Dealers Spending More on Web Advertising, Marketing

December 13, 2007

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COSTA MESA, Calif. — Results of the fifth annual Jupiter Research & NADAguides.com Auto Dealership Executive Survey were released Wednesday.

The study is designed to examine Internet operations for various dealerships. One of the companies' discoveries was that, of the dealers surveyed, 43 percent said they spent more than $30,000 in 2006 on online advertising and marketing.

That figure marked a 14-percent incline since 2003, officials indicated. A major part of that spending, they added, was on third-party Web sites and online classifieds.

Breaking it down further, 28 percent of dealers reported that they spent $50,000 or more on online advertising and marketing, while 14 percent spent between $30,001 and $50,000.

"The Internet continues to gain momentum among auto dealers as a higher percentage than ever before are adopting online advertising tactics, and many are increasing their online advertising budgets," stated Belis Aksoy, JupiterResearch's automotive analyst, referring to the report called U.S. Online Automotive Dealer Advertising Executive Survey 2007.

"Online marketers that provide their dealer customers with leads that become sales will be in the best position to capture an increased amount of these dealers' online advertising budgets," Aksov continued.

Additionally, the study pointed out, dealers who had more success converting online leads to sales were more apt to use the same online advertising to convert e-mail leads (at 74 percent) and phone leads (72 percent) than those who didn't have as much success with online leads (51 and 54 percent, respectively.)

Also, dealers were more likely (65 percent) to use their own dealership Web site for consumers instead of a manufacturer-sponsored Web site (19 percent).

"These results demonstrate the fact that today's automotive retailers understand the importance of the Internet in their daily business operations," explained Lenny Sims, vice president of operations at NADAguides.com.

"Not only have car dealers embraced the Internet, they're using it to expand their advertising and marketing efforts by reaching out to car buyers via their own Web site operations, in addition to soliciting the help of third-party lead providers such as NADAguides.com to help them sell more cars," Sims added.

To complete the study, the companies polled 106 dealerships throughout the country regarding their online operations, specifically Internet-generated sales, advertising and marketing allocation.

Single- and multiple-franchise dealerships were surveyed and average 2006 sales between them came out at 1,700 new vehicles and 1,700 used vehicles per dealership, officials indicated.

Used Car Manager