Black Book: Traditional Media Ads, Marketing Could See Decline

October 15, 2007

Email this story Printer Friendly Version

GAINESVILLE, Ga. - As dealers increase spending on their own store Web sites during the coming year, traditional advertising and marketing promotions are expected to take a hit, according to a new research project sponsored by Black Book.

The research revealed that 72 percent of all franchise dealerships plan to increase spending on their Web sites over the next 12 months.

To help accomplish that move, dealers reported that they plan to reduce spending in sales events, traditional direct mail and customer loyalty reward programs in the next year. On the other hand, 75 percent of dealers said they will remain constant or increase their investment in Internet leads generated by third-party providers during the same time frame, the research showed.

Traditional advertising spending of all types is also expected to decrease, officials said. Study results revealed that 20 percent of dealers will reduce spending on radio advertising, while 44 percent of dealers said they will decrease display and classified newspaper advertising.

Additionally, 59 percent of dealers plan to invest in search-engine optimization to drive more traffic to their Web sites, and 58 percent plan increases in direct e-mail promotions of online inventory to prospective customers in 2008, according to the research project.

As a part of the study, dealers also rated leads from their own Web sites as having the highest quality compared with other sources such as manufacturers or third parties. According to the research, 40 percent of dealers perceive their own Web site to generate the highest quality sales leads, compared with 30 percent from OEM sites and 23 percent from third-party lead providers.

At the same time, the study reported that dealers will also invest heavily in tools that will give them more control of the entire online transaction, including finance, trade-appraisal, service scheduling and price negotiation tools.

"The number of high quality leads from their own sites combined with significant investment in the new tools will make 2008 a watershed year for dealer Web sites," noted Black Book representative Mike McFall. "Dealers will continue to invest in their own brands and will continue to refine their online business practices, making their Web sites a more important part of dealership operations than ever before.

According to officials, the research was conducted by Detroit-based Intellitrends, using online surveys and personal interviews.

Trends & Stats