The auto retailing world is changing. On the sales and marketing front, here is what my ad firm is seeing, based on a study we did:
- Fewer dealers means more dealer leverage over media
Owners of auto dealerships will experience an increase in buying power in the market. They will attempt to leverage that power to demand lower rates, more concessions, more creativity and better service.
- Lower auto sales might not mean lower dealer ad budgets
Sales could decline short-term, but as the economy improves auto dealer ad budgets will increase quickly.
Also, some manufacturers' Tier 2 ad dollars will be reassigned to Tier 3, thereby making available to local dealerships an additional 25% to 50% in advertising revenue.
- A shortage of megadealer group experience
Dealership groups are growing. New nameplates appearing on dealership lots will be met with a lack of dealer experience in these lines. Media sales managers, especially in the medium of TV, must be versed in marketing multiple nameplates in varying ways, all while serving the greater good of the group.
An Eckstein, Summers, Armbruster and Co. report reveals the most successful megadealer TV and web advertising tactics.
- Branding dealerships will end
The continued high cost and overall ineffectiveness of “branding” dealerships will be exposed. It's not about the dealership, it's about the customer's buying and owning experience.
- It's not just about “ups” anymore
Traffic increases will not be the only deciding factor in a successful sales performance. Separating shoppers from buyers is one new skill set in demand by the best auto marketers in the industry.
- Ad agency fallout
Dealership retail marketing skills will be tested over the next 12 to 18 months. The automotive industry has undergone more change in the past five years than in the previous 50, and that trend will continue.
Advertising agencies that don't evolve with the needs of the auto industry will fall prey to cancellation or consolidation.
- Measurement matters more
Dealers will buy advertising that is both effective and measurable.
Knowledge of proper advertising measurement technique will serve both the auto dealer and the ad outlet. Surveys by front line staff are too error-prone.
Adam Armbruster is a partner in the retail/broadcasting consulting firm Eckstein, Summers, Armbruster & Co. in Red Bank, NJ. He can be reached at [email protected] and 941-928-7192.
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