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Clicking Outside the Box

October 2009, F&I and Showroom - Cover Story

by Justina Ly

As more consumers turn to the Internet to research vehicles, financing and other dealership-related services, many dealers are scrambling to find their place in the uncharted waters of online marketing.

There is much to gain for those dealers who take chances with this burgeoning marketing channel. Dealers can achieve brand recognition, generate leads and drive customers into their dealerships. The online marketing revolution — a shift toward using Web-based communication and marketing tools, such as online video and social-networking sites — is driven by two catalysts: the recession and consumer media consumption habits.

“Necessity is driving a lot of energy around these requests for changes,” said Justin Oesterle, a sales and marketing executive for RouteOne. “When there’s lots of revenue flowing around, you can hide some inefficiency problems. When revenue goes down, you need to figure out pretty quickly where to make the right kind of investments.”

And with the economic downturn forcing many dealers to search for ways to reduce costs and streamline processes, investing in new tools may seem counterintuitive in an economy like today’s. The truth is, putting in a little time and money now may prepare dealers for future success. In addition, many of these newer forms of technology cost little or nothing to implement.

“We know that there are a lot of different mediums out there and people prefer different things,” said George Grubbs, a third-generation dealer and executive manager of Grubbs Infiniti in Dallas. “We want to try to reach everybody at their preferred method of communication. That’s why we’re not afraid to try all of these different things.”

To promote his dealership, Grubbs uses YouTube videos, a Twitter feed, microsites and a mobile marketing tool to advertise his inventory. Grubbs and his staff create YouTube videos entirely on their own — from creating the concept and storyboarding to filming and editing. “We’ve done it in-house,” he said. “After the first video, the second and third didn’t take nearly as long because, by then, we knew what we were doing.”

Using these various forms of electronic media is akin to taking multiple shots in the dark, but Grubbs embraces Web-based technology and believes it helps him capture his customers’ attention. “If someone is hesitant to invest in something like this, they’re going to get left behind, because this is obviously the next direction for finding information and communication,” he said.

Tracking Media Consumption Habits

Grubbs’ observation is backed by research showing that consumers are moving beyond television, newspapers and radio, as many are turning to Web-based technology, such as smart phones, video platforms and social media, for information and entertainment.

According to comScore Inc., a digital marketing research firm, there were more than 20 million smart phone subscribers as of November 2008, and they contributed to a 34-percent increase in Web browsing last year.

ComScore also found that online video viewing accounted for 12.5 percent of Americans’ total time spent on the Internet in 2008, up from 8.5 percent in 2007. YouTube, which held 40-percent market share in November 2008, generated 5.1 billion video views that month, a 74-percent increase compared to the year-ago period.

Social media, such as social-networking sites and blogs, also continued to gain importance, according to comScore. The research firm found that Facebook’s visitor base grew 57 percent to 54.6 million visitors in 2008, while Wordpress, the largest blog publishing platform, jumped 64 percent to 24.2 million visitors. And based on the Experian Simmons Fall 2008 New Media Study, the fastest-growing new medium is the social-networking site. Fifty-four percent of adults visited a social-networking site within the 30-day study period, an increase of 270 percent from the year-ago period.

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