The Catalyst

SOUNDBYTES FROM THE AUTOMOTIVE INDUSTRY
REAL AUTO ANSWERS WEBINAR | ESA & COMPANY
The following article is one of a series highlighting the insights from ESA’s Real Auto Answers webinar. The webinar’s panel included Steve Finlay of Ward’s Dealer Business, Adam Armbruster of ESA, and four principals from successful auto dealerships.

Just as the pace of change in the automotive industry has accelerated in the past 18 months, the same is true in local media. So how does an auto dealer, in a rapidly evolving industry, make sense of the options and efficiencies available in a rapidly evolving media market?

As always, dealers want to draw physical ups to the lot, but today are also keeping a close eye on their website traffic. And whether we are talking physical traffic or internet leads (such as website visits and email inquiry), local broadcast television stands head-and-shoulders above the field in answering the call, and does so with high efficiencies. This point met with resounding consensus from the panel.

In 2010 and beyond, we expect to see continued disenchantment with (and a decline in) the effectiveness of paid leads, another point with which the auto marketers on the webinar panel agreed. As is mentioned in this forum and in many other places, the use of paid search and paid leads to drive local retail business is ineffective (and growing more so) when compared to a medium like broadcast television.

BROADCAST TV STILL MOST EFFECTIVE FOR AUTO DEALERS
Listen to Webinar Panel discuss today’s media options
ESA’s Real Auto Answers | May 14, 2010 | MP3 File (1.7mb)

Another temptation of auto dealers is to try cable television, which time and again has demonstrated glaring inefficiencies and scale issues for destination retailers of all sorts, let alone auto dealers. As Scott Fink of Hyundai of New Port Richey and Wendi Egbert of Southtowne Automall explain, it is a combination of broadcast’s reach and extreme efficiencies which trump cable for the auto dealer. The much higher CPMs of local cable television advertising (relative to broadcast TV) fly in the face of the efficient “good habits” dealers have acquired during the recent economic contraction.

BROADCAST TV TRUMPS CABLE FOR AUTO DEALERS
Listen to Scott Fink and Wendi Egbert
ESA’s Real Auto Answers | May 14, 2010 | MP3 File (0.8mb)

Smart media decisions like the ones detailed above will go a long way in providing a clear path to growth and profitability for auto dealers in 2010. The use of local broadcast TV is the perfect choice for dealers, as it aligns with their efforts to retain the efficiencies they’ve worked so hard to implement. In our next article, we’ll ask the mega-dealers in the panel what additional considerations they’ve included in their plans.

Dave Eckstein is a partner in the firm ESA & Company, based in Red Bank, New Jersey. Dave specializes in highly profitable market share growth for local business and gets a kick out of demonstrating a declining cost of customer acquisition for his clients.