Automotive dealership marketing is a competitive business. The trend in the industry is toward consolidation, meaning that there are now fewer nameplates (individual dealerships) out there and many more dealership groups. These groups tend to have large marketing departments and budgets at their disposal, giving them an edge over the smaller players. However, even the smallest "Mom and Pop Shops" can compete with dealership groups with the right advertising and promotional strategy.

This strategy must include online marketing and advertising, because increasingly consumers are spending more time on the Web than with any other form of media, from newspapers to magazines and TV. In 2005 the average dealership spent $571 on advertising and lead generation per vehicle. If you invest even just some of that in online media, you're sure to see a good return on investment (ROI).

Action Steps
The best contacts and resources to help you get it done

Generate Leads

For years, purchasing leads from third party sites has been a quick way to drive traffic for many dealerships looking to establish their Web presence beyond their own Web site. Problem is, this service is available to all dealerships and you find yourself fighting for a limited number of leads with other stores that may not even be in your state. Additionally, at $20 a pop, it can get expensive very quickly if the leads are not high quality or your conversion rate is poor.

I recommend: Purchasing leads as a way to supplement traffic or as a special campaign can make sense for many dealerships, especially smaller independent stores in suburban markets, but it is not likely to be the most cost effective or sustainable way to generate sales long term. Consider limiting your purchase of leads to your best supplier or two and focus more efforts on other Internet strategies with a higher ROI.

If you choose to invest in lead generation, look for lead providers with a high dealership satisfaction ranking. This recent study by J.D. Power & Associates is a good place to start.

Optimize your Web site

As more and more dealerships limit lead purchasing, they turn to their own sites to drive traffic and generate leads organically. Many are redesigning their sites with visual differentiation and Search Engine Optimization (SEO) in mind. The problem is that many dealerships default to the Web design templates offered by one of the few major DMS (dealer management software) providers, meaning everyone's sites look the same. There's also the issue of keeping Web site content fresh. A company site is not a one-time initiative that can be left on its own, but rather is an integral tool in the sales, service, and customer retention process. With nearly 80% of customers starting the purchase process online, it is often the first impression a potential customer has of the dealership.

I recommend: Consider going outside your DMS provider for your Web site design. A smaller or specialty shop will be able to further customize the site to your specific needs, as well as create something that will look visually different from your competitors. Finally, these companies often specialize in SEO and may even offer solutions that will further differentiate the "backend" of your site in addition to the front end.

Some companies specializing in Web site design for auto dealerships include Dealer.com, DealerOn, and Dealerskins. Visit Dealerskins for a free analysis of your current site.

Implement Search Engine Marketing

Search engine marketing (SEM), which encompasses search engine optimization (SEO) and paid search (search engine advertising) is becoming increasingly popular among auto dealerships because it's a way to generate leads without having to pay a third-party lead provider. Another major benefit of SEM initiatives is that they generate site visits from consumers interested in everything from buying a car to getting their existing vehicle serviced. When you purchase a lead, you're paying $20 for information about somebody who is interested in buying a car -- but that's what their interest is limited to. Consider that roughly 50% of the average dealership's profits come from service, parts, and F&I (finance & insurance), and you can see why SEM is an important aspect of a dealership's marketing strategy. Finally, SEO and paid search also allow a dealership to expand its potential market outside of its local region to other counties and even states, creating a larger 'footprint' online.

I recommend: SEM is a hot topic in most industries at the moment, so there's no shortage of information about creating successful SEO and paid search campaigns online. One of the best resources for information on both of these topics is Search Engine Watch, which is also involved in the Search Engine Strategies conferences. These take place several times a year in various U.S. locations (in addition to other countries) and are well worth the price of admission for dealerships who intend to invest significantly in these methods of marketing.

Advertise in Online Classifieds and Auction sites

Print classified advertising has been a staple in auto dealership marketing for years, but the industry has evolved a lot. Today, almost every local newspaper also offers online classified ads that can be bundled with the print ads, or purchased online only. Often online classified placements are free of charge, but if they are not it is definitely worthwhile to spend the extra money on the online ad, as it can greatly expand your audience reach. In addition to local newspaper sites, classified listings can also be bought on such properties as Cars.com and AutoTrader.

I recommend: For the most comprehensive information on both online and offline classified advertising, I recommend a membership with Classified Intelligence, a group that reports exclusively on classified advertising through regular reports. Auction sites are also a good option, especially for vehicles that are going to be wholesaled anyway. Selling these on eBay typically yields more revenue, as well as generates traffic to your site.

Think Outside the Box with Coupons

Beyond these options there are some more unconventional advertising opportunities available for auto dealerships online. One that I believe will gain momentum is online service coupons. With this concept, dealers can augment their service & parts revenue by inexpensively creating printable online coupons for their customers. Automotive resource sites like Servassist Online allow consumers to search for coupons in their region and select those relevant to their needed service or maintenance. For dealers, this is a way to attract and maintain service customers without having to invest in print materials, postage, or distribution lists.

I recommend: Servassist Online Local Coupons (full disclosure: I founded this public service site)

Tips & Tactics

Helpful advice for making the most of this Guide

• •  Before you invest heavily in any one of these forms of online dealership marketing, try a small test campaign. In a month or two review the results and increase/decrease your spending appropriately to stretch your budget further.