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Cobalt Newsroom - In the News
Integrating tiers of ads can stretch a tight budget
Source: Automotive News
June 2009
National, regional, local messages need links to create leads
Having slashed national advertising during the recession, automakers are turning more to online ads by regional dealer associations to help make up the difference. "As Tier 1 has been reduced by necessity, there's more accountability for the branding element in Tier 2," said Philip Zelinger, president of Ad Agency Online LLC. But it can be tricky mixing the factory's brand message with the dealers' hard sell - especially online. Automakers and dealers don't always link their digital messages effectively, and that can lead to lost business, warns a leading provider of digital marketing services.
Cobalt Group, of Seattle, advises factories and dealers to work more closely together - and to spend more - on Tier 2 digital marketing. Tier 2 advertising by regional dealer associations is funded by car companies and local dealers. It is sandwiched between Tier 1 national advertising by automakers and Tier 3 local advertising by individual dealers.
Ad executives and dealers agree that integrating online marketing messages from factory and dealer sites creates more and better leads and increases the likelihood that those leads will become sales. More than four out of five shoppers use the Internet when they buy a car or truck, industry studies suggest. "There needs to be coordinated, consistent messaging across tiers," said Matt Muilenburg, Cobalt's vice president of enterprise marketing solutions. "Tier 2 is critical to connecting OEMs' marketing messages to dealer sites."
Tier 2 sites can link shoppers directly to dealers, Muilenburg said. When such programs are coordinated effectively, he said, they generate sales leads from more than 10 percent of site visitors. When they are poorly integrated, he said, the rate is less than 1 percent. And the best-integrated programs convert leads into sales at nearly twice the overall industry conversion rate of about 8 percent, Muilenburg said.
Chris Reed, Cobalt's chief marketing officer, said his company is working with three automakers and more than 7,000 dealerships on Tier 2 digital programs. He declined to identify the car companies.
Last year, regional dealer associations spent nearly $2 billion to advertise in U.S. media, roughly 15 percent of all ad spending by automakers and dealers, according to TNS Media Intelligence. As much as 80 percent of Tier 2 spending goes to TV, Cobalt estimates. Shifting some of that spending to digital marketing, the company argues, could cut overall costs while boosting efficiency.
Read the original article here.
