How the Landscape of Car Advertising is Evolving for Dealers7 min read
In a Saturday Night Live skit, Jim Carrey couldn’t resist poking fun at a Lincoln commercial featuring actor Matthew McConaughey. Maybe it was because the commercial seemed too much like a throwback to commercials from decades ago — when a good-looking man or woman seemed to be the standard formula to get people to line up to buy cars.
HOW THE LANDSCAPE OF CAR ADVERTISING IS EVOLVING FOR DEALERS
As with everything else, car advertising has been evolving to meet consumers’ interests. Back in the ’50s and ’60s, car advertising was a bit more basic — offering informative details like mileage, engine displacement, and speed. And the decadence of the 1980s led to those McConaughey-style ads: The car you drove had a lot to do with your personality. Luxury cars were associated with your accomplishments, while ads for sporty cars might feature a catchy slogan or a joke or two.
And, of course, in recent years, technology is the centerpiece of many TV ads. But maybe there’s an occasional throwback to those luxurious lifestyle commercials. Here’s how the landscape of car advertising is evolving:
Mixing It Up
Today, car dealerships are scaling back on traditional advertising, according to a report from Borrell Associates. The report, “2016 Auto Outlook: The Thinning of the Media Pack,” notes that per-vehicle advertising costs fell 22 percent from 2009 to 2016.
The number of car dealerships has also declined — between 2011 and 2016, the average midsize market lost 16 dealerships, many of them smaller car lots that merged with large dealers.
So, there are fewer car dealerships advertising, and that’s driving down the cost of ads. Plus, dealerships are shifting the majority of their budget to digital media. Dealers that want to stay relevant are abandoning the business-as-usual mindset, realizing that traditional advertising may not be the best way to connect with modern consumers.
Innovation Is Essential
In 2014, Ian Robertson, board member and overseer of sales and marketing for BMW, told Forbes contributor Carmine Gallo, “The old model of dealerships are, in my opinion, under extreme risk for the future if we don’t change.”
At the time, BMW was rolling out its concept for “product geniuses” – experts on BMW products that work at dealerships and explain car details to shoppers, but are not involved in sales.
BMW first tested the product genius concept in Europe in 2012, and by 2014, it reported a 10 to 15 percent increase in the purchase of high-end options.
Rethinking The Dealership Experience
Alain Visser, senior vice president of the new car brand Lynk & Co., says young people are uninterested in visiting a traditional car dealership. Dealerships must become something more than they are currently, whether that means adding amenities or building their reputation within their communities. These three dealerships have embraced that challenge:
Big Two Toyota in Chandler, Ariz., would be a destination, even if it had no cars to sell. The dealership houses a cafe, barbershop, nail salon and an enormous play area for kids, complete with an arcade. While customers wait, they can get a 15-minute chair massage.
Barton Chevrolet-Cadillac, in Newburgh, N.Y., has earned the respect of the community by housing the local fire department, as the firehouse undergoes remodeling.
According to Auto News, dealership owner Ron Barton saved local taxpayers $100,000 by allowing the fire department to occupy a vacant space on his property – all of the other temporary options would have cost the fire department $8,000 to $10,000 per month.
Kunes County Auto Group, in Delavan, Wis., is shifting its focus from promoting its cars to promoting its people. The dealership encourages sales staff to have an active social media presence, and the marketing department helps employees set up and format their personal Facebook pages.
When customers do visit a dealer location, it’s likely they already know who works there and have some connection to a salesperson there. The Kunes group also engages in volunteerism and charitable giving.
Traditional Car Advertising Not Dead Yet
While there seems to be scaling back on traditional car advertising, there is still evidence that it is still working as part of a mix of marketing approaches.
Gordon Borrell of Borrell Associates had this to say about the trend: “Even after 20 years of plowing more and more money into Internet advertising, dealers haven’t finished their scale-back of traditional media.
“To be clear, I don’t think the scale-back is wholesale,” he added. “The cuts are more directed to inferior media companies. Dealers are simply shutting the door on companies that keep sending reps who see digital media as a competitor, not a complement.”
The report revealed that car dealers consider different avenues of advertising as evening out — with “online ads” being rated as just as important or effective as TV advertising in generating leads. Also, social media was rated as a top tier source of leads.
Borrell, describing this trend as a “thinning of the pack,” said companies that embrace a comprehensive solution will be the most competitive. On the other hand, those resistant to changes in the industry will view them as negative — and, as a result, will be susceptible to falling behind.