Automotive manufacturers and dealers are doing a much better job of using the web to sell cars and for the first time industry advertising is clearly shifting from print to digital, Steve St. Andre, president and COO of FordDirect, will tell attendees at the Internet Retailer 2005 Conference and Exhibition in Chicago on June 8.
Original equipment manufacturers and dealers have relied on time-tested TV/radio commercials and newspaper ads to generate new-car sales leads. But with the high cost of print advertising and the fact that TV viewing is declining among certain segments of the population, auto manufacturers are now investing more in stand-alone web-based marketing strategies or in integrated campaigns that use television advertising to drive traffic to a manufacturer’s web site, which in turn can capture specific leads for dealers, St. Andre says.
"This year we are clearly beginning to see a shift to more forms of web-based advertising," St. Andre says. "With the web, manufacturers and dealers can more effectively measure the customer response rate to a specific campaign and integrate the Internet and e-commerce into their TV advertising."
In April, FordDirect, a joint-venture Internet marketing cooperative that Ford Motor operates with about 3,900 Ford and Lincoln Mercury dealers, set a record of using the web to close more than 22,500 new vehicle sales, compared to a previous monthly record of about 19,000, St. Andre says.
Web sales are up for FordDirect in part because Ford is placing TV ads on widely watched shows such as American Idol that contain a strong web element, meaning the ads are meant to drive leads to a Ford web site where car shoppers can download more video, research and shop for a car or locate a dealer.
But even though auto dealers and manufacturers are becoming more web savvy—a recent survey from the National Automobile Dealers Association says 98% of dealer web sites are interactive, with most allowing car shoppers to view stock and MSRPs, fill out finance forms, and schedule sales and service appointments—auto retailers still need to do a much better job of using the web to understand customer behavior and acquisition, St. Andre says.
For instance, many manufacturer and third-party automotive sites feature extensive research tools, but still don’t deliver enough targeted leads to dealers. "A web site can’t just send a message to a dealer saying a young family is looking for a new mini-van," St. Andre says. "We need to do a better job of using the Internet to understand their buying behavior. They may be in the market six months from now and would be receptive to hearing about incentive specials then or being notified which dealer has available inventory."
The next generation of automotive retailing web sales will feature more extensive use of applications that dealers and manufacturers can use to understand one-on-one buyer behavior. "That’s the direction we are taking at FordDirect," St. Andre says. "Customers respond differently during the buying process and we need to better understand their experience and motivation."
St. Andre’s session—"Why Detroit is Driving to the Web"—will be from 11 to 11:30 a.m. on Wednesday.
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