Developers of an online multi-listing solution that would allow bids on vehicles offered at various auto auction websites say they are making progress on finally bringing that project to fruition – almost certainly by the end of the year.
Manheim President Sandy Schwartz said that some players in the auto auction business had questioned why the company would want to be involved with a so-called “multiplatform” solution, considering that it already has the most cars and is, by far, the largest of the auction sites.
“My feeling is that’s what business is for, in the end,” Schwartz said. “I don’t mean this to be at all arrogant, but let the best man win. If we’re the ones that can sell that car, we should be able to sell it.”
Schwartz told attendees at the recent National Auto Finance Conference in Fort Worth that his company and the other platform developers would meet with the U.S. Department of Justice to allay any concerns that the solution would chill competition.
The Manheim executive said the technology is currently being built, and told the Texas audience that he’s really hoping a working model will be online by the third quarter this year.
At the latest, Schwartz said, the model should be good to go by the fourth quarter.
That means that by the first of the year, there will be a multiplatform bidding solution where buyers can look at most wholesale cars available (SmartAuction is not participating in the project).
“Who is selling it shouldn’t be important. What should be important to you is, ‘Is this a car I would buy in a live bidding?’” said Schwartz.
Joe McCloskey, owner of Colorado-based McCloskey Motors, said that if the platform enables vehicles from multiple sites to be purchased in one place, the site could bring some much-needed simplicity to the auction process.
“One-stop shopping would be great,” he said.
Skepticism about the site remains among many in the industry, but that didn’t dampen Schwartz’s enthusiasm in Fort Worth.
“I would just tell you, it’s not easy to get Manheim, ADESA and all the independents aligned,” he said. “But we are really focused on this moving forward and are the biggest proponent of it.”
When most people think about auto marketing and advertising, television and print media generally come to mind.
But the Internet has opened an expressway for consumers, and that means it has opened a new route from the automobile industry, including dealers.
“The recent Automotive Buyer Influence Study found that 70 percent of car buyers used the Web as a research tool before making their purchase,” writes columnist Ben Richardson in “Content Marketing” online at the website, Business 2 Community (B2C).
In his column, “Checklist for Smart Content Marketing in the Automotive Industry,” Richardson notes that those buyers whose shopping habits are reflected in the study spent nearly 20 hours online doing research. Then he wonders, “If Web users are spending that much time browsing the Internet for car-related information, wouldn’t you want the majority of that time to be spent with your content? If so, it’s time to start developing a content strategy!”
It’s a good question with a response that echoes decisions made in other industries.
The automotive industry’s content strategy should leverage online opportunities, including video, appropriate social media profiles (including Facebook and Twitter), creative blogging and informative guides for consumers, according to the columnist.
Here are excerpts from Richardson’s column: Video – “Because the automotive industry is so visually driven, your content marketing strategy should also have a big visual focus. You may not have [a big] budget to create an advertisement, but that doesn’t mean you can’t be creative.” Social Platforms – “Social media platforms are proving to be even more popular for the automotive industry than video. While the automotive industry isn’t making any sales to speak of from their social media presence, they are generating excitement and product interest.” Blogging & Guides – “Great blogs and lengthy, informative guides can be really useful tools in your content marketing arsenal. … Your blog (and overall content strategy) should focus more on valuable, car-related information.” But don’t “speak like a corporation.”
The significance of Richardson’s advice is underscored by comments from more than a year ago on Search Engine Watch by Frank Watson, CEO of Kangamurra Media:
"For all vehicle buyers, the Internet is undoubtedly the most heavily used and the most inﬂuential channel. Today, 71 percent of consumers use the Internet while shopping for new and used vehicles, more than double the usage of any other information source. [And] the majority of buyers said the Internet was the most inﬂuential source leading to their purchase decision.”
For years, car dealers and lenders have been playing a chicken-and-egg game with e-contracting, a process of fulfilling car sales and funding electronically, instead of via fax and courier.
Dealers have said they are in favor of the technology, which lessens waiting times for loan fundings and streamlines the loan-application process, and are looking to lenders to push the process. Lenders have said they are in favor of the technology, but are waiting for dealers to ask for it.
The main sticking point to mass acceptance of e-contracting in the auto finance industry is dealer comfort with automating what has always been a paper-intensive process. For those that have embraced the change, there is no looking back.
FUNDING IN HOURS, NOT DAYS
It’s been about a year since Lia Infiniti of Latham, N.Y., purchased and installed its e-contracting system. During that time, John Greenhut, the dealership’s finance director, says the dealership has been able to streamline the application process, eliminate duplicate entries, and achieve quicker funding for customers. The learning curve was easy, says Greenhut, who now “gets funded in a few hours, instead of five days.”
Currently using the system for Infiniti purchases and leases, and for loans made through a national bank’s indirect auto finance unit, Greenhut says he wishes more lenders would get on board with e-contracting.
To streamline at least some of its auto loan processing, Lia Infiniti relies on a computer-driven delivery system that uses Electronic Retail Installment Sales Contracts (ERISCs) in place of paper-based Retail Installment Sales Contracts (RISCs). The former contain the same disclosures and are formatted like their paper cousins, but are looked upon as more “secure”since they cannot be altered once car buyers sign their names using a signature pad.
With e-contracting, those long contracts and fax machines become a thing of the past as the “application” is distributed to multiple lenders who, in turn, send back their financing offers. Developed by companies like DealerTrack and RouteOne, e-contracting is being slowly adopted by dealers and lenders nationwide.
But for every dealership that’s willing to forgo the paper and take the electronic route, there are many more that have steered clear of this new approach to financing. “I think dealers are scared of it,” says Greenhut. “It’s like someone coming in and saying that they’re going to install computers in an office where they’re still using adding machines.”
CUSTOMERS CAN’T TELL THE DIFFERENCE
Yet customers hardly notice the difference between electronic and traditional contracts, except for the fact that they’re signing a little electronic box, says Greenhut. “I present a review copy to them, and once they agree to all the figures and terms, they simply sign the box.”
Bill Seidle’s Nissan in Miami was an early adopter of e-contracting back in 2004. Spurred by F&I Manager Andrea Forteleoni, who was on a mission to streamline the application process and reduce paperwork, the dealership saw the emerging technology as the “wave of the future,” despite the fact that many other dealers were wary of it at the time.
“People look at new things suspiciously, and the seasoned professionals who are used to doing things their own way don’t always welcome new technology with open arms,” says Forteleoni, who admits that e-contracting has both upsides and downsides. On a positive note, it speeds lender-approvals, enabling customers to receive their first statements in plenty of time for payment.
On the other hand, human input errors can bungle the sys- tem and create problems. “On my wish list for e-contracting is some type of computer check that ensures that the parameters, rates, and rate spreads” are inputted correctly, says Forteleoni.
As the business world strives to go paperless, expect to see even more dealers and lenders using e-contracting. “Once manufacturers like Toyota and Honda go into it in a major way, the dealers will be more apt to join in,” says Forteleoni. He adds that the overall consensus is that e-contracting will be fully developed in five years, although he predicts a shorter timeline. “The technology is there, it’s a just a matter of training and expanding the possibilities.”
“You can’t take a salesperson from the front of the houseand tell them they’re going to now sell cars online,” because the dynamicsare so different. – John Foley, President, izmomedia
Dealers know that most customers research their car purchases online before buying. To some that may seem a risk since it adds more competition to the mix. But many dealers use the Web to lure and capture buyers by using virtual inventories.
John Kimel, who heads the Internet sales department at Lewis Motors in South Burlington, Vt., says he’s heard that as many as 95 percent of car buyers check online before they buy a car. Lewis Motors put a virtual inventory on its Web site five years ago, and kimel says it’s been a boon for business. “If you don’t have a good Web site and you’re not showing everything you need to be showing, such as inventory, specials, and your finance rates, you’re just telling people ‘Don’t bother shopping here,’” Kimel says.
Helping Small Dealerships Look Big
At the most basic level, virtual inventories simply show every car that’s available on a dealer’s lot, with automatic nightly updates from the Dealership Management System (DMS) as cars come in or are sold.
But virtual inventories can go further and show all makes and models that are available, with data updated directly from car manufacturers. These expanded inventories create an opportunity for small dealerships to gain customers, says Andy Flint, national sales executive with Tk Carsites, which creates Web sites with virtual inventories for dealerships.
“If somebody is on the Web site looking for a specific vehicle, if you don’t have it, they’re simply going to move on to the next Web site, so you’ve lost a potential client,” he says. By displaying all makes and models, many of which can be ordered, dealerships are not limited to selling whatever is currently on hand.
Virtual inventories help small dealerships compete with large dealerships without having to spend enormous amounts of money, says John Foley, publisher of izmomedia, which also builds virtual inventories and dealer Web sites.
“The first thing you have to do is get the dealer to realize that by creating an online store, he is actually opening up a new dealership. The difference is he doesn’t need land.”
“Hi, I’m Your Web Salesperson”
Foley explains that dealerships need to understand the difference between selling a car online and selling one in a showroom. “You can’t take a salesperson from the front of the house and tell them they’re going to now sell cars online,” because the dynamics are so different, he says. Izmo also offers sales training to help dealerships take advantage of Web-based opportunities.
Mark Heer, general sales manager at Sonnen Porsche in Mill Valley, Calif., says that having a virtual inventory helps sales. Sonnen’s virtual inventory has been active since the dealership opened in 2002.
Virtual inventories are also lead-generation tools. Flint says that individual Web products start at approximately $100 per month, with full packages ranging from several hundred to several thousand dollars monthly, depending on variables such as the number of brands being sold. Getting sites up and running does not require extensive technical know-how; ‘off the shelf’ software can be plugged into the DMS and running in three business days.
Online inventories help dealers generate leads and compete for customers who are researching their purchases online before they buy. “People’s buying habits have changed, and that means our selling habits have to change,” kimel says. Putting a virtual inventory in place can help dealerships make that transition.
RouteOne and DealerTrack are certainly not strangers to the auto industry, but that does not mean every dealer knows all the ins and outs of the Web-based credit application management systems.
Todd Anderson, financial manager at Holland, Mich. based Elhart Dodge Nissan Hyundai, uses both DealerTrack and RouteOne, but no specific features or updates stand out to him; he is “just using them to send in applications.”
Anderson is certainly not the only financial manager to use the systems just for credit application purposes; however, other functionality certainly exists.
One of the most important products DealerTrack offers is its compliance suite, says David Trinder, senior vice president of network solutions at DealerTrack. A Red Flags Rule solution was added to the suite earlier this year.
“Every single dealership needs to show they are Red Flags ready,” Trinder says, noting that this includes not only going through certain actions but also putting a policy into place. “We show them what a policy should look like.”
Dealers realize the tool’s importance too; the compliance suite is one of DealerTrack’s fastest-selling items.
One dealership utilizing the tool is the Luther Automotive Group.
The St. Louis Park, Minn.-based dealership group is still rolling out the Red-Flag solution, but already it is proving valuable, says Duane Brinkman, director of compliance. “At this point in time, we are pleased,” he says.
What Brinkman would like to see from the tool is not finance- transactions flags, but flags for other transactions, too. An addition of a note section would also be beneficial, he adds.
Real-time market pricing for InventoryPro is one of DealerTrack’s latest updates, which allows dealers to see how local competitors price their vehicles. The product lets dealers “look at a vehicle and see what it is selling for at the auction,” Trinder says.
Bill McMorris, director of remarketing at Jim Ellis Volkswagen of Atlanta, applauds InventoryPro, especially its real-time functionality. The tool gives the several dealerships in Jim Ellis Volkswagen a “tremendous advantage” by helping them determine how to price their vehicles. In particular, it really helps with their online car stock, he says, noting this is because 80 percent of the people shopping the Internet for vehicles search by lowest price. Using InventoryPro allows Jim Ellis to price their vehicles accordingly so they can come up on top of a Web search. McMorris says DealerTrack is great at incorporating customer feedback into its product, too. “They really do listen,” he says. “They follow up on what they say they are going to do.”
RouteOne rolled out its version 8.9 release last September. Among the enhancements is the addition of Kelley Blue Book vehicle values in the United States. RouteOne also added Payoff Quote, which allows dealers to request a payoff with their lenders. Dealers can use the tool only with lenders who sign up for it.
“Payoff Quote would be spectacular if all lenders were on there,” says Tom King, finance manager at Ray Laethem Pontiac Buick GMC. King doesn’t think it is possible to get all banks to do this from what he understands.
Although the Detroit-based dealership mostly taps RouteOne for credit bureau information, it also utilizes some of its other features, like Adverse Action. Adverse Action allows dealers to search for applications that may require Adverse Action notices, and then automatically creates those notices. When a customer is turned down for credit, King says Adverse Action helps deal with the ensuing compliance issues.
King would like to see RouteOne offer a lease linking tool, but is happy with the service overall. “RouteOne is the only place you can get captive finance with everything else,” he says.
In particular, King likes how interactive RouteOne is with its customers. RouteOne asks for feedback, and reacts to it well, he says. “This is how they are distancing themselves,” he says.
RouteOne is pushing its eContracting offerings, says Brad Rogers, vice president of operations at the technology company. RouteOne’s eContracting adds electronic processes to paper-based contracting. Currently, the solution’s footprint includes seven states, 134 dealers and three captives.
Orlando, Fla.-based Greenway Ford is using eContracting. David Stone, director of finance, says one of the biggest benefits of eContracting is its electronic funding feature, because eFunding, as it is called, “probably saves us funding.”
Stone says Greenway Ford works with both Ford Motor Credit Co. and RouteOne to try to discover any errors in the application process, before the mistakes prevent funding.
Stone says he sees recent improvement in the RouteOne product. RouteOne is working on adding new features to and refining its platform. In October, the company launched an identity-verification product. Says Rogers: “Identity theft is so big.”
The tool, devised with TransUnion’s help, will help dealers comply with the new FACT Act Identity Theft Red Flags Rule. This rule mandates that financial institutions and creditors establish written, identity-theft-prevention programs.
The ID tool itself provides warnings of potential fraud by generating a score on whether or not a customer is “high risk.” Then, it generates out-of-wallet questions for triggered applicants, asking questions such as “What street did you grow up on?”
Knowing what is trendy is a skill fashionistas possess. Dealers, however, need a little nudge. To help, inventory management systems are serving as their stylists, ensuring the hottest vehicles are on dealers’ lots, set at the right prices. And as financing dries up and the recession blossoms, the technology is gaining traction. “Given the big adjustment with the market, dealers are painfully aware that they need something,” says David Nelson, senior vice president and general manager for FirstLook’s Elite Ops Division, a company that offers such technology.
FirstLook views its products less as inventory management systems and more as retail solutions. Consider its product, Retail Performance System. In addition to inventory management, the tool handles processes like appraising, pricing, merchandising, stocking and Internet advertising. The products emphasize best practices in a repeatable, fast way, reinforcing “everything they learned in used cars 101,” says Nelson. “Some dealers suffer from delusions they were doing it all along.”
Todd Crabtree of Houston, Texas-based Jeff Hass Mazda has used FirstLook “forever” and is very pleased with the company’s products.
The Bob Baker Auto Group in Southern California chooses to use AAX and vAuto at some of its shops to manage inventory. “I look at it as a return in an investment,” says Mike Baker, chief executive officer. “It’s not an expense as much as an investment.”
Baker notes the technology is only worthwhile if dealers understand the intricacies of the system, and encourages them to use the tool. He adds that without it, purchasing decisions are simply fly-by-night.
“There are deficiencies within the system,” Baker says. For example, the technology doesn’t account for a sudden major drop in gas prices, which means dealers boast extra economical cars on their lots. DealerTrack, which offers dealers AAX, PriceDriver and InventoryPro for their inventory management needs, says the technology’s popularity is growing. “We are seeing more interest with dealers managing their pre-inventory,” Tim Zierdan, vice president of inventory management solutions at DealerTrack, says. “Our technologies start to help. We help make them make better buying decisions.”
Lafayette Ford uses AAX, for one. The Fayetteville, N.C.-based dealership has used the product for the past three years and is very pleased with the technology. AAX is very “complete, user-friendly, and effective,” says pre-owned sales manager Johnny Godwin.
The dealership also uses the tool for appraisal, which is Godwin’s favorite feature. AAX allows the dealer to enter a VIN number to see its market value from Manheim’s auction prices or Kelley Blue Book, for example. “It gives a wide view of what is going on with a car that particular day,” says Godwin.
VinSolutions is the inventory management tool Springfield, Penn.-based Rothrock Chevrolet Lotus opts to use. “I like [the system] because it is userfriendly,” says Andre Johnson, general manager.
Dealers are also getting new options as players such as Mirror the Market Inventories enters the market.
The Web-based inventory management system includes features like comparing the dealer’s sales to actual registration data for its market. This data can be compared using zip codes, counties or a mileage radius from the dealership. This, in turn, lets the dealer see what the hottest vehicles being registered by make, series, model and mileage are.
Another feature the system boasts is an ordering tool, which makes recommendations to dealers about what vehicles to buy based on previous sales. “I have never seen anything like what I’m experiencing today,” says Tim Monaghan, president. “It’s never been more important for dealers to control inventories because they are an acute expense. The more inventory a dealer has on his lot, the more he will spend on his floorplan interest.”
Love. College. Sweatpants. Not everything is easy to let go. For certain auto dealerships, fax machines make it on this hardtopart-with list, even though the devices are passé for sending in credit applications to lenders nowadays, with companies like Finance Express LLC, RouteOne LLC and DealerTrack Inc. offering dealerships Web-based technology to quicken the process, say industry insiders.
“I’m not aware of many dealers who communicate via fax to their lenders,” says Brad Miller, associate director of legal and regulatory affairs at the National Automobile Dealers Association.
The dealers who use the fax machine for this purpose are generally smaller, independent dealerships that align themselves with smaller lenders, says Michael Flashner, vice president of operations at Finance Express, a Web-based dealer management system exclusively designed for independent dealers.
“The larger lender is less willing to accept a faxed application,” Flashner says, explaining some lenders hover between the two schools of thought, and hire servicing companies to keystroke the data in from dealers’ faxes, eliminating the paperwork hassle.
St. Paul, Minn.-based White Bear Lincoln Mercury uses DealerTrack and RouteOne for its deals with banks, but continues to use the fax machine for transactions with certain credit unions.
“The major thing is to fill out the form properly,” says Dave Christensen, finance director, explaining that one unique nuance to the credit applications sent through the fax machine is readability. A typeface, for one, can’t be too light or dark.
Another difference between the two methods is speed, says Christensen, explaining Web-based systems are much faster. Like White Bear, Simms Chevrolet rarely uses fax machine for credit transactions.
“Most of our stuff is done online,” says Bruce Simms, owner and manager.
Gil Van Over, president and founder of gvo3 & Associates, which specializes in developing and implementing compliance strategies within the F&I and sales departments, says if an independent dealer only sells 15 cars a month, software like DealerTrack or RouteOne might make less sense than a fax machine; otherwise few dealers use this method. Streamlining the funding process is where transmitting faxes prevails, says Van Over.
“They use the fax machine to transmit stipulations to the deal,” he says.
Although there are some unique benefits to faxing in material, there are also inevitable concerns.
“One of the problems with faxes is [the credit application] would get there and the information wasn’t readable,” Flashner says.
The ineligibility stems from the handwriting or the fax machine cutting off vital information, he says, noting another headache for the lender receiving the faxes is a big pile of paper that could lead to missing applications.
Becky Chernek, president and chief executive officer at Chernek Consulting Inc., says credit applications sent through the fax machine hold a certain amount of sensitive data, like Social Security numbers, that could be compromised. “It is unfortunate, but the recession has caused a halt in training and having a better awareness of compliance and better business practices,” Chernek says, iterating that falling out of compliance is a consequence of happenstance. The upside of faxing in credit applications is the lender knowing how the dealer filled out the application and whether the consumer signed the credit application, explains Flashner. The compliance concern — knowing whether the data the dealer filled in is representative of the customer — is the same for applications sent with or without paper.
Given the copious amount of cars coming and going on auto lots, a dealer could easily develop a “Where’s Waldo” headache from keeping tabs on exactly which car is where.
To eliminate this burden, dealers enlist the help of transportation companies to handle the logistics’ details — and they are all the more important as remarketing heats up. Woodstock, Ga.-based dealership Hennessy Honda, for one, uses McNutt Auto Transport Service, Inc.
“They make it really simple,” says Jody Jarrett, pre-owned director at Hennessy, “We pretty much leave it all in their hands. It is just one less thing to worry about.” Once Jarrett receives a confirmation email for purchasing a Honda, for example, he forwards the e-mail to McNutt and “forgets all about it.” Although Jarrett feels safe leaving the details to McNutt, some used and new car dealerships want to interact more proactively with their transportation companies. To satisfy this desire, Mc- Nutt is refining the way its customers can track vehicles by rolling out an interface that allows dealers and carriers to track transportation business online. “[Our] trucker base can see all of our freight instantaneously, 24/7, and can dispatch themselves,” Tom McNutt, owner, says, explaining this should save time.
“We understand the only reason a purchaser buys a car is to sell it. Weunderstand he can’t sell the car until he gets it there. Once he sells it and turns it, this forces him to buy again. If we get that purchase to him quickly, it creates another job for us.”
To further simplify a dealer’s life, the national transportation provider is connected to GMAC’s SmartAuction, which allows dealers to access McNutt’s data through a portal.
McNutt isn’t the only transportation provider SmartAuction integrates withMeanwhile, Ready Auto Transport (RAT) will be announcing a new relationship with an auction by September, says Mark Jensen, chief executive officer. Ready Auto already has integrated with several online auction web sites, includingSmartAuction, Adesa’s DealerBlock, and Manheim’s OVE. Ready Auto provides real-time transportation quotes at these online auctions, with a goal to provide seamless order transportation services to dealers.
“Our plan was to enter agreements with auctions but not in the traditional sense,” Mark Jensen, chief executive officer, says. “We married our technology to Internet technology.”
The benefit for dealers from RAT, which boasts several online auction relationships, is centralization, Jensen says, explaining dealers can log ontoRAT’s Web Site, and manage all transactions within a single hub. To further help dealers, Jensen says RAT proactively alerts them to their cars’ whereabouts by calls, e-mails and online. Alerting the dealer to where and what source transported the car is one of the newer features clients see when logging into their accounts.
“You think they wouldn’t really care [about transportation] because it’s a messy part of business,” he says. “The truth is they spend a tremendous amount of time managing transportation.” — it also boasts alliances with Ready Auto Transport and AutoTransMart, a relationship that just developed at the end of July 2009. On its launch day, AutoTransSmart received 500 hits to its Web Site, says Steve Kapusta, director of GMAC Remarketing, labeling this a “resounding success.”
The “intriguing” part of AutoTransSmart is its quote model, says Kapusta, explaining the AutoTransMart will provide dealers with an immediate quote, and might offer dealers an even lower rate by holding a reverse auction where carriers bid to win a customer’s freight.
“[A buyer] won’t pay more, but has a good opportunity to pay less,” Kapusta says. GMAC began forming transportation alliances with third-parties several years ago as more and more dealers looked to buy virtual inventory, making immediate quotes essential, says Kapusta. He expects to keep the number of transporters linked up to the site limited to three. AutoTransSmart and McNutt are two of several transportation companies striving to create greater business visibility by
way of technology initiatives.
Insight Network Transportation, a Union Pacific Company, is also focusing on online efforts by launching an e-store to let its clients ship and track vehicles online. This effort, set to hit this month, benefits all of its clients, from dealer to auto auction by creating greater transparency into tracking activity, says Jeff Grandstaff, general manager.
“It is all about branding. The more that you are out there, the more branding you’ll get.” — Alvin Newton, Bob Baker Chevy Subaru
Dealerships are turning to social networking sites like Facebook and MySpace.
MileOne Automotive may help consumers rule the road, but the company is finding those car buyers on locations far from the highway.
MileOne which operates 65 retail automotive franchises, is using social networks like Facebook and MySpace to cultivate relationships with consumers, increase traffic to its Web sites, and lure in business. The short of it is social networks are becoming hot among dealers.
MileOne is at the forefront of this trend. In November, the automotive retail dealership operator took it one step further by creating its own social networking site called MyMileOne. com. The site allows customers to engage with them via blogs, videos, photos and sites like Twitter. The site also lets users play games and receive updates on discounts and specials, from MileOne’s 28 different manufacturers.
“We wanted a hub of stuff that would differentiate us from our competitors,” says David Metter, MileOne’s chief marketing officer. As it stands now, most of the traffic to MyMileOne.com is driven by them.
MileOne Automotive broke into social networking about a year and a half ago. Currently, YouTube generates the most traffic for them. “A customer will remember a video piece,” Metter says. Twitter is also a particularly valuable tool to engage customers.
MileOne Automotive is not the only dealership tapping into social networking.
The Kelsey Group reported earlier this year that more dealers are utilizing 2.0 advertising tactics and technologies. In its survey, 62 percent of auto dealers reported on planning to increase online media spending within the next 12 months, while only 17 percent of those surveyed reported to increase their traditional media budgets.
Bob Baker Chevy Subaru is one such dealership turning to Web advertising tactics. The California dealership puts videos up on YouTube and MySpace to further its brand awareness. The dealership also started a blog four weeks ago, headed by its Internet Director Alvin Newton.
Newton says that a common social networking misconception dealers have is that the sites will generate a lot of sales leads for them. “That is not the case,” he says. “It is all about branding. The more that you are out there, the more branding you will get.” Because of this, Netwon anticipates corporate-type web sites to fade in the future, with blogs taking the center stage. The Pasch Consulting Group specializes in search engine optimization and assists auto dealers develop their internet marketing strategies.
Owner Brian Pasch says since so many people spend a lot of time in front of social networking sites like Facebook or MySpace, dealers should utilize these sites to increase sales. “That would be an instant way of getting the word out,” he says. Using social networking sites is also cheap marketing. “I think it is the perfect time for it because everyone is looking to reduce their budgets,” Pasch says.
One of Pasch’s clients executing this method well is Tim Martell, director of eCommerce and marketing at Marlboro Nissan in Massachusetts.
The dealership originally broke into social networking to drive traffic to its sites and discovered that people really do want to read what they put out. Martell posts his own blogs, for example.
“People are actively looking for updated content,” Martell says, noting review sites are particularly beneficial. DealerRater really helps get the dealership’s name out there. The economic crisis has taken the credibility from manufacturer awards, he says, while a place like DealerRater lets customers justify what to buy.
Martell anticipates the dealership will continue focusing on DealerRater.com but realizes he must look beyond the site. “I also found you can’t rely on any one thing,” he says. “You put everything in one basket, and you get weak.”