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Greg Bowens Automotive News / February 13, 2006 On a recent weekend, dealer Dave Mungenast invited 1,000 people to his St. Louis Acura store to teach them how to prevent child abductions. One way John Symes, a Cadillac and Toyota dealer in Pasadena, Calif., advertises his dealerships is by holding blood donation drives there. Lexus dealers in Southern California sponsor podcasts of a local public radio station's programs. Each month, 400,000 tech-savvy consumers download the broadcasts to their digital music players. They hear a message from the dealers as well. As broadcast TV networks' audiences decline and newspaper circulation drops, dealers are looking for new ways to advertise. Those efforts include greater emphasis on event marketing, the Internet and e-mail. "Every year I spend less money on advertising and sell more cars," Mungenast says. "Before this, I made my own TV commercials. I thought I was slick. But you're really just stroking your ego, and you don't know how much money is wasted." The average dealership spent 6.7 percent of its 2004 advertising budget on the Internet, the National Automobile Dealers Association says. A decade ago that category barely existed. By contrast, says NADA chief economist Paul Taylor, newspaper ads represent about 46 percent of the average dealership's ad spending, down from 54 percent 10 years ago. In the same period, the share of ad budgets dedicated to TV has declined from 17 percent to 15 percent. New options "The trend toward nontraditional advertising will accelerate because there will be additional options we cannot foresee," Taylor told Automotive News. "Five years ago, who would have thought of podcasting?" But don't write off newspapers just yet, Taylor warns. "Newspapers are participating in the growth of Internet advertising," Taylor says. "Traditional (newspaper) ads remain one of the key places customers pick up dealership Web site addresses, even though an increasing number are picking up the Web address by using Internet search engines." Today's dealership Web sites are a far cry from the static screen shots seen in the Internet's early days. Those sites did little more than list a dealership's address and phone number. Users of dealership Web sites now can check vehicle prices, contact salespeople, apply for financing and schedule service appointments. "Dealers are looking around for alternatives" in advertising media, Taylor says. "They are looking around for channels that are not choked." That search includes satellite radio, iPods, cell phones and wireless BlackBerry devices. Mungenast says he is making greater use of e-mail to tell customers about service specials. "Spend the money on customers," Mungenast says. "They will go out and become disciples." The future: e-mail California dealer Symes says he is looking at software that would let him cull his customer database for e-mail addresses. "I think e-mail is the future," Symes says. "If a new incentive comes out today, I could put an ad out in 10 minutes via e-mail. The opportunities there are unbelievable." Other dealers are working more closely with third-party automotive Web sites as sources for customer leads. For example, about 5,000 dealerships pay Autobytel to send them sales leads that arise from visitors to autobytel.com. "Statistics show that 70 to 75 percent of the people looking for a car start their search the Internet," says Mike Rosenberg, an Autobytel senior vice president. Autobytel also is looking for ways to run local dealer ads on its site, Rosenberg adds. Before too long, industry analysts predict, dealers will have commercials on iPods and other digital music players. In the meantime, they say, dealers' Internet advertising will continue to grow, capturing dollars now spent on newspaper and TV ads. "Internet advertising is cheap," says Jessica Potts, manager of public and industry affairs of the American International Automobile Dealers Association. "And more information can be captured from the Internet than from your ad on television." As he embraces digital strategies, Symes says print advertising is showing diminishing returns. |
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