I stated some of these views about a year ago and it drew some heated discussion. Not too concerned about being controversial, I thought I would reintroduce the subject.
For those that don't know me, I was the Internet Director at a large metro import store. The department was responsible for 70% of the new and used car sales utilizing 30% of the sales force and 20% of the budget.
Looking at NADA Data from 2011, the percentage of our advertising budget was actually pretty low:
I doubt that anyone on this forum will debate that the internet is the most effective and efficient form of advertising ever made available to the automotive dealership. My question is why; doesn’t the internet demand a higher percentage of the budget? Maybe, why are we continually having to fight for our share?
I think there are three major reasons:
Comfort Level. Dealerships understand how to use print and electronic media. Over the years, they feel comfortable with it. I’m sure that most understand that TV advertising has become less effective with recording devices, NetFlix, and a thousand channel choices. Radio advertising is also less effective. We now have satellite radio, CD players, that hold 5 disks, and iPods. Dealers still have a love affair with print. It is pretty hard to mess up. You need a picture, brief description and a payment or price. The younger you are, the less likely you are to read a newspaper. I don’t know anyone that still subscribes to a newspaper. If newspapers hadn’t gone online, there might not be any of them left. Even the New York Times is in financial trouble.
ROI Reporting. I doubt anyone pays any more attention to the ROI report than I did. Like they say in the bayou, “if that dog don’t hunt, it don’t eat”. I had a reputation for being tight, even cheap, with the dealership’s money. Are the other advertising sources being put to the same level of scrutiny? We’ve all heard the old saying, “half of my advertising budget is being wasted but I don’t know which half”. Any time you question other advertising sources, you hear “branding”. If the majority of people are doing their research, online, won’t your internet marketing positively affect the store’s branding? The need for "Branding" is a keen concern for many on DealerRefresh. Is it about time that we approached ROI the same way for all forms of advertising?
Marketing and Processes. I spend a lot of time looking at dealership websites and their placement on third party display sites. I’m convinced that I can tell you who is selling cars and who isn’t. They say in internet circles, “he gets it”.
I amazed to see “Call for Price” on dealer websites and third party display sites. Do people actually think someone is going to call? If you have your cars listed at MSRP, do you think customers are going to get to the 5[SUP]th[/SUP] page on AutoTrader or Cars.com to see it? I was looking at some Chevy dealerships on AutoTrader. Only two stores had the price reduced by the rebate. If the customer sorts, by price, that puts the competition on the back pages. I’m convinced that most customers sort by price and many will check the box that excludes vehicles without pictures. I saw a dealer that was an Alpha store on AutoTrader but his listings were in the featured section. If a customer sorts by price, there were enough premium dealers to put his vehicles on the fourth and fifth pages. This store had one actual picture and no descriptions. How much more would it cost to have multiple pictures? How much more effort? Descriptions only take some time, effort and a little creativity. A VIN explosion is not a description.
At least once a year, I see the same old statistics when it comes to internet processes. We see that response times are often being measured in hours and even days. ISMs are more likely to send an email than to pick up the phone. If they do contact the customer, it is often “one and they’re done”. Few dealerships monitor their phone calls on a daily basis. Long term follow-up is until the end of the month.
If dealerships aren’t marketing their products and they don’t have tight processes, they are not going to have very successful internet departments.
A dealership that does actually “get it”, could cut their total advertising budget and sell as many or more cars and dramatically improve the bottom line.
For those that don't know me, I was the Internet Director at a large metro import store. The department was responsible for 70% of the new and used car sales utilizing 30% of the sales force and 20% of the budget.
Looking at NADA Data from 2011, the percentage of our advertising budget was actually pretty low:
I doubt that anyone on this forum will debate that the internet is the most effective and efficient form of advertising ever made available to the automotive dealership. My question is why; doesn’t the internet demand a higher percentage of the budget? Maybe, why are we continually having to fight for our share?
I think there are three major reasons:
Comfort Level. Dealerships understand how to use print and electronic media. Over the years, they feel comfortable with it. I’m sure that most understand that TV advertising has become less effective with recording devices, NetFlix, and a thousand channel choices. Radio advertising is also less effective. We now have satellite radio, CD players, that hold 5 disks, and iPods. Dealers still have a love affair with print. It is pretty hard to mess up. You need a picture, brief description and a payment or price. The younger you are, the less likely you are to read a newspaper. I don’t know anyone that still subscribes to a newspaper. If newspapers hadn’t gone online, there might not be any of them left. Even the New York Times is in financial trouble.
ROI Reporting. I doubt anyone pays any more attention to the ROI report than I did. Like they say in the bayou, “if that dog don’t hunt, it don’t eat”. I had a reputation for being tight, even cheap, with the dealership’s money. Are the other advertising sources being put to the same level of scrutiny? We’ve all heard the old saying, “half of my advertising budget is being wasted but I don’t know which half”. Any time you question other advertising sources, you hear “branding”. If the majority of people are doing their research, online, won’t your internet marketing positively affect the store’s branding? The need for "Branding" is a keen concern for many on DealerRefresh. Is it about time that we approached ROI the same way for all forms of advertising?
Marketing and Processes. I spend a lot of time looking at dealership websites and their placement on third party display sites. I’m convinced that I can tell you who is selling cars and who isn’t. They say in internet circles, “he gets it”.
I amazed to see “Call for Price” on dealer websites and third party display sites. Do people actually think someone is going to call? If you have your cars listed at MSRP, do you think customers are going to get to the 5[SUP]th[/SUP] page on AutoTrader or Cars.com to see it? I was looking at some Chevy dealerships on AutoTrader. Only two stores had the price reduced by the rebate. If the customer sorts, by price, that puts the competition on the back pages. I’m convinced that most customers sort by price and many will check the box that excludes vehicles without pictures. I saw a dealer that was an Alpha store on AutoTrader but his listings were in the featured section. If a customer sorts by price, there were enough premium dealers to put his vehicles on the fourth and fifth pages. This store had one actual picture and no descriptions. How much more would it cost to have multiple pictures? How much more effort? Descriptions only take some time, effort and a little creativity. A VIN explosion is not a description.
At least once a year, I see the same old statistics when it comes to internet processes. We see that response times are often being measured in hours and even days. ISMs are more likely to send an email than to pick up the phone. If they do contact the customer, it is often “one and they’re done”. Few dealerships monitor their phone calls on a daily basis. Long term follow-up is until the end of the month.
If dealerships aren’t marketing their products and they don’t have tight processes, they are not going to have very successful internet departments.
A dealership that does actually “get it”, could cut their total advertising budget and sell as many or more cars and dramatically improve the bottom line.
