automotive

Dealers Need Dollars For Digital

To sell cars at the bottom of the funnel, you need to be able to free up money fast to focus on mobile and digital. That means at the regional, dealer-group level, where the figurative rubber hits the road, and where a lot of those dollars come from the co-op cash box funded by both dealers and the OEM.  

Netsertive, a digital marketing technology company, has a new study that suggests — wait for it — there is a bit of a disconnect between dealers and manufacturers. Well, okay, that’s not news. The actual news is that there might be some special contretemps over how co-op media dollars are spent: maybe there’s a big too much focus on traditional media. 

First of all, the report — “Optimizing OEM Dollars for Video and Mobile Marketing” — prepared with marketing research firm Borrell Associates, finds that while co-op ads account for over 50% of marketing budget (and dealers leave almost none of it in the pot), and 65% of the dealers polled say the OEM relationship is “complex.” Forty-three percent consider it “frustrating,” because, while the co-op cash process might not be the U.S. tax code, it feels like it with too many rules, restrictions and general strings attached. And results in too much paperwork.

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Says Tim O'Rourke, VP of Automotive at Netsertive, based in the N.C. Research Triangle area, “We are looking at $6.5 billion worth of marketing dollars; OEMs could do better making the process simpler.” 

He tells Marketing Daily that while both the OEM and dealers obviously want a steady flow of leads, whether from walk-ins or Web traffic, there is a digital divide between automaker and the dealer body on how to prime the pump. The report says dealers are the ones driving digital, with 90% of dealers buying online media via co-op programs. Three-quarters of dealers are spending against paid search; over half on non-paid search, display and targeted display; and over half on retargeting. 

But while traditional broadcast spend from co-op funds is declining in favor of digital, automotive manufacturers say they still favor traditional media for promoting their brands, with tv still key. Netsertive says a third of dealers expect to decrease their spend on traditional television advertising in favor of digital video, while only 15% expect to spend more on broadcast television next year. 

Says O’Rourke: “The OEM is still thinking newspaper and TV, leading them to traditional media. But my observation is that consumers lead the way, and the dealer is closest to the consumer.”  

The study also finds that while two-thirds of dealers feel mobile advertising is important to their co-op marketing efforts, and 57% put mobile media among their top three most effective marketing strategies, fewer than a third of manufacturers provide co-op support of mobile.

And while 65% of dealers use mobile-optimized Web sites, and 57% use mobile search advertising, 68% of dealers consider their use and knowledge of mobile advertising to be just competent or neutral. Well over half of dealers use video in online advertisements, but just over a third of manufacturers support the use of digital video with co-op funds, according to the report.

O'Rourke argues that one way to close the gap is for there to be a standard of what mobile actually means; same for digital video. “A completely mobile friendly Web site is part of it. And about a quarter of dealers said they know their Web sites are not mobile optimized.” That, he says, may be one good reason for manufacturers to hold back on mobile-media co-op dollars. “If you are investing toward mobile marketing that drives traffic to your site, a site that is impossible to navigate, you have are wasting money.”

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