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Article and Comments from DealerRefresh Post about Social Networking

-- Social Networking is more popular than emailing! What does that mean?

Posted by Alex Snyder | Sunday, March 22, 2009 | Posted in Latest News & Trends

Editor Note: Hopefully, Alex Snyder will forgive me, but I had to bring over a DealerRefresh.com Article and Comments thread dealing with the subject of using Web 2.0/UGC sites as a marketing resource for dealers. The original post is at: www.dealerrefresh.com/social-networking-nielsen-study. Shown below is what I felt compelled to share with the ADM membership:

According to Nielsen, more time is spent on Social Networking sites than is spent reading or sending emails. In their latest study, this equates to one out of every six minutes of the average web user’s time is spent on sites like FaceBook, MySpace, or Twitter…or Dealer Refresh (and other blogging sites). Social Networking is growing at twice the pace of other major online activities such as using a search engine, researching a car purchase, or just sending an email.

To put social media into the simplest of definitions, think of it as a place where people can converse with other people on the Internet.

Take a look at Nielsen’s survey. Of note is page 7 where they address the problems in advertising within a “conversation”.

"It will take time to work out the magic formula for successfully advertising in social networks. The diversity and personalised nature of the environment means standard ad models - such as contextual search and standard unit sizes - won’t cut it. Different approaches across ad units and ad inventory will have to be tried, involving a trial and error mindset."

As advertisers, do we join the conversation or interrupt it?

Nielsen also points out that:

"Social media has fanned the flames of consumer distrust about advertisers claims."

If you are familiar with an eBay and M3 incident from a few months ago, you already know the power of Social Media on an advertiser’s reputation (notice what’s indexed in that search link). Knowing you cannot control every little thing that may or may not be done by one of your employees, how can you combat these medias when they’re not working for you? How do you stop the Flogging?

Social Media brings up two major problems for advertisers:

1. How do you advertise on it?
2. How do you keep your reputation clean in it?


Imagine a customer sitting in your finance department with his iPhone. He loved everything about your sales person, loves the deal on the car, and is on Twitter describing the whole process to his 100+ followers - great! Then your F&I Manager says “if you buy this warranty, I’ll lower your rate by 2 percentage points.” Guess what was just Tweeted to over 100 people…who may Tweet that to their own followers. What was a great time, has now become a single 140 character sentence on Twitter that just ruined your reputation with a bunch of people…and you have no idea!

I’m not trying to scare you with this, but I am trying to grab your attention. On the positive side, you can specialize in a particular social media network/site and gain a serious following of consumers who won’t even think of doing business anywhere else. You just have to do it right, and join the conversation.


Comments Posted on DealerRefresh.com:

* Justin Duff - March 17th, 2009

I read this post because I saw it on twitter. I’d say social networking plays a big role :)

Dealers who embrace social networking sooner than later will reap the benefits. It’s going to be a “learn as we go” approach this time around. Advertising with banners or paid ads on social networks will be the Google Adwords of this current time period. I think dealers are more willing to try different internet strategies this time around. It will be interesting to see how this all plays out.

* corey salzano - March 17th, 2009

not sure why you consider blogs to be social networks, i didn’t see that in the nielsen paper. also twitters are 140 characters.

* Gerald Hand - March 17th, 2009

It seems the immediate impact of social networking for dealerships will be initially the negative impacts, to wit, the M3 incident last summer, and slowly, I think more and more good use (i.e., more sales) will be realized from the power of social networking.

Nothing wrong with it, that just seems to be how we embrace things.

* Alex Snyder - March 18th, 2009

Corey Salzano - I just wanted to let you know how much I appreciate your comments since you came to DealerRefresh. They are by far and away the most value-adding, debate-inspiring, industry-improving comments I’ve ever seen! Keep up the great work!

Gerald - yep, you’re probably right.

* Roland - March 18th, 2009

I think the challenge of harnessing the power of social networking could be to approach the question differently.

By looking for “new” friends and followers, we overlook the goldmine of “friends” we already have: website visitors.

If our website already has two or three-thousand visitors a month to their website, wouldn’t that be a great place to start? Haven’t they already initiated the social conversation? They’re already interested in your store, are considering buying from you – this is where the attention should go, at least initially.

The answer to the social networking question could be in your own backyard.

* Alex Snyder - March 19th, 2009

Roland - I like your thinking!

* Mat Koenig - March 19th, 2009

Alex,

Great article. I would say that I agree with Roland as well. In the same way dealerships overlook their current customer base from sales and service with thousands of opportunities and put all of their focus into finding “new friends” to sell vehicles to.

The question I struggle with when it comes to advertising on social networking sites is how will the consumer really respond to those of us in the car business.

If we’re ‘friend requesting’ people so we can email market them on Facebook or MySpace we are technically taking an ‘interruption advertising’ approach. Similar to putting an automotive Ad in the sports section of a newspaper. When someone opens the sports section they’re looking for football info, not a lease on a new Toyota.

I KNOW interruption advertising works but we all know why so many consumers are using the internet: they can get what they want, when they want it. Heck, it’s the same reason I only watch TV that I DVR and never watch things live (except the Super Bowl).

I think that there is opportunity to advertise well on Social Networking sites, I just wonder if the time invested sill yield enough result to justify the effort? Will a multitude of advertising turn people off to the more popular social networking sites?

Look at the growth on Facebook once MySpace got overloaded with advertisements. I know that 70% of my peers switched to Facebook after MySpace became ad heavy.

Will our customers leave and do the same?

* oakie4 - March 19th, 2009

The scary part is some of these dealers are so focused on hanging on and being one of the survivors that when things turn and they will. The dealerships that have not embraced the internet and have some sort of understanding of a BDC never mind social networks will be the first to fail unfortunately.

* Chris K - March 19th, 2009

Dealerships will survive without ever buying into this hype and trend that will last how long… before the next web gimmick is invented?

There are people like me, lots of them, that believe “not documenting every second of our lives online” is actually a healthy thing to do.

Right now as I write 40,000 cars a day pass by us, our radio ads dominate the airwaves, Nissan has great ads all over the radio, tv and internet…

And to say if we don’t Twitter, or don’t get a Myspace or Facebook account we’ll quickly sink to the bottom is quite absurd and a narrow minded vision of the big picture.

Maybe if people shut off the tv, put down their pda’s, smartphones, iphones and such they’d realize the world works well and exists brilliantly without their technology.

* Roland - March 19th, 2009

Has your computer locked up again, Chris?

* Lord_Finesse - March 19th, 2009

Hey you peeps got it going on. Thinking digital age. I like that.

Coming from a serious social networking guru… I suggest you dealers don’t over inflate the ROI on social networking alone.

Spread your Internet departments jar of mustard thick, and on the regular in those social networks. It’s free you know! But I offer some suggestions on how to be effective in not turning peoples off from subscribing to your Fan page. Yes your fan page. You don’t want a profile. Because profiles are for people silly. Start fan pages. Use yourself or a team of people in your dealership on facebook as your catalyst.

Getting fans is like becoming a rockstar on facebook. Look at how Skittles.com uses facebook. They have a kick ass fan page that everyone wants to subscribe to.

Facebook, Twitter, MySpace, LinkedIn, Blogs… are your channels. But strategize your use of them.

Warning! I unsubscribe from a lot of f’n birds on twitter because they tweet to f’n much.

You starting to catch my drift. I stumbled upon this blog because I followed a facebook update, which lead to a twitter page, which lead to a tiny url link to this blog. PWN!

Your Internet Sales dept needs to be your digital army with all the right tools.

This is the general speaking.

* Richard - March 20th, 2009

Chris K,

This ‘telephone’ has too many shortcomings to be seriously considered as a means of communication. The device is inherently of no value to us.

Western Union internal memo, 1876

* Cem Avsar - March 21st, 2009

Engage users, build your network and keep users coming back for more with Windows Live Messenger! Use the Windows Live Messenger Web Toolkit to connect users and let them communicate with hundreds of millions of Windows Live Messenger users all over the world. Use the Windows Live Messenger client (v. 7.0 and later) to develop a single- or multi-user application through the Windows Live Messenger Activity API.

* PennySue - March 23rd, 2009

Regardless of the methods for advertising on social media, social networks are here to stay, growing by leaps and bounds. We have just launched a new Social Value Network website, our goal is to help all members achieve success and give advertiser’s the opportunities to advertise. Because of the diversity of audience visiting social networks, its becoming a prime target for reaching their targeted market.

* Joe Diaz - March 24th, 2009

Um… uh… where did I take a wrong turn???
When I need to buy a car I go to a dealer, take look at a few cars and then buy one.
How did all of this become such a tangled web of Facebook, Twitter, MySpace, LinkedIn, Blogs, Windows Live Messenger! You poor poor dealers and car buyers… how did you turn something so utterly simple into something so damn complicated??? I was in sales for 16 years, selling a product that didn’t need any special “devices” to get customers because the product was exceptional. What is up with all this anxiety and frantic search for the “magic bullet”? Seems like you’ve all lost your minds and it’s very very sad to observe. Lord_Finesse: you are the SCARIEST of the bunch.

* Jeff Kershner - March 24th, 2009

@Joe, you obviously did take a wrong turn. You made a left turn down the yellow brick road when you were supposed to yield right onto I2009.

I recommend we all take Joe’s advise, screw differentiating ourselves and finding out how to speak to our customers rather speaking at them. Let’s roam the showroom floor and wait for the bus of customers that are lined up and dieing to purchase our exceptional products without building some type of relationship first.

* Joe Diaz - March 24th, 2009

When I’m buying a vehicle I’m not looking for a “relationship” I just want to buy a car (as long as I’m treated with respect from the salesperson) and leave. The more a store, dealership or corporation etc. speaks of “relationship” “family” “honesty” “integrity” etc., the less likley those values are actually being displayed. Just do it, don’t talk about it or put up banners with the pretty words.

* Jeff Kershner - March 24th, 2009

I’m sorry Joe, I forgot..everyone buys the same way you do. Silly me.

You are right though..the word “relationship” can be thrown around loosely. I don’t mean that in the sense that you should have a new BFF by end of the transaction.

Eitherway you’re NOT going to purchase your car from someone that is not professional and is not willing to listen to what you want and need.

I find it hard to believe that you sold something for 16 years and never had to build a relationship EVER with anyone nor did you ever have to network outside of your 1 degree. Social Media/networking is no different…you just need to know how to do it right.

“The more a store, dealership or corporation etc. speaks of “relationship” “family” “honesty” “integrity” etc., the less likley those values are actually being displayed. Just do it, don’t talk about it” - Totally agree with you there!

* Joe Diaz - March 24th, 2009

I treated my customers with absolute respect, never attempted to “convince” them they needed anything which they indicated they didn’t want. Never attempted to change their minds in order to increase the sale, and therefor, my commission. I sent them thank you cards for each sale and a card to celebrate their birthday; a follow-up call after each sale (not to sell more to them) simply to thank them for the purchase already made. I’m retired at a young age, enough money to live a simple and modest life (a very small home, nothing fancy at all about my life; just extremely happy), due to the great products I sold.

* Jeff Kershner - March 24th, 2009

Exactly Joe.

* Brian in Etown - March 24th, 2009

just curious Joe…..what compelled you to post on this blog?

* Eric Miltsch - March 24th, 2009

Jeff,

As much as I love your blog man, when I’m retired, I won’t be posting blog responses…

* Roland - March 26th, 2009

I think I’ve changed my opinion.

I used to think social networking was a good idea for dealers. Funny part is, it was in the best interest of my job to think that.

I don’t think that anymore.

I’ve revisited this post several times to see new responses (good lookin’ out for the Luddites, Joe) - and I have a question for the car guys out there - the current, dyed-in-the-wool, working ISM’s.

Do you think social networkers (i.e. everybody but other retailers) would rather have you involved in social networking to have “conversations” with you or would they rather have you there to easily find your cars?

I’m really beginning to think it’s the latter and here’s what I mean.

I was talking to an ISM in Georgia yesterday and that conversation echoed the same story I’ve heard again and again.

He said, “I have a Facebook page, and here and there somebody joins - but I have yet to sell a car from that.”

Not only that, but he told me how much time he spent (initially) trying to crack that nut and to no avail at all.

So maybe it’s not social “networking” that auto retailers will benefit most from, but social “marketing”.

Just using the networks for the SERP help and so when members do a search, your pre-owned 2007 Saturn Ion might catch their eye.

What do you ISM’s think about that? Are you tired of social networking or is it paying off for you?

* Jeff Kershner - March 26th, 2009

Roland, we are all trying to figure this out and at this point there is no [one] answer.

I also think we get caught up on the term “social networking” and forget there are many avenues that fall under this umbrella, not just facebook and myspace.

I believe that social “networking” and social “marketing” for businesses need to coincide (though one could outweigh the other). For myself, the branding element of this social media is what I find most beneficial.

There is a webinar happening over at TheCustomerCollective.com. It’s not automotive related but maybe there might be some good tips on how to leverage social media.

Social Selling: Live Q and A on Selling with Web 2.0

11 a.m. PST / 2 p.m. EST March 31, 2009

“How do you take the proven fundamentals of good selling and apply them to social networking? What Web 2.0 tools should you as a sales professional be utilizing to find new prospects and keep the customers you have loyal?…”

* PennySue - March 27th, 2009

Jeff: I agree with you it should be Social Networking and Social Marketing- reaching the Social Media. To a degree that is exactly what we have imported into our website. Mat: you have some very interesting points expressed. What would be the percentage of advertisers that would offer discounts through their ads from the different social network sites? With the economy crunch this would be a benefit to advertisers if they were to get more customers through these ads.

* David Book - March 29th, 2009

Fun discussion.

Indeed we are over-complicating this, not surprising since we don’t fully understand the implications of our “new world” and how our once solid communication methods are no longer efficient enough (think about calling 100 people) when you could do otherwise.

Facebook, Twitter, MySpace, all of it, it’s simply a matter of communication. We have always had a few different ways to try to get our message across (grunts, smoke-signals, pony express, telephone, dial-up, broadband, mobile-web) and that’s all we are trying to do now.

Advertising, marketing, and selling is communicating - nothing more, nothing less. Learn to communicate like your customers want, expect and appreciate or find a new gig.

* Joe Diaz - March 30th, 2009

To: Brian in Etown

“just curious Joe…..what compelled you to post on this blog?”

I came upon this site many months ago by accident, browsing the ‘net. Social networking, sales and technology interest me but human behavior interests me most. Apparently there’re way too many dealers chasing way too few customers, resulting in a frantic search for anything to grab, to prevent drowning. A large number of dealers need to close; an uncomfortable but realistic outlook. Did anyone on this blog ACTUALLY believe, several months ago, that GM or Chrysler would solve their problems by end of March 2009?

* Bob Schiff - March 31st, 2009

Jeff, you make some great points. My company iBidMotors.com has been advertising on Facebook for the past year (pay per click) and have seen some pretty good results from it.

* Brian Edward Canell - March 31st, 2009

Our company has started experimenting with its own Facebook page, including offering a couple of vehicles before they go on our actual webpage. Our company also has a couple blogs, including one of our salespeople hosting the “Subie Divas” blog.

* Ralph Paglia - March 31st, 2009

Jeff, this is an interesting post in that I am out here in Cedar Falls, IA working with the Mudd Advertising Agency and they have some very interesting marketing tools… When i discussed the use of UGC, Web 2.0 and Social Networking sites being included in a dealer’s marketing strategies, they just flat out believe there is little to any promotional value in the category… I find this interesting, not surprising, but interesting… I am starting to form an opinion that UGC/Web 2.0/Social Networking genre’s may have more value from the perspective that the auto industry has had towards CRM over the past ten years… Do you think that the real intrinsic value to dealers available in this category of site and related activity may actually come from the ongoing development and management of relationships with people who interact with the dealer’s brand, people, products and services in a UGC/Web 2.0 environment? Man… That sure sounds like i am over-analyzing, but i am just trying to get a handle on what so many people seem to see as a waste of time, but which i have direct first-hand experience at realizing revenue and sale opportunities.


* Ryan Gerardi - March 31st, 2009

Ralph, your suggestion about social networking offering more value than CRM is in line with a big part of our message. CRM software does not facilitate a two-way conversation like social networking does. Additionally, CRM software requires the company to input and update the info manually whereas with social networking profiles they are (theoretically) always up to date. While you can not do mass emails in social networks unless you have groups, which most networks now feature, you can achieve the bulk of your mono-y-mono communications.

We are touching on this aspect of social media networking in our webinar tomorrow that I mentioned to you - http://tinyurl.com/cnmqpz .

* Stan Sher - April 1st, 2009

Social networking is where it is at. Dealers can network with previous customers and keep them updated with specials and new trends instead of sending emails. Vendors can network with dealerships and build a friendly relationship with them. This changes cold calling into warm calling because a phone call from a vendor to a dealer is more friendly as the dealer knows who they are talking to. Social networking is a great way to show people and prospects your role in the business as well as your role on the planet. If people see that I am not just a car guy but I am a great guy in general sharing similar hobbies and interest on a personal level, people will respect me and talk to me differently. Social networking allows us to have a personal touch and change the mood of any prospect. I believe that it also helps create a much better reputation.

* Alex Snyder - April 1st, 2009

Ralph - Ryan hit it on the head. It is a supplement to CRM that can be used in accordance with CRM if the CRM process implementer knows his/her stuff. Now talk about sounding too technical!

Social Networking is like Public Relations on speed. If you design your message effectively, you can have the world spread it for you in minutes. You’re not going to reach everyone the TV would reach, but you’re going to have “fans” working for you that you don’t have to pay!

This is how social networking can be capitalized on. BUT, you need to be very careful in how you approach it.

* Walt Kustra - April 2nd, 2009

Social networking sites the new CRM? Maybe? I would never have thought of it that way, but after reading the last few posts on here I certainly have a different perspective. This is coming from a guy who uses both daily (not at the same time of course ;)

* Ken Gibson - April 8th, 2009

As I have delved into this exciting phenom, I realize it is one of the big waves that rock our world from time to time (fax, cellphone, internet, etc). It will not go away,; it will integrate into daily life for most.
As I meet with dealers and dealer associations, the curiosity factor is enormous. The acceptance factor is very low. The desire to understand and choose whether or how to apply is huge. As I research automotive on Twitter, Facebook and linkedIn, I see the early adopters using trial and error to make business sense of these new tools.
My primary focus is to get dealers to high proficiency in existing proven tools first, then add the SMM stuff as a way to leverage their use of the technology to build community and spread their web presence.
I’m looking forward to learning from the gurus at the Digital Dealer Conference in Vegas later this month, as to what works in selling more cars..

* Tom Berry - April 8th, 2009

Social Networking is not new. It’s been around forever - face-to-face, letter writing, telephone conferences, parties, luncheons, seminars, on and on. “Online” Social Networking is what’s new. It’s a way to use today’s technology to meet new people, reconnect with old friends, gather opinions, and get recommendations. Would you wear a banner ad around your neck when you go to a networking event or party? Then why would you do it on LinkedIn or Facebook? What has more value to a dealership, a little ad on a few profiles or 50 people saying what a great company they are? It’s all about relationships and credibility – not in-your-face advertising.

Use the online networking sites to position dealership executives, management, and staff as trusted, knowledgeable resources for purchasing new and pre-owned vehicles, financing, parts, service, and related products. Create, monitor, and manage, online ratings and reviews that can positively promote a dealership’s reputation. Connect with people online to provide a source of referrals, recommendations, customer testimonials, and Internet visibility.

When you do advertise, create awareness of a dealership’s unique features, benefits, inventory, and outstanding customer service through highly targeted traditional, Internet and mobile media campaigns. Use digital and traditional advertising to drive customers to a usable, useful, and enjoyable website and one that embraces online social networking. Use an advertising agency that knows how to help you connect online AND off. If you have an agency that doesn’t, or need one that does, email me - tberry@thetitanagency.com.

Here are a couple of recent articles in which I am extensively quoted about this very topic.

Automotive News March 16, 2009
“Studies: Luxury car shoppers on Web want instant info.”
https://home.autonews.com/clickshare/readLink.do?CSAuthKey=n0JWd7kd...

Dealer.com Newsletter - Power to the Dealer April 7, 2009
“The Titan Agency Surveyed 50 Luxury Brand Dealerships”
http://newsletter.dealer.com/e_article001394623.cfm?x=bfmQfGf,bb10mFCv

* Larry K - April 8th, 2009

The bottom line; all the social networking sites have to be profitable in the long term they want to stay alive. They have to generate a revenue stream from businesses that have the dollars to spend. If they do indeed send buyers, willing to purchase and the ROI is there… why not use this as a medium. its inevitable and becoming acceptable as a method to provide the content and web-usage with advertising and visibility as a trade-off.

* Ralph Paglia - April 8th, 2009

Ryan and Alex,

Thank you for your responses and commentary… It is good to know that I am not the ONLY car guy crazy looking at Web 2.0 from a relationship marketing perspective. Now, please don’t get me wrong, I have used various social networking sites as advertising venues and have seen some successes in driving traffic to dealer sites that turned out to be far more qualified than I had initially expected… BUT, and this is a big butt (he he he), From just a few direct experiences from some prototypes and experiemnts, the power of “word of mouth” when the web is used to propogate it more effectively than offline ever did, can be truly amazing… And scary! Heck, just look at RipOffReport.com for the scary side. Yet, even with a stumbling and bumbling, haphazard, making a lot of guesses and trying stuff never done by dealers before, I have one dealer I work with who SWEARS he is selling 3 to 5 additional vehicles each week from the UGC/Web 2.0 experimentation we are doing for his store… And, I figure it must be true (he may be low-balling me) because his wife is the store’s controller, who can’t stand what they pay me per diem, AND she gave me a big hug during my last visit, and took me out for a nice seaside dinner, and picked up the check… Dealers buying dinner for me is proof enough that we as professionals have only scratched the surface of what is possible… Ya’ think I’m leaving money on the table with my first dealer community, social networking success story? LOL… Truth be known, I think i would have PAID to see something with UGC/Web 2.0 actually generate some car sales!

* Ralph Paglia - April 8th, 2009

@Joe Diaz (and Jeff K),

I started selling cars in 1981, and I am about as grizzled a veteran as any of the other old timers pushing iron over the curb these days… Even a knucklehead like me figured out over 20 years ago that RELATIONSHIP = GROSS! My first wife once told me what an idiot I was when I explained that CSI is determined by gross profit… Because when CSI reports first took hold I immediately saw that the highest gross deals we made generated the highest CSI scores… Doh… She was right (only time!), the gross was generated because there was a good relationship foundation! The customer ALLOWS us to earn a respectable profit margin WHEN A POSITIVE RELATIONSHIP HAS BEEN CREATED. Yes, I know car guys like Joe probably think that they are sooooooooo crafty and cunning that any high gross deals they generate are through slight of hand… NOT. Talk to the guys selling cars at Acton Toyota in MA about how the deal works when a customer drives 100 miles, past 8 other Toyota stores to buy a car from Acton Toyota because of the 200+ Positive reviews that consumers have created on DealerRater.com at the request of their salesperson… BECAUSE they had a relationship with that car salesman! When I first started selling cars, my mentor would wack me with his crutches (bad knees after 30 years on the blacktop) and tell me to stop selling cars and start building relationships with customers FIRST… He would ask me, “whattaya wanna be, an order taker? ’cause there’s no gross in taking orders, and i ain’t splitting no minnies with you, so start selling yourself before you distract these ups with the damn car!”.

Anybody who does not understand the types of differentiation that Jeff commented on is doomed to a career (or lack of) of minimum commission, low CSI and job dissatisfaction… You know when I REALLY think a deal is real? When i hear the salesperson laughing along with the customers as they are writing up a worksheet! People don’t laugh with car salesman, they might laugh at us, but they do laugh WITH professionals they have come to trust, respect and want to do business with… When was the last time you got a referral, someone you never met before and it was the easiest deal that month? Why, because you had a head start on building a relationship based on the transference of “relationship equity” from the person who sent his/her friend to you as a referral… Personally, the last car I bought was a used Ford Expedition, and i know I paid about a grand more than I could have paid, so that i could buy it from a manager I trust who works at a dealership that has treated me well as a supplier… It’s ALL ABOUT RELATIONSHIP, or you can take orders for mini deals… You pick!

Views: 32

Tags: Internet sales for car dealers, Social Networking, UGC, User Generated Content, Web 2.0, automotive marketing, car dealer community, car dealer internet sales, dealers using web 2.0, social networking for car dealers

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