Car dealers and manufacturers compete for online ad space
The days of seeing your local car dealer ads on TV are not going away, but dealer prominence in online advertising is now reaching unprecedented heights, giving car manufactures a new (but good) challenge. A recent report indicates that car manufacturers are finding competition for their ad slots, and that the competition is coming from none other than the car dealerships themselves.
Ad spending by dealers has increased dramatically over the last two years, and the increase has resulted in bidding wars on third party sites like Edmunds.com and Cars.com. Online ad spending by car dealerships was up to $32 million in 2007, and that number has more than doubled each year since 2005.
It’s a new plan of attack for car dealers to be involved in online advertising, but it’s on the upswing. “Buying space on the Web was never part of the strategy until recently, but now it’s 50% of the conversation,” said Pat Primm, a Cleveland area auto dealer.
Online ad pricing is measured in cost per thousand impressions — or CPM — and an ad spot that came with a $4 CPM price tag two years ago now costs $34. Advertising profits for Edmunds.com went up 64 percent in 2006 and another 93 percent in 2007. CEO Jeremy Anwyl says that “dealers and dealer associations are coming in after years of spending 90% of their ad budgets on TV. They are just now realizing that’s too much.”
While the third party websites are clearly the winners in this equation, the loser is the brand identity. With so many voices trying to tell the same story and sell the same product, the message being portrayed by the original equipment manufacturers can easily become diluted and confused. David Harris, the manager of ebusiness and CRM for Suzuki, Brea, California says,
“Our goal is to make sure we are communicating a consistent message. All of a sudden . . . you have a wide variety of messages.”
This is all the more reason for dealers to make sure they have effective online brand marketing strategies in place. Manufacturers have huge budgets to spend on researching the most effective ways to get the car’s message across. It’s vital to the dealership’s success that dealer marketing not only doesn’t conflict with that, but leverages it to their advantage.
Online advertising has become the new normal for car dealerships across the country. Twenty years ago, local TV advertising was the most effective and prominent method of marketing for automotive dealers, and the game has changed. This report is just the newest data that shows that a focused online brand marketing strategy will be the ticket to surviving and thriving in this new world of car sales.
Just Say No to Floating Ads
If you’re like me, those floating ads that appear on some of the websites you visit get on your nerves. You may not have seen them because there are only a few websites on which they occur. If that’s the case, consider yourself lucky. More than once I’ve tried to click on the “Close” option and accidentally opened the ad completely.
I’m mentioning this because Google was reportedly about to introduce these annoyances on some of its pages. A representative from Google Adsense, however, squashed this rumor a few days ago. He also added that this would “never happen” because it violates the search engine’s advertising policies.
In addition to that, though, some users who have implemented floating ads into their adsense codes have had their accounts deleted lately. Google has also reduced the clickable area around the advertisements it places on pages in an effort to more accurately monitor what consumers are purchasing. Up until now, there have been a large number of erroneous clicks that only throw the statistics off.
These actions are indicative of Google’s ambition to become the single engine that Internet users go to whenever they search online. Because Google is creating more user-friendly websites and unintrusive advertisements on its pages, searchers feel less bombarded by companies trying to push their wares and more comfortable searching for anything they need.
What does this mean for the online marketing industry? It means that more people will see your pages with fewer frustrating advertisements. In the long run, it could mean more visitors and more profits. Who doesn’t like that?
