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Sunday, May 28, 2006
Internet advertising compared to traditional media for selling vehicles
Exposure/Reach: The internet is the best of both worlds. It enables a dealer to reach customers they wouldn’t normally reach in addition to their local customers, something a local magazine can’t do. Obviously a dealer’s bread and butter is their local customers. The purpose of advertising in general is to broaden reach – to make those customers who don’t drive by your lot every day aware that you exist, and that you have vehicles for sale they may need. The internet is not something that should be a standalone marketing tool to only reach long-distance buyers. It’s simply a tool that effectively promotes your dealership to buyers who may not know you exist, and long-distance buyers are just an added benefit. Your own website also gives you exposure to your customers 24/7. Many people who buy cars do their shopping from the comfort of their home when your lot is closed. The internet is like having a salesperson working for you even when you’re not there.
Cost: The cost for advertising on the internet is far cheaper than newspapers or magazines too. Consider newspapers. Let's say you use a newspaper that has a circulation of 300,000. Statistics show that only 7% of readers are looking for used vehicles. That drops your prospects down to only 21,000 right off the bat. Say you pay $150 for one basic black and white text ad. Many times the ads only run for a day, so you have to hope the people looking at the paper that one day are looking for that one car. Having your own website means having all your vehicles out there, running until they sell, multiple photos, and nearly 100% of visitors to your website are looking to purchase a vehicle. To use the old fishing analogy, it's like having many more lines in the water with better bait in an area you know the fish are swimming. Common sense should tell you that it's a better way to advertise, but your own website being cheaper makes it a no-brainer. If you had 30 vehicles and paid $150 a month for your website, it works out to less than 17 cents per vehicle per day compared to the $150 newspaper ad. Is that right? You bet.
Collecting Data: The other major advantage internet advertising has over traditional advertising is trackability. With a reputable website company dealers have a tremendous amount of data at their fingertips. Higher Turnover for example tracks how customers find the dealers website and provides a constantly updated return on investment calculation for the dealer. If a dealer was spending more on magazine ads than on third party internet sites like Autotrader.com but was receiving more sales from the internet sites, as a business owner it would make sense to spend more where it's going to yield a better return. I understand that most dealers are busy and focus on selling the cars, but there are two sides to owning a business: income and expenses. Too often the dealers get tunnel vision and only see the income side. I have been in the online automotive marketing field for several years, and I am amazed at how little dealers do with their data. Aside from streamlining expenses, the data can be used for other things such as marketing or cross-selling. If a customer visits your website and inquires about a car, say a 2001 Porsche, wouldn't it be valuable to you to know they were also looking at a 2003 BMW?
To summarize, the internet is a growing tool for auto dealers. Because it's so new to some people, they don't realize the full potential it provides. It can help you as a dealer to reach more buyers, cut your costs, and gather valuable information about your customers. Sales is a numbers game, and by taking advantage of companies like Higher Turnover that essentially hold your hand through the online process you will be amazed at what a small shift in advertising can accomplish.