The Engine Behind the Automotive Industry1 Oct, 2008 By: Jacqueline Renfrow Response
Driving customers from the Internet to the dealership, direct response marketing is steering the industry through tough times.
Moving forward, Dollar Thrifty Auto Group will continue to experiment with creative campaigns in the DR space until budgets can grow again. The rental company is hoping to return to radio ads soon, which worked well for them last spring.
Online Marketing Is a Must
Deutsch's automotive client Saturn usually budgets a large percentage of its DR funds to direct mail and the Internet. And Saturn is not alone. Marketing experts believe that while print will always have a place in the automotive world, the Internet and other digital channels will continue to grow and take up a larger chunk of marketing budgets.
Koeppel says a large portion of local dealers' budgets have traditionally been spent on TV, since television seems to drive consumers to other media, such as the Internet and print. "Print is still an important part of many dealers' advertising programs, but the reality is that newspapers are becoming less effective every year and these funds are being shifted to online efforts," says Koeppel.
Matt Naeger, executive vice president of operations at IMPAQT, predicts money spent on DR marketing online will continue to grow because it's the perfect outlet for getting measurable results. Naeger's company is a full-service search engine marketing (SEM) firm that works exclusively in the online space, managing visibility, production, sales and searching production, Web site building, and search engine marketing.
IMPAQT entered the Internet space nine years ago, when it was still in its infancy, which Naeger says has helped give the team a better understanding of multi-faceted online campaigns. While search engine advertising is increasing, E-mail ads are being cut back because of spam. Naeger credits SEM for having a positive effect on convincing clients that direct, measurable media can have a great benefit over traditional media. He follows the adage, "He who has the most data, wins. And he who uses the data best, wins in the end."
Another company that focuses on the Internet and digital marketing is Detroit-based Organic. The agency is the lead creative team developing digital solutions for Chrysler LLC and its three main brands: Jeep, Dodge and Chrysler. Scott D. Lange, group creative director for Organic, says that digital provides an ideal platform for direct response because it can precisely target consumers who are in market. And in the immediate future, he only sees the importance of the Web growing, letting traditional marketing fall into a supporting role.
Yet another agency in the DR space, both exclusively an online service provider and exclusively in the automotive industry, is The Cobalt Group. Tilton says that dealers are aggressively shifting more into the online space, especially because of the need for them to make serious budget cuts. With slow moving inventory, some marketing budgets have been cut almost entirely.
"The first things to go are the things they can't put their finger on: more traditional media, TV spots, massive print campaigns," says Tilton about budget cuts. "In the online space, it's much more efficient in terms that they don't have to spend as much to get bang for their buck."
Plus, Tilton says that the Web makes it easy for marketers to track visitors to the site, see if E-mails were opened and track if a campaign is working. It's about the "A-ha!" moment, he says, when clients realize they can spend less and get more productivity for their money.
Why the Internet? Tilton argues that consumers aren't reading the classified ads in newspapers anymore and that TiVo and satellite have consumers skipping television and radio ads. So the only place left to find an ideal customer — who is often in his or her 30s or 40s, owns a home, and is married — is online.