In an interview published recently on Automotive Digest's Frontline Ready with Chip Perry of AutoTrader.com, Perry states the following in regards to the marketing efforts of AutoTrader.com,

"The way we've approached this is both with online advertising and marketing balanced with a good solid mix of off-line marketing and advertising.. One of the things that we coach and encourage dealers to do is to really look at their traditional media spending. We believe that the traditional media has some cost effectiveness problems and some declining reach problems. The average dealer is 90-10; ninety percent traditional media and ten percent Internet. We are 50-50. We haven't given up on traditional media. We believe it plays a role."

I found this insightful and encouraging because it ties in with the idea of online brand marketing for dealers. There is data to uphold the fact that Internet marketing and advertising still offers a better return dollar-for-dollar than offline advertising. This is primarily because offline advertising is still very expensive. Most businesses know this and obviously AutoTrader.com does. But this doesn't change the fact that offline advertising is still important for businesses. The responsibility then for dealers is to find the right balance.

Offline advertising for a business like AutoTrader.com is different from that of car dealers. For one, dealerships are local businesses whereas AutoTrader.com is an Internet business. But the effect is essentially the same. Offline advertising really is more a form of brand marketing then it is lead generation. Ironic that car dealers would pour 90% of their marketing dollars into offline brand marketing but when you suggest putting a few grand a month into online brand marketing, something that is measurable at more of a micro level even, their initial reaction is "how many leads will it generate?" or "how many more cars will I sell?"

This is beginning to change in the auto industry. Generating leads is certainly an important part of any dealers' Internet marketing strategy but the more search engine marketing and social media marketing continue to be a factor in giving dealers opportunity for additional business, the more common it will become for the Internet to be accepted as a haven for brand marketing too.

In fact, search engine brand marketing could very well be a secret sauce for true new car sales online where car dealers shed the idea of being DEALERS and welcome the idea of becoming RETAILERS.

Can you say, "e-commerce"?

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Ryan Gerardi

In the offline world, car dealers advertise to:

• sell cars today
• support their local community
  • brand
  • awareness
  • goodwill

Online, what happens?

Sell cars today - buy leads, websites with form submissions, landing pages, all take care of this.

SEO, SEM, PPC, blogging can all help with awareness, brand and goodwill... the equivalent of things that "retailers" do to build and maintain their name without any direct expectation of sales or in this case "leads."

How many dealers are ready to do that? Are that prepared to invest in the success of their dealership on the Internet?

Often Internet Managers make such decisions / such spending comes out of their budgets... how prepared are Internet Managers to divert their budgets to something that doesn't necessarily generate "leads"?

Are car dealers ready to truly use the Internet for retailing? Brand advertising? Is this something they should do at the dealership level? At the district marketing association level? At the national level? At all levels?

Is how car dealers feel about their advertising goals going to change if they add a true ecommerce / shopping cart experience (such as is available from my company Ai-Dealer to their web strategies... In this case, shopping cart ecommerce = letting consumers buy cars online from them without coming in to the showroom (i.e. a buy direct model / true click and mortar strategy)?

Essentially does having a more relevant reason / engaging process to point consumers to raise the level of importance to Internet advertising?

Does it go up when the tie in to sales results goes up (in some of our stores 50-60% of the consumers who give their email address to create and account and enter the shopping cart end up buying a car from the dealer with the shopping cart)?

Ryan makes a great point that dealer's spending on the Internet is today highly concentrated around "buy this car today by inquiring." It will be quite interesting to watch what happens as the market matures.