of the stations' various programming formats."

One might think that, with the emergence of the Internet, newspaper advertising might be losing favor with dealers.

Wrong.

"Print is still a staple for individual dealer advertising, especially for used vehicles," says Mr. Mueller. "Print is still very important because it's still the place people go to look for cars - both new and used."

A dealer committed to print advertising is Jerry Cohen, president of the Virginia-based Jerry's Automotive Group, which has several franchises including Jerry's Ford in Annandale, VA.

Mr. Cohen says he spends 60% of his ad budget on print, 15% on cable TV, 15% on radio, 5% on the Internet and another 5% on community projects.

"The Washington Post has 800,000 to 900,000 readers daily and a million on the weekends," Mr. Cohen says. "That's where you've got to be to get the biggest response."

However, when the Washington Redskins were making their playoff run, the dealerships bought a lot of local time on ESPN. "The seasonal ads are very important," he says.

Mr. Cohen also is a proponent of advertising price more than dealership image. "This is not an image area. This is a price-conscious area," he explains.

Direct mail advertising is the way to go for Dave Mungenast, president of the St. Louis-based Dave Mungenast Automotive Family, which includes Honda, Acura, Lexus, Toyota and Dodge franchises.

"We try to present both image and price, but lately the emphasis has been on image," says Mr. Mungenast. "And we've been using less mass media and more direct mail."

Part of his direct-mail campaign is a quarterly newsletter sent to about 22,000 customers and select prospects.

"Through direct mail we can do target marketing," Mr. Mungenast explains. "Instead of a cannon or a rifle shot, I call this a sniper-shot approach. We get lists from Polk and the state, and we only mail to the people most likely to buy our products.

"By doing this, we've reduced our advertising cost-per-unit down and sales have gone up."

Five years ago, the ad budget breakdown at Mr. Mungenast's St. Louis Honda store was 50% TV, 25% print and 25% direct mail.

Today, it's 40% direct mail, 25% print and 35% TV. The Honda store is the only Mungenast store still using TV.

And Internet advertising?

Dealers and ad buyers stress the importance of the Internet. But not all retailers include it in their ad budgets.

Mr. Winkelmann says the Internet, like every other aspect of dealer advertising, is just a piece of the puzzle.

"A button on the Internet is nothing unless you've built some brand awareness before they get there," he says.