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Online Digital Dealer Advertising Guidance

Online Advertising Primer

Are your dealership’s conventional media advertising strategies generating enough showroom traffic, incoming sales calls and Internet leads? If not, it it’s time to review your overall advertising strategies and factor in the use of online, web site based digital advertising... With over 70% of the population in North America now utilizing the internet as a means of communication and shopping for products and services, more and more Auto Dealers (Tier 3), Dealer Associations (Tier 2) and Car Companies (Tier 1) are investing in online display advertising to drive significantly more traffic and profits to their dealership’s Sales, Finance, Service and Parts Departments.

Dollars and Sense

By the end of 2007, the latest data shows that nearly $30 billion will be spent in North America for online display advertising, with well over $40 billion forecast for 2010. The United States and Canada currently support over 233 million active daily internet users. Research by eMarketer indicate trends that online advertising will more than double as a percentage of total media as car dealers and other advertisers learn how to spend their marketing budgets smarter instead of just bigger. The demand for online advertising is booming, and the increasing numbers of dealers and other businesses who are channeling advertising budgets away from traditional media and implementing digital marketing strategies is leading to varying degrees of inventory shortages. With the automotive industry among the forefront of businesses leading the transition away from such conventional media channels as newspaper and direct snail-mail, the data indicates that the automotive industry has recognized the continued growth in the online automotive user (AIU) population and the opportunity to target specific car buyer prospects in order to capitalize on driving the exact types of customers they want into showrooms, websites and phone systems. Internet advocates have long labeled digital marketing as the most accountable of all advertising media. That claim has often come across as more of a vendor sales hype than meaningful data; however, methods and technologies now in place are making the measurement of online ad effectiveness an everyday reality available to any dealership. Although the effective use of all the data now available requires focus and training, more and more dealers are allocating the resources and management focus required to improve overall advertising efficiency.

Rules of the Game

The NUMBER ONE rule that you absolutely need to recognize and master if you're serious at all about making money from online advertising is to know the game. The message that a dealer intends to communicate has always been critically important, and no less so with online advertising. With the right message, then the right placement into relevant web sites, and the right overall marketing strategy, your dealership can make every online initiative payoff with increased sales and profits. Later in this post I’ll cover the fundamentals of Digital Advertising and how other Dealers are making web based display advertising payoff with increased traffic to their showrooms, websites and phone systems.

This brings us to rule NUMBER TWO: Consult a professional. Consulting a qualified Digital Advertising professional is crucial to the success of your dealership’s digital marketing strategy. Many Digital Advertising and closely related Search Engine Marketing (SEM) firms make promises but are unable to deliver satisfactory results because they lack both basic knowledge and a deep understanding of the latest trends that drive successful online automotive marketing initiatives. For example, how many SEM providers capitalize on your OEM’s current incentives and rebates in order to increase the QUALITY of traffic they are driving into your web sites and landing pages? Home-made online display Ads such as banners, leaderboards, skyscraper and inline GIF and JPG images are OK, but if you’re like most dealers, odds are that you will want some professional help in this highly volatile and competitive industry of online automotive retailing where there are many ads competing for viewer attention.

If you want to try out creating some online image display ads using professionally created templates speciic to automotive advertising, I recommend you check out www.AdverStore.com. However, using experienced and knowledgeable automotive marketing professionals will allow you to leverage their technological programming skills to create more consumer impact with your Digital Advertising. Dealers also benefit from tapping into an experienced digital advertising professional's promotional creativity by accessing eye catching designs, and automotive marketing savvy. Look for digital advertising experts who can match their expertise with your dealership’s inventory, branding and local market reputation in a manner that serves your store’s marketing mission by creating and distributing creative content into the right web sites using the most innovative, attention-grabbing graphic content.

Fundamentals of Digital Display Advertising

Through the history of online display advertising, ever more eye catching and exciting multimedia enriched and animated ads have always been the trend. History was made 13 years ago when the first online Banner Ad was purchased. It measured 468 x 60 pixels, was purchased by AT&T, and read, "Have you ever clicked your mouse right here? You will." It’s been a wild ride, but times have changed to today's myriad forms of online ad campaigns, including permission based email, keyword-targeted search engine listings, interactive rich media ads, streaming audio, video and consumer-fueled "viral marketing.” We are now accustomed to seeing a web page bordered by online advertising. Far from being merely wallpaper, eDealers are realizing the increasingly rich online ad formats are effective in sparking the interest of car buyers and encouraging them to spend a significant amount of time interacting on their own websites (deep links), micro sites and landing pages after click-through. Market research proves that Digital Display Advertising consistently generates the highest conversions into showroom traffic, completed lead forms and telephone calls. In other words, the right online ads generate sales and profits. Understanding the basics of Digital Display Advertising will help your dealership in designing and implementing an effective and lucrative online strategy for each dollar of Digital Ad budget.

What is a Digital Display Ad?

Display Advertising is the most popular form of advertising on the Internet, and I’m sure you’ve seen more than your fair share of Banners, Skyscrapers, Leaderboards, Inline Rectangles and Squares of various sizes. A Digital Display Ad is a graphic image or video ad displayed within multiple web sites, like CNN.com, WSJ.com, forbes.com, Accuweather.com and others that local prospects (AIU's) and existing dealership customers see when a page loads inside their Internet browser within an area "Geotargeted" around the dealership’s local address or within a pre-defined targeted region. This Display Ad commonly advertises a make or model, special incentive or offer and can be used to promote seasonal events, fuel economy, sales events, special finance services or incentives such as low APR’s, Trade-In assistance and factory rebates.

These unique ads appear on all sorts of web pages and vary considerably in appearance and content; but they all share a few basic functions, such as communicating the dealership’s "brand", special offers, daily operating practices or reputation, and as an entry point into another web site designed to convert the interested consumer into a showroom visitor, electronic lead or phone call. A Digital Display Ad is simply a form of customer communication, a means of creating "Top of Mind" awareness and a portal into your dealership's sales funnel.

How do they work and why are they there?

An online Display Ad can be very similar to a traditional print-type or illustrated ad you would place in a newspaper, outdoor billboard or magazine. But, there is a huge bonus available… the added ability to transport a potential customer directly to a Landing Page, Micro Site, or Deep Links into high conversion rate content within your primary web site, such as new vehicle inventory, used vehicle inventory, trade-in appraisal forms, online credit applications, etc. Just imagine your customer reading a newspaper ad, then being able to touch it and be automatically ‘teleported’ to your dealership showroom! That’s powerful!! Another tremendous advantage of Digital Display Ads over traditional print ads is the capability to infuse dynamic media enrichment such as audio, video, and animation to better highlight your dealership’s specials…It’s like a TV commercial infused into your newspaper ad and then click enabled to become an advertisement on steroids! A virtual 800 Lb. Gorilla in the world of advertising.

Even though the often annoying little Banner Ad was the first form of online advertising, web site display advertising has come a long way since the early days of images that say “click here!” and then drop you off at the dealership’s homepage or some other completely unrelated website. Digital Ads can contain other forms of rich media as well, and many use interactivity like motion and sound to draw attention and convert web site visitors into opportunities to do business. The uses of high-converting technologies like Flash, Java and the ever present animated GIF image have taken this form of online advertising to a whole new level! Key Elements of Effective Online Advertising Like most forms of advertising, Digital Display Ads can vary considerably in quality because their creators vary a great deal in ability and experience. The range is even greater with Digital Ads than with most other forms. Regardless of whether you test your own skills using a site such as www.AdverStore.com , the BZ AdVantage product from ADP Digital Marketing to create a Banner, Leaderboard, Skyscraper or Square Ad, or if you rely on the knowledge and expertise of a seasoned automotive advertising professional, you will need some fundamental information in order to fully understand the characteristics of this “rich media advertising” frontier:

  • Ad Size— Originally most popular in the 468x60 pixel "Banner" version, web based ads are now available in many different sizes and shapes and are traditionally categorized as either Banners, Leaderboards, Buttons, Squares, or Skyscrapers. Skyscraper formats, Flash pop-overs and expandable size ads triggered by a consumer mouse-over have been gaining in popularity during recent months.
  • Colors— Research has shown that certain color schemes produce more desired results. The most commonly used color combination is orange and blue, but the trends change almost monthly!
  • Copy— As with web sites themselves, copy (content) is king... Some of the most effective online ads use simple, direct copy to entice prospects to engage: 1) Get something for free
    2) Save money
    3) Make shopping easier.
  • Imagery— People are visually stimulated by photos more effectively than text. Image is everything, so many dealerships use photography that shows “happy” customers, or any combination of upbeat images that showcases the intended customer reaction to their product.
  • Media Enrichment— The human eye is intrinsically attracted to motion and movement. Rich media formats which include the overlay, the expandable banner and streamed video, essentially harness the advantages of broadband to build more sophisticated online advertising. The aim of this richer creative is to entertain the user in order to entice them to interact with the dealership offer. Digital ad technology allows for animated or richer versions of standard display formats to provider a robust experience for the visitor, creating a brand experience without even leaving the site they visited.
  • Interactivity— Since Digital Displays can contain rich media, they offer levels of interactivity that other forms of advertising can't. The main drive of animated ads is to gain click-throughs. Along the same lines, more and more dealerships are pulling the lever with Flash overlay ads. These ads overlay the text of Web pages and entice customers to view much more than can typically fit into a Digital Display Ad.

Marketing your Digital Displays

The placement of your Digital Display Advertising is crucial to its success. Post your Ads on sites visited by your potential customers, geotargeted to the areas where they use their computers to gop online. If you’re promoting Ford Mustangs, Scions or Chevy Cobalts, buy space on sites visited by college students like YouTube or MySpace. The quality of leads generated from targeted markets generally yield higher click-throughs and are more likely to result in increased sales and greater ROI. Always have more than one Ad to promote each vehicle. A message being communicated via Digital Advertising has more impact when AIU's see it conveyed using multiple shapes, colors and styles of online advertising. Your click-through rates also serve as an indicator of how well your message is being received. If your click-throughs decline over time, then you are overdue to rotate your Digital Ads.

To post a digital ad, you can do either or all of the following:

  • Pay individual publishers to post your digital ads on their web site(s) (ie: Cars.com, Autotrader.com)
  • Pay an Ad Network to post your ads on a number of published web sites (ie: Google AdSense)
  • Participate in a Banner Exchange where you accept ads from other business on your web sites in exchange for displaying your ads on other participating web sites

With a few notable exceptions, the most effective and cost efficient manner to distribute digital ads is through an Ad Network. This is an organization charged with the representation of advertising space for a group of website publishers for the purpose of maximizing revenue and minimizing administrative costs through aggregation. The role of the modern Internet Advertising Network is to transact, serve, track and report the distribution of digital ads from advertisers to publishers using an efficient, interactive marketplace. Large Ad Networks include a combination of search engines, media companies, and technology vendors. Make it a point to check on your digital ads’ performance every few days. By monitoring your ads’ performance, you can modify or eliminate under-performing ads before they waste away your advertising dollars.

Business Mechanics of Digital Ads

Every dealership must invest money in order to sell cars. Invest intelligently by knowing the market and mechanics of Digital Advertising. The basic business model of the Digital Ad is simple. Different payment models can be used depending on the network being used and the primary goal of your dealership’s campaign.

  • Cost per Thousand Impressions (CPM) CPM refers to Cost Per Thousand and CPI to Cost Per Impression. Each time a user views a web page, that constitutes one impression. The method of pricing in CPM is a holdover from print ad days. Typical CPMs for less targeted inventory can range from $0.25 to $5.00 per thousand impressions. Therefore, a dealership that wants to purchase 100,000 impressions at a $5 CPM will sign a contract for $500. Targeted impressions are worth much more to dealerships. If you buy space on a site that is popular with car enthusiasts who are in an attractive demographic for your dealership, you can expect to pay up to 10 times the rate of untargeted ad inventory.
  • Cost per Click-Through (CPC) CPC is historically associated with paid Search Marketing; however Digital Ads can be priced this way when the aim is to drive traffic. CPC pricing models are based on paying only for those ads that experience a “click-through.”
  • Cost per Acquisition (CPA) Cost per Acquisition (Action or Lead) is an advertising campaign pricing model based on paying for direct results. This model takes many forms (leads, sales, etc.) and is increasing in popularity due to the ease of implementation and accounting compared to traditional media. This model is great for dealerships, as you pay only when an ad delivers a defined consumer activity or lead acquisition.
  • Flat Rate (Subscription model) Flat Rate means a fixed cost per month regardless of traffic or amount of impressions. This may appeal to a dealership that is testing an online campaign generally targeting niche markets such as those served by local newspaper web sites, Cars.com and others..

You Can Teach an Old Dog New Tricks!

Old habits are hard to break. This could not be truer than in the automotive retailing industry where Dealers have relied on traditional forms of advertising to sell cars. Even though the Internet has changed the way consumers buy vehicles, there are still some fundamental similarities as well as differences. TV is about the mass market message, and the internet is for individual relationship building. Digital marketing is the model that bridges the gap between the ‘great divide.’ With the similarity to traditional print media, Digital advertising has the potential to maintain the relevancy of a 30-second TV ad while also utilizing the attention-grabbing interaction of the internet. Generally speaking, Digital ads yield two benefits. First, they increase consumer awareness of your dealership's relevance and promotional activities... Second, they can increase web site traffic and leads by enticing consumers to ‘click’ and enter your sales funnel. Each time this happens is called a "click-through", and the number of click-throughs divided by the number of impressions is called the "click-through ratio." This provides a direct measurement of a Digital Ad's effectiveness. Higher click-through ratios are sure to generate results such as increased sales, profits, and higher returns on investment for your dealership. The primary benefit, although less measurable, is building brand recognition and top of mind awareness. Whether brand recognition and buyer awareness of your dealership's promotional activities is part of your strategy, depends entirely upon your dealership’s situation. A person who has visited a site with your dealership Advertisement posted on it has been “branded” without even leaving the site. When you really think about it, both benefits can be defined in two words: Increased Sales! With Digital Advertisement technology, every impression has value.

Catch the Fever

Many Dealers are realizing that online marketing now generates their best return on marketing investment and are shifting budgets from traditional media to digital initiatives including Digital Advertisement marketing strategies. It’s impossible to ignore the results!

Chad Hubler (General Manager), the eBusiness staff and the entire management team at Courtesy Chevrolet in San Diego are excited about their progress in 2007, and are looking forward to growing their business in 2008. In 2007, they have increased their percentages and total volumes of self-generated internet leads received by over 25%, and those leads convert into vehicle sales at a much higher rate than the leads they purchase from third party lead suppliers!

At Scott Robinson Honda in Torrance, CA the Customer Relationship and Internet Marketing Departments continue to be a booming part of the dealership’s ongoing success due to their digital marketing strategies. With complete measurability of their online display advertising performance, Dealer Jeff Robinson loves the way he can actually see which half of his advertising is working better than the other half!

On the House: Co-Op Advertising Reimbursements

If you or your dealer are a little leery about making an investment in online advertising, how about letting your OEM subsidize the cost? By complying with OEM Co-Op Advertising guidelines on Internet Advertising, dealers can capitalize on the marketing muscle and advertising incentives of their manufacturer. OEM based Cooperative advertising programs are characterized by the sharing of costs for locally placed advertising between a dealership and a manufacturer. Many dealers are not aware that the same co-op advertising reimbursements are available not only for traditional media, but for digital marketing as well. Courtesy Chevrolet in Phoenix, AZ participates in most areas of the GM Co-Op advertising program and frequently receives substantial reimbursements on a monthly basis in Internet Advertising GM Co-Operative Advertising Program reimbursements.

‘No Gamble’ Guarantee

The advantages and measurability of Internet marketing have given birth to a whole new realm of advertising for dealerships. Whether it be through a non-animated display of the dealer’s logo or expandable skyscraper sized placement, online based display advertising is helping dealerships to successfully reach customers in a targeted, cost-effective, and measurable way. When you gamble, your risk is determined by chance. With the right technology partner and the right online marketing strategy, the only chance involved with Digital Advertising is the chance to promote and grow your dealership, boost profits, and increase Marketing ROI! Consult with a qualified automotive digital advertising professional to devise the optimal strategy for maximizing the performance of your Display Advertising initiatives. With the right message, marketing combination and the right team, you can turn your marketing investments into a sure bet with a measurable payoff.

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Digital Advertising Sizes and Shapes

Ad Size Ad Type (descriptive)

468 x 60 Full banner (example shown below)

728 x 90 Leaderboard (example shown below)

250 x 250 Square

200 x 200 Small Square

336 x 280 Large Rectangle (example shown below)

300 x 250 Inline Rectangle (example shown below)


120 x 600 Skyscraper

160 x 600 Wide Skyscraper (example shown)

392 x 72 Full Banner/ Vertical Navigation Bar

234 x 60 Half Banner

125 x 125 Square Button

120 x 90 Button #1

120 x 60 Button #2

88 x 31 Micro Button

120 x 240 Vertical Banner

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Tips for Digital Advertising ROI Results

  1. Use enticing shapes/colors
  2. Create catchy headers
  3. Incorporate animation
  4. Use creative designs
  5. Choose optimal site placement
  6. Engage with interaction
  7. Rotate Ad designs regularly
  8. Target your display advertisements
  9. Monitor individual Ad design performance
  10. Do your math (monitor ROI comparisons)
  11. Always include images of people in display ads
  12. Retargeting visitors to a dealers website is priority #1


Prepared and Posted by:
Ralph Paglia
rpaglia@gmail.com
cell: 1-505-301-6369
www.RalphRPaglia.com

Views: 35

Tags: behavioral targeting, car dealer, digital advertising, online advertising, online display advertising, retargeting

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Comment by Ralph Paglia on January 5, 2008 at 9:35pm
Susan, I believe that as digital marketing evolves and continues to move forward, both audio and video will become ever more present and will eventually dominate the highest ROI producing campaigns. People like to be entertained, and the companies with the most entertaining video will receive the most attention and subsequent top of mind awareness from consumers.
Comment by Susan F. Heywood on January 5, 2008 at 3:31pm
BlogTalkRadio.com now offers audio ads and host announcements. I'm doing a weekly social media show (Wed. 3 pm EST) and have noticed you've appeared on several BTR shows. What do you think of the future of audio and video mobile and downloadable ads?

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