• by Karl Greenberg , March 11, 2008

When automotive dealerships started hiring Internet sales staff early in the millennium, their efforts were focused on basic Web pages, display ads and links to automakers. Now, dealership Web marketing has, in some cases, gotten nearly as sophisticated as what their corporate brands are doing.

According to media and marketing consultancy The Kelsey Group, dealers have grown their Internet savvy to live banner advertising, social media efforts, rich media, search engine optimization and a host of other tactics.

Princeton, N.J.-based Kelsey Group polled dealers via an online survey last month. Seventy-one percent of respondents said they were the dealership's owner, principal, vice president or general manager.

Fifty-nine percent say they plan to use Internet video on their own Web sites during the next 12 months versus 33% who do it now. Over that period, the percentage of auto dealers using customer ratings and reviews will rise, from 29% to 43%, and the percentage using social networking sites will rise, from 15% to 33%.

Auto dealers are putting more of their marketing dollars online as well. Per the firm, 62% plan to increase online media spending in the next 12 months, versus 17% who say they will do so in traditional media. Forty-six percent of dealers will decrease spending on traditional media, while only 8% will decrease online spend.

Steve Marshall, Kelsey Group's director of research and consulting, says dealers who are creating their own Web video content rather than repurposing national or regional ads for the Web are becoming increasingly independent in making online-media buying decisions.

"The data show the emergence of specialized Internet media buyers at dealerships," he says. "It's not a large number yet, but in our survey we have found that in 9% of dealerships, online media buying decisions are made by the Internet manager." By contrast, he says, buying decisions for traditional media are made by a dealer principal or sales manager.

Also, says Marshall, auto dealers are doing more diverse marketing activity online. "We identified seven different types of online marketing from the survey: purchase of keywords, pay-per-lead, e-mail marketing, listing on Internet yellow pages, search-engine optimization, online classifieds, and display and banner ads," he says.

Dealerships are also doing increasingly sophisticated banner-ad executions. "Dealership banner ads used to be very simple: there was a banner and you clicked on it and it took you to a dealer's web site. But increasingly we are seeing real-time inventory being included in the banner itself. That is one manifestation of web 2.0: smart, rich real-time banners. Basically, we are seeing not only greater use of online media but ads that are much more robust, much richer, more 'real'. "