Automotive News - February 4, 2008 - (Page 38) 38 • FEBRUARY 4, 2008 The online dealer INSIGHT Dealers: Web is one of many marketing tools Online ads don’t replace those in traditional media Jim Henry autonews@crain.com Auto dealers agree that they need to advertise online and that the need continues to grow. But they also say online advertising is proving to be another tool in their marketing kit, rather than a replacement for ads in traditional media such as local TV and daily newspapers. “It’s still a very fluid situation,” says David Conant, president of Conant Auto Retail Group in Newport Beach, Dealer David Conant: A “gutwrenching time” for dealers reviewing ad budgets LINDA FORD Calif., a private dealership group that sells eight automotive brands. “It’s a bit of a gut-wrenching time” for dealers who are reviewing their relative spending on Web ads and in other media, Conant says. A survey last year by the National Automobile Dealers Association concluded that in 2006, franchised dealers spent 11.5 percent of their ad budgets online, up from 6.7 percent two years earlier. That figure does not include advertising on newspaper Web sites. Four years ago, Internet advertising wasn’t a separate category, NADA says. Percentages are unavailable for 2007. As new-vehicle sales and margins fall, especially for Detroit 3 brands, the stakes are higher for every advertising decision dealers make. At the same time, dealers say they are forced to make frequent changes in ad spending to keep up with competitors. “The Internet is one of many things,” said John Hawkins, outgoing chairman of the American International Automobile Dealers Association. “Sure, it has grown,” said Hawkins, whose Great Metro Autogroup operates eight franchises in three Southern California locations. “We didn’t have Internet departments five or eight years ago.” Fast-growing category AIADA represents import-brand dealers. According to an association survey last year, 43 percent of member dealerships spent more than $30,000 on online advertising in 2006, up from 29 percent in 2003. Most of the spending was for thirdparty Web sites and online classifieds, AIADA said. Finally, a GOLDDIGGER GOLDDIGGER A lot of money is buried in your database. Valuable customers who are ready to buy today. GOLDDIGGER knows who they are. The eLEAD CRM CALL CENTER will drive them straight to your showroom and service drive. But Hawkins said last month that many dealers are taking a onceburned, twice-shy attitude toward Internet advertising. “People would come in and say, ‘We’re going to get you clicks,’ ” Hawkins told Automotive News. “Well, it didn’t take long to realize that clicks are not sales. Some of these people didn’t know how to turn clicks into sales.” Dealer Conant says his media mix changes frequently. But he estimates that 20 percent of his advertising budget is tied directly to the Internet. He also places a company Web address in every ad — print, radio, TV and direct mail. Conant says he had experimented with taking nearly all ad money out of print and putting it into Internet advertising. But he says he discovered the occasional print ad still works. “Just when you think you’ve got it Storm signals The troubled economy could affect the growth of dealership Internet advertising, dealers say. These are factors they cite. Return on investment in advertising has become less predictable. Ad budgets and media mix require constant tinkering and monitoring through research. As competitors stampede from one ad medium to another, something that cut through the clutter last month may be lost in the clutter this month. The quality of leads generated through ads on third-party Web sites is often disappointing. Options include leads from automaker and dealership Web sites and telemarketing by dealership business development centers. figured out and you think, ‘This print thing’s not working,’ you run something and what do you know? It’s a big success,” Conant says. “People walk in, carrying the ad with them.” that makes you money! ‘School of Hard Knocks’ Dealer Tom North of North Brothers Ford and North Brothers LincolnMercury, both in suburban Detroit, says his media mix changes constantly. He says he advertises with third-party lead generators but usually only as part of a package deal that includes other media. “We have been to the School of Hard Knocks,” North said last month during an industry discussion sponsored by R.L. Polk & Co. “I welcome lead generators, but I won’t pay a lot for them. And I won’t sign up with them long-term.” Asked how long he gives new advertising a chance to work before he decides whether it is successful, North responded: “Can I get that in minutes?” He said he was only half joking. Hawkins said dealers must measure the results of all their marketing efforts monthly or even weekly. That includes Internet advertising as well as sentimental favorites, he said. “I met with a guy who was so proud he had sponsored the local football team for 20 years,” Hawkins said. “But I don’t know whether he had any idea if it was doing him any good. 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