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.
Justin Gasman, a F&I director in Boulder, Colo., created a Facebook account for his dealership six months ago in an effort to build brand recognition. He said Facebook offers an easy and inexpensive way to advertise, although it requires some administrative effort on his part. “I’m sort of a one-man band,” said Gasman, who posts pictures, videos and dealership-related information to his dealership’s Facebook page, and monitors e-mails and friend requests.
“I figure there’s no harm in building up that friend — or customer base — on Facebook,” said Gasman. “The worst thing that’s happening is your name is getting in front of hundreds of people everyday.” His efforts have paid off, as the dealership’s Facebook page now counts more than 500 friends.
“The investment is time,” he explained. “I equate Facebook with putting money in a 401(K) or IRA. You don’t really know where it’s going to go or how it’s going to turn out, but everybody in business is getting connected with social-networking sites. That seems to be the trend.”
Technology Providers Adjust to New Media
The shift in consumer media consumption is also affecting the way technology providers develop products for dealerships. New Web-based products such as microsites and mobile marketing tools are slowly making their way into dealerships, changing the way dealers market their inventory and interact with consumers.
“There’s a clear recognition that dealers need more sophisticated tools,” said Brian Pasch, CEO and founder of Pasch Consulting Group, a New Jersey-based marketing firm. “How do you differentiate yourself? You have to have new tools.” Pasch’s firm specializes in creating microsites, a Web-based marketing tool for dealerships to promote their inventory, F&I products and other services. Microsites are different from a dealership’s primary Web page because their content is optimized to achieve multiple page views and reach the top of a search engine’s rankings. A few months ago, Pasch created a successful “Cash for Clunkers” microsite for a Massachusetts dealer, which received 60,000 to 70,000 page views and became the No. 1 search result on Google.
In addition to generating page views, the purpose of microsites is to educate consumers about a dealership’s vehicles, products and services. The hope is that these sites will drive customers in to the store. “In recent months, there has been more interest from dealers who are looking to add profits to their fixed-ops,” Pasch said.
Mobile marketing technology is another Web-based tool that uses the versatility and convenience of smart phones. Several product providers, including Web2Carz.com, Cobalt, Dominion Dealer Solutions, and Gambit Mobile, have created mobile applications that present a dealership’s inventory to consumers and allow them to contact a dealer via e-mail or phone.
Web2Carz.com, an Illinois-based online car shopping site, has a mobile marketing program featuring one million new and used cars from more than 10,000 dealers. Each listing shows a vehicle’s price, image, description and a Carfax report if available.
“We have a philosophy that we’re in the business of getting eyeballs to a dealership’s inventory,” said Alex Bravy, co-founder and vice president of business development for web2carz.com. While his company’s program targets tech-savvy consumers, he admits that Web-based technology is changing quickly and transforming the car-shopping process.
Texas dealer Grubbs is seeing that transformation firsthand with his mobile marketing tool, called Cobalt Mobile. On average, it delivers about 700 leads per month. He isn’t able to track how many of those leads have resulted in actual sales, but said consumers have contacted the dealership. “They’re definitely hitting the link to call (the dealership) from the mobile site, and I’m also getting a lot of hits to the map,” he said.
Grubbs believes that using these tools helps him build credibility and trust with customers. It also gives him a leg-up on his competition. “Well, just like any kind of advertising, you have to invest ahead of time to see the return,” he said. “We have to embrace it and we have to try to be ahead of the game.”