Twists and Turns in the Automotive Market

2008 was not the year everyone expected. Financial markets imploded, gas prices skyrocketed to $4.00 per gallon, and then dropped precipitously well below $2.00 per gallon. 2009 certainly begins with tons of question marks, with tight credit, consumer spending cutbacks and the retrenching of U.S. car manufacturers.

As reported by the Los Angeles Business Journal this week (http://losangeles.bizjournals.com/ losangeles/ othercities/ sacramento/ stories/ 2009/01/05/ daily49.html , Cox Enterprises is stopping the publication of AutoMart and AutoExtra magazines. It is expected that the magazine versions of AutoTrader and TruckTrader will cease publication in 2009 also.

This is one more indication that promotional opportunities on the Internet for dealerships provide proven value and return on investment that just cannot be replicated in offline media.

As discussed in my blog earlier this year, Jonathan Miller, former CEO of AOL reports that ad spending online lags consumer activity online by a factor of 3 to 1. Said another way, advertisers should triple their online presence to keep up with the rate of consumer’s media consumption online. This is a universal statistic, applying to many industries, and closely mirrors what we see in the car industry.

For dealers who have been able to withstand some of the changing and challenging market conditions, opportunities abound to redefine your business and increase sales. Internet tools are changing on a daily and weekly basis. We encourage all dealers out there to take a fresh look at their Internet strategy and to creatively leverage the Internet tools that make sense for your dealership.

Smart Dealer Decisions

An effective online strategy requires a consistent presence, with vehicles priced to market, and detailed descriptions to build trust among potential customers. You don’t have to be an expert to be effective online. You need to be consistent, and put yourself in your customers’ shoes and understand the information they need to be comfortable in making an online purchase.

I’m often surprised that dealerships do not put more effort into trying different things online. Recognizing that some things will work, and others won’t, the beauty of the Internet is that it greatly lowers the risk of failure. And even if you try something that doesn’t work, the Internet also lowers the cost of any failure. And the flip side is, there are many success stories regarding Internet marketing for dealerships.

Besides having a dealer website, having easy access to a national or international market, allows dealerships to do things on the Internet which would not be successful locally. There are dealerships who have eBay auctions down to an art and leverage other online vehicle listing sites, providing detailed information to buyers so they are comfortable completing the transaction even if they are thousands of miles away. The Internet breaks the boundaries of a traditional dealership being defined by geography. Ignoring this reality can result in your efforts being marginalized locally.

AutoXloo Can Help Redefine Your Dealership

EBay reports that a car is sold every 60 seconds on their site. If you think about it, that makes EBay the largest used car dealership in the United States. They make less than $100 on each car sold, but they help transact a lot of cars. AutoTrader reports listing 6,000,000 vehicles at any given time, broadcasting their inventory to Kelley Blue Book (kbb.com), Yahoo Autos and others.

Certainly the Internet continues to play a more and more important role in the continued success of traditional dealerships. And gives them a unique opportunity. I’m often surprised that dealerships do not put more effort into trying different things online. Recognizing that some things will work, and others won’t, the beauty of the Internet is that it greatly lowers the risk of failure. And even if you try something that doesn’t work, the Internet also lowers the cost of any failure. And the flip side is, there are many success stories on the Internet.

Having easy access to a national or international market, allows dealerships to do things on the Internet which would not be successful locally. There are dealerships who have eBay auctions down to an art, providing detailed information to buyers so they are comfortable completing the transaction even if they are thousands of miles away.

We invite you to take a look at what AutoXloo offers to allow dealerships to be successful online. These include dealer website, and datafeeds to serve both national and international markets.

Untapped Potential of Internet

I found a statistic this past week that speaks volumes about how companies are underutilizing the promotional opportunities on the Internet.

Jonathan Miller, former CEO of AOL reports that ad spending online lags consumer activity online by a factor of 3 to 1. Said another way, advertisers should triple their online presence to keep up with the rate of consumer’s media consumption online. This is a universal statistic, applying to many industries, and closely mirrors what we see in the car industry.

NADA reported in 2007 that the average dealership spends $590 on advertising costs to sell each vehicle (NADA Industry Analysis Division). 88% of this is split among offline media (newspapers, TV, radio, and direct mail) and only 12% on their Internet program. Dealerships continue to spend a disproportionate amount of their marketing budgets offline, in media that continue to see sharp decreases in their audience. There are many smarter, more cost effective Internet promotional opportunities available for dealerships. As a reminder, AutoXloo offers several software tools that help dealerships manage their online presence. Take a look at AutoXloo.com.