Dealers Need to Get in the Online Game

by Ernest Esch, Dec 11, 2002, 12:00 AM

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J.D. Powers and Associates reported in early October that an estimated 82% of new-vehicle buyers visited third-party automotive sites in 2002, while 76% visited a manufacturer website and 48% visited dealer sites.

"The clear opportunity for providers is to turn online researchers into online buyers," said the report. "With just 4% of new-vehicle buyers currently using the Internet as a purchasing tool, there is tremendous room for growth for online buying services that provide customers with the detailed features they're looking for."

Not necessarily.

No matter what kind of "detailed features" a buying service site provides, it will not make consumers use the Internet as a purchasing tool if they are not inclined to do so. If 82% of consumers are visiting auto sites, but not doing anything (transactional) once they get there, that tells me that 4% might actually be a high water mark, not a big opportunity!

What the Powers data does suggest is that there is a huge opportunity for dealers to learn how to effectively use the Internet to reach consumers who are researching, but do not want to buy online. Since dealer website traffic is up, consumers are already showing a predisposition for online dealer information, but dealers can’t rely only on traffic to their sites, they need to create a larger presence on the auto information sites where the potential buyer is doing his/her research. They won’t be shooting fish in a barrel, but they will be fishing in a much larger pond.

How might dealers best increase awareness among online users?

Banner ads have taken plenty of lumps since the Internet ad industry crashed two years ago. While it may be true that a static banner is not as compelling as a rich media banner, if properly designed and placed in an appropriate context, banners can still be viable for advertisers. Given their low cost to produce and distribute, their ROI, in fact, can be very attractive.

According to a recent issue of Business Weekly, "better technology is allowing advertisers to bring greater creativity to the computer screen than was not possible just a year or two ago, when annoying pop-up ads were the hot thing. Now, sites carry snazzy ads featuring clever graphics, such as images of Budweiser beer flowing out of a bottle into a glass or an Acura zooming across the screen."

Using Acura as an example is entirely appropriate since, according to Cyberatlas.com, "auto manufacturers' rich media accounted for 37.5% of all of the industry's ad impressions during the second quarter of 2002 -- nearly 10 times the 3.9% average across all industries."

Rich media has dozens of creative possibilities including full motion video and audio. Not long ago, video of clips of musicians singing classic rock songs about Chevy’s were seen by 120 million people in 24 hours as EyeWonder technology was used by Yahoo! to stream the most rich media impressions ever in a single day.

Rich media is perhaps even more important to auto dealers than national advertisers since local dealers need to display product and price with urgency to create showroom traffic. A dealer has no time for branding. "Let me show you what I have for you to buy - TODAY." That cannot be done in a normal ad banner unit, there simply isn't enough space. However, it can with technology like Point Roll, which offers ads that expand when the cursor moves over them.

Could this be the beginning of "display" advertising on the Internet, similar to the way newspaper ads progressed 100 years ago? Perhaps rich media that grew from a simple banner ad is the same as a full page spawned from a classified liner ad.

One point of caution for dealers who may start cranking up their art departments: online ads are only effective if they are placed in the correct context for the consumer. A Toyota Camry at lease for $250 per month will draw little interest on weather.com, but would get tremendous response on the Toyota Camry invoice page of Edmunds.com or NADAguides.com.

Bringing the dealer ad information to the consumer will actually take a partnership of three industries; Online Ad Technology, Automotive Sites and the Auto Dealers themselves. It hasn't happened yet and it is not because these industries don't want to work together -- they just have their focus elsewhere. The technology companies' bread and butter is national advertising, not the 20,000 member dealer body. The automotive sites have perfected the email/lead model and know that selling advertising is an expensive business to charge into. Auto dealers have also developed a comfort zone with leads and their Internet departments, and are not shifting ad budgets from traditional media.

Waiting in the wings is the online auto consumer, almost saying to the respective parties involved "when you get your act together, I'll be here to respond to your advertising just like I've done before when you figured other media out. Give me your best advertisement when I'm doing my research and I'll probably go to your dealership -- if it's a good deal."

That's when the real negotiation happens, but that's for another time.

Ernest "Skip" Esch is Director of Sales & Strategy at the Local Advertising Sales Division of Jumpstart Digital Marketing, Inc. He may be reached at skip@jumpstartdm.com

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