The Dealer Impact Blog

3 Steps to Recession-Proof Your Online Marketing

Written by: Bryan Eisenberg
Taken from grock.com newsletter
March 28, 2008

Everyone’s using the “r” word. Just a month or two ago, online marketers were whispering the word for fear of contagion. Now it’s spoken out in the open. We all seem to sense that we’re in a recession or that one’s stalking us and tapping on our shoulder.Some sites are experiencing slight sales declines; others are prepping for the recession by trimming marketing budgets and tightening their belts in other areas. Online marketers are being asked to do more with less. It seems it’s going to get worse.

SEM increases as spending continues against gloomy economy

From Digital Dealer
Volume 3, Issue 13
March 27, 2008

Search engine marketing (SEM) spending exceeded projections in 2007 and, based on survey responses by marketers and agencies, the search marketing industry will exhibit continued growth, according to preliminary findings of the 2007 State of the Market survey by the Search Engine Marketing Professional Organization (SEMPO) released at the Search Engine Strategies conference.

While the numbers appear strong and reflect a desire for marketers to continue to spend on search, the survey can’t estimate the result of a shortage of searches caused by a major economic downturn. However, a critical finding is that search marketing spending is increasing at the expense of print magazine advertising, Web site development and other marketing functions, as marketers shift the portions of their spending pie, following consumers as they increasingly rely on search engines to conduct pre-purchase research.

The online survey by Radar Research was completed by 867 search engine advertisers and SEM agencies and administered via IntelliSurvey Inc.

Key Findings:

• The North American SEM industry grew from $9.4 billion in 2006 to $12.2 billion in 2007, exceeding earlier projections of $11.5 billion for 2007.
• North American SEM spending is now projected to grow to $25.2 billion in 2011, up from the $18.6 billion forecast a year ago.
• Marketers are finding more search dollars by taking budget monies from print magazine spending, Web site development, direct mail and other marketing programs.
• Paid placement captures 87.4 percent of 2007 spending; organic SEO, 10.5 percent; paid inclusion, .07 percent, and technology investment, 1.4 percent.

“The spending statistics show search engine marketing continues to prove its worth in the larger marketing arena. However, in light of the concerns about the overall economy, it’s important to note some of this spending is the result of shifting marketing dollars from other offline and online marketing endeavors,” says Jeffrey Pruitt, SEMPO president and executive vice president, corporate partnerships, iCrossing.

SPENDING DRIVERS

The 2007 survey showed an increase in North American SEM spending projections from $18.6 billion to $25.2 billion. According to respondents, the drivers behind this higher estimate are advertiser demand, rising costs of keywords and pay-per-click campaigns, an increase in the number of small- to mid-sized businesses using SEM, greater consumer participation in search and increased interest in targeting, such as behavioral and demographic targeting of searchers.

Fewer advertiser respondents in 2007 reported an increase in paid placement prices than the previous year - two-thirds compared to almost three-quarters in 2006. However, a key finding is that as with last year, approximately 75 percent said they could tolerate further rises in paid placement prices, and as last year within that 75 percent the respondents are approaching a spending ceiling - more than half want those expected price increases to be 30 percent or less.

“While CPC price inflation has slowed, marketers are finally beginning to recognize the value of search, and we expect search prices will hold and may even continue to move upward based on survey data,” says Gordon Hotchkiss, SEMPO chairman and president, Enquiro Search Solutions Inc.

http://www.imakenews.com/digital1/e_article001048907.cfm?x=bcm7rb8,b4TSprpk

Still Not Gathering Customer Emails? Really?!

So I was working with a client recently and asked, as a part of a marketing strategy session, what percentage of customers in their database they had email addresses for. A sheepish look came over the owner’s face, and he hemmed and hawed a bit before telling me they didn’t have any customers email addresses because, “The software didn’t have a field for it.” It took everything I had to keep from smacking him across the face and asking him how he was enjoying life in 1987.Two things were wrong here… One, they were still using the same contact management system that they’d started using in the early 90s. Second, they thought this was somehow fine and dandy.Email is arguably the most significant communications development since the invention of the telephone. It allows for instant communication at virtually no cost. And this company didn’t think it was an important tool to be using. And my guess is, they’re not alone out there.

A Familiar Face

As web technology evolves, and more and more of your marketing is online, it’s increasingly important to see that your digital brand is a proper reflection of your offline marketing materials.

When someone sees your web address in a newspaper ad and then types it into their browser, do they see a familiar face? Do the website and newspaper ad look anything alike? Are the colors and graphic styles consistent? Is your logo even the same?

You’d be shocked to learn how many times we find dealerships where these simple things are not the case. And in this era of near-constant connectivity, such a thing should be inexcusable.

D. Jones
Marketing Strategist/Creative Consultant
SmackDabble, LLC

HomeNet Powers Dealer Impact’s Proactive and Plug-In Technologies

Press Release

WEST CHESTER, PA - March 17, 2008 - Automotive technology provider HomeNet, Inc. announced today that its system plays a powerful role in Dealer Impact’s newly released Proactive marketing tools, as well as its Plug-In Technology.

“We rely on partners like HomeNet to power the back-end technologies that allow our front-end strategies and tactics to reap huge rewards for our dealerships,” commented Brian Cox, Dealer Impact CEO.

Dealer Impact’s new Plug-In Technologies use HomeNet’s Inventory Online (IOL) marketing suite to edit and deliver inventory information. “This data makes it possible for us to deliver timely, relevant marketing messages to our dealerships’ customers,” says Cox. “And because HomeNet has such a well engineered product, we have been able to build tools and technologies that will plug and play with any dealership’s web system.”

Dealer Impact’s Plug-In Technology tools are modules specifically designed to work with whatever web system a dealership may be using. These powerful, easy-to-integrate tools can “plug in” to a dealership’s existing site to add a variety of functionality. Dealer Impact’s Autopilot e-Marketing, Video Generation System, Virtual Notification System and Rank King Search Engine Marketing & Optimization are among the “plug and play” tools that Dealer Impact is now offering.

HomeNet’s Inventory Online (IOL) is a vehicle inventory management and marketing system, designed to help automotive dealers sell more cars online. IOL’s suite of web-based software applications streamline the process of converting raw vehicle data from the DMS (dealer management system) into consumer-friendly virtual advertisements anywhere on the Web. Complete with DMS polling, Premium VIN Enhancement, an intuitive online interface, automated distribution to 3rd-party services, and much more, IOL is the most comprehensive solution serving the automotive industry.

Dealer Impact Systems assists automotive dealerships nationwide to attract, close and retain more customers through a variety of innovative digital marketing technologies and strategies. These tools and strategies are combined in Dealer Impact’s iDeal Digital Marketing System, a comprehensive suite of digital marketing tools.

HomeNet, Inc. is a privately owned automotive technology provider. Founded in 1996, HomeNet’s core focus is providing innovative technology solutions to help automotive dealers increase online sales. HomeNet offers its products to a variety of customers including dealers, OEMs, website providers, CRM providers, digital lot management firms, finance/leasing agents, auction agents, and more. The company is based on Christian principles and is headquartered in West Chester, PA, with satellite offices in FL, GA, IA, TN, TX, and UT. For more information, please visit www.HomeNetinc.com.

Playing Nice With Others

Improve the customer experience through more flexible technology. 

It sounds crazy to say, considering most of us can’t remember how we ever lived without it, but the Internet is just growing out of its infancy. And one of the downsides to still being a new technology is that there’s yet to be any standardization. Much like BetaMax and VHS, or the recent battle between Blu Ray and HD DVD, there are a number of competing technologies out there being used to build web sites and integrated web systems. 

JAVA, .net, ASP, PHP, HTML… the list of coding languages and formats goes on and on. They all work just fine and they all have their place. The problem is that they don’t all play nice together. And that limits your flexibility when it comes to adopting new technologies and using new web marketing tools.  

In short, these technological limitations can restrict your ability to sell cars and reach maximum profitability. That’s unacceptable, but what can you do about it? 

Well the first realization that you should arrive at is that there is absolutely no reason that all your web technology should come from one provider. Different providers bring different things to the table, and by combining their technologies, you can expand your capabilities and ensure that you have the best of everything.  

“Sounds great, but didn’t you just tell me that different technologies don’t mix?” 

Yes, but a few enterprising companies have set out to address that specific issue. These companies provide “plug and play” web tools that are specifically engineered to work with any system you might have. These tools allow you to add new functionality without upsetting your current system administrator.  

How might this work? Well perhaps your current web system doesn’t allow for streaming video. Or maybe your site doesn’t perform well on the major search engines like Google and Yahoo. Well, by employing a plug-and-play video technology or search engine optimizer, you can add this functionality to your site and provide a better experience for your customers.  

And after all, isn’t improving the customer experience what it’s all about?

The Hidden Costs of Doing It Yourself

Dealerships around the country, from rural farm communities to the big city big boys, handle their websites in a variety of ways. Some outsource it all, others try to “save money” by handling it in-house with a 19 year old computer whiz.

And that sounds great, but let’s looks at what you might be giving up by adopting the latter school of thought…• When you’re building and managing the site on your own, or with a small local shop, you can’t capitalize on all there is to learn from other dealerships using a common system or provider.
• Dealership Digital Marketing specialists know the business inside and out… they’re specialists in selling cars online – not just in building websites.
• By outsourcing, you eliminate the cost of that dedicated staff.
• You’re unable to tap into various data sources that can keep inventory and other information on your site as up to date as possible.These are only a few of the hidden costs you incur when building and maintaining your web system “the cheap way.” Remember, just like you tell your customers, you get what you pay for.D. Jones
Marketing Strategist/Creative Consultant
SmackDabble, LLC

Your Ad Agency (probably) HATES the Internet

As we all know, the Internet has drastically changed the way companies of all makes and models go to market. But what is often overlooked is how the Internet has undermined one of the key players in many marketing circles – the advertising agency. Agencies make money in a variety of ways, but their most profitable dealings usually involve marking up services provided by others. Printing, media placement, postage, fulfillment… they mark it all up by as much as 20%. And that’s why they shy away from digital marketing tactics – printed pages, postage, media costs or other fees they can mark up, digital marketing cuts into their margins. They’d much rather sell you a 50,000 piece direct mail campaign or a 12 month radio buy. They know how to do that stuff and how to make money on it. So regardless of whether digital tactics make sense… don’t expect them to come pitching you some great new web-based idea.D. Jones
Marketing Strategist/Creative Consultant
SmackDabble, LLC

4 Factors Stunting Online Growth

By Steve Latham
From iMedia Connection
March 3, 2008

Marketers are still spending just 7.5 percent of their budgets on a medium consuming 30 percent of their audiences’ time. Find out why and how to raise that ratio.

When was the last time you made a considered purchase (airline, hotel, rental car, jewelry, clothing, electronics, gifts, automobile, etc.) without doing online research before you bought? Even if you prefer to buy offline, would you make a big purchase without pre-shopping on the web? While some still like to do things the old-fashioned way, the vast majority of consumers rely on the web to do research and price comparisons before they make a purchase.

Every marketing, advertising and communications professional is aware of how the web has changed our daily lives. Media consumption has changed dramatically over the past 10 years, with the web now a close second behind TV in terms of daily media consumption. A recent study published by IBM showed that people spend almost as much time online as they do watching TV. Credit Suisse reported that only TV accounted for a higher share of daily media consumption (measured by time) than the web.

But if you think about the quality of that consumption (passive TV viewing vs. active online engagement) it’s not hard to argue that interactive may be the single most important medium for reaching and engaging consumers. By 2011, online consumption will surpass TV as the number one medium worldwide. The trends are unmistakable — media consumption has become very fragmented in recent years, and it’s never going to return to the way it used to be.

Despite this, some industries have been slow to adapt to changing consumer trends. Overall, marketers invest only 7.5 percent of their advertising / marketing budget for online initiatives. If consumers spend 30 percent of their media time online, why has allocation of media budget not caught up? 

Why companies don’t invest online
McKinsey recently published a study of 410 marketing executives in retail, telecomm, technology, business services and energy. McKinsey reported that the primary barriers to online investment were as follows:

• Insufficient metrics to measure impact: 52 percent
• Insufficient in-house capabilities: 41 percent
• Difficulty of convincing upper management: 33 percent
• Limited reach of digital tools: 24 percent
• Insufficient capabilities at agency: 18 percent

Combined, insufficient capabilities (in-house and agency) is the leading (59 percent) deterrent to investing online. This is not a surprise as online marketing is still relatively new, somewhat complex and changing rapidly. Most companies are still trying to make sense of new media and develop strategies to utilize it. After years of one-off efforts, many are taking time to define their key objectives, strategies, tactics and requirements for achieving them.

The tight supply of talent is also a problem. For both brands and agencies, finding skilled people to execute digital strategies is also a significant challenge.

The second leading hurdle (insufficient metrics to measure impact) is a bit mystifying, as online marketing is much more measurable compared to traditional media. I believe this sentiment stems from translating clicks and page views to metrics a CFO will understand (e.g. revenue, profit). 

The economics of online marketing are still challenging for many, which leads to the number three barrier, which is the ability to convince upper management. Only a small subset of marketers can develop a compelling business case (supported by numbers) to convince upper management to invest in new media. But even with a solid business case, it’s still difficult sometimes to convince upper managers to invest in a medium they don’t fully understand.

So far, there should be no surprises. However, the McKinsey study doesn’t tell the whole story. Over the last five years, we’ve worked with dozens of companies with $1 million+ marketing budgets. During that time, we have found several other lesser known reasons that prevent companies from investing online. Several of these are not going to show up in a survey.

1. Misperception that online marketing is only needed if you have ecommerce. Only a small percentage of companies who advertise online actually sell online. In fact, some of the biggest online advertisers do not sell online. But they understand that most consumers use the web to do research before they go to the store. Shop.org reported that more than 70 percent of online searchers make offline purchases. For every person who buys online, three are buying offline. And since people tend to spend more and shop more frequently in-store than they do online, the value of an in-store customer is relatively higher. So traditional retailers, suppliers and service companies should be willing to spend even more to reach customers than their online competitors. Yet, this misperception still persists.

2. Status quo mentality. Many are uncomfortable with change or learning new things and instead prefer to maintain the status quo, doing what they’ve always done. They are more concerned about rocking the boat or putting themselves at risk than they are motivated to achieve great results. The truth is that few will actually get fired for doing what they’ve always done. But this may change when senior managers start asking why they don’t show up on Google, why their competitors are being marketed on Facebook or why their competitors are gaining share at their expense. C-level executives are demanding more from their marketing teams. Those that want to stay ahead of the curve need to realize that if they are not effectively using the web, they are falling behind the competition.

3. Accountability. Some marketers have had the luxury of not being accountable for results. Faced with new technologies and programs that measure results and quantify the impact of impressions, engagements or transactions, these people are threatened. Over the years we’ve heard several times, “I get paid to place the ads (or send the email); whether or not they work is not my concern.” We expect this will change as more executives realize marketing can be measurable, and marketers should be accountable. Again, those who are looking ahead will take action before it is mandated to them. By then it may be too late.

4. Changes to business processes. Online marketing is not just another channel; it often requires a change in how you do business. It first requires alignment between marketing and the IT department; while marketing “owns” the website, the department often relies on IT to make things happen. Second, it poses new challenges for decentralized organizations. If your marketing organization is segmented by brands, product lines or geographic regions, you’ll find it’s a challenge to meet the needs of each stakeholder. For most companies, inter-departmental cooperation and new business processes are required to fully utilize the web to reach and engage each of your target audiences in an efficient, profitable and brand-enhancing way. 

Regardless of the health of the economy, the trends are unmistakable. Digital will continue to take share from traditional media, and marketers must adapt to the changing times. Savvy marketers will take advantage of the opportunities in online and mobile marketing; those who drag their feet are in for an uphill struggle. 

http://www.imediaconnection.com/content/18504.asp