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Digital Battlegrounds

February 2010, F&I and Showroom - Cover Story

by Justina Ly

For Chris Carlson, the battle between his Torrance, Calif., Honda store and the dozen or so dealerships located within a five-mile radius is waged online on a daily basis. On this battleground, having an effective online advertising campaign can be the difference between winning and losing.

“The hurdle we face now is the fierce competition. I’ve got five Honda dealerships within 15 to 20 minutes of me,” says Carlson, the sales and marketing manager for Scott Robinson Honda. “But by the same token, the competition has kept our numbers rolling because we’ve done more to be seen and found.”

Armed with an average monthly budget of $40,000, Carlson reaches his customers through the dealership’s Website, microsites and social-media outlets. He also has a blog, and manages the dealership’s Facebook, Twitter and YouTube accounts. He’ll even employ banner ads, video clips and press releases when needed. And while he doesn’t use any television or radio ads, he’ll occasionally run a newspaper ad to round out his strategy.

Name: Chris Carlson

Title: Sales and Marketing Manager

Dealership: Scott Robinson Honda

Location: Torrance, Calif.

Average Monthly Ad Budget: $40,000

Type of advertising: Internet and occasional newspaper

“I think all the Internet has done has made a customer a more educated customer, and I think that’s a good thing,” he says. “You can’t run from the inevitable; every customer is an Internet customer.”

Carlson’s use of the Internet isn’t unique. In fact, with marketing experts saying the Internet will have the same impact on marketing strategies as it did for all areas of commerce, dealers across the country are attempting to get their fingers around this new marketing medium. Experts warn, however, that expectations need to be managed, especially when it comes to the Web 2.0 craze.

Next Big Thing or Bloated Expectations?

In a Deloitte survey released in January on how the auto industry connects with the tech-savvy Generation Y, results showed that although social-media sites and blogs have become the preferred mode of communication for this age group, it does little to sway purchasing decisions. In fact, nearly 60 percent of Gen Y respondents said they do not seek out advice or information on blogs or social-media forums before purchasing a vehicle. What they do turn to, however, are online search engines and manufacturer Websites.

Experian Hitwise’s January trend report on the top search engines showed similar results. The online intelligence service revealed that automotive was one of six categories to experience double-digit growth in the amount of traffic flowing from search engines between December 2008 and 2009. Accounting for 72.25 percent of all automotive searches, Google led the way during a four-week span ending Jan. 2.

Coming out of a year where dealers spent 23 percent less per month on advertising, according to Mudd Advertising, it’s clear why online advertising is all the rage among marketers. However, some experts warn not to ignore the branding power offered by traditional mediums, such as print, radio and TV advertising. The strategy that works, marketers say, is one that meets consumers on their own turf.

“A very small portion of the population is going to be in the market at any certain time, so why do you want to talk to everybody?” says James Bell, an analyst for kbb.com. “You just want to talk to those people that are interested in consuming your product.”

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