More Answers to Your Advertising Questions
By Jim Boldebook
The following contains answers to questions received through this column:
HOW MUCH OF THE AD BUDGET SHOULD BE SPENT ON YOUR WEB SITE?
Dodge, Mazda, Nissan dealer in Georgia wants to know"How much of my ad budget should I spend on my Web site? My 17-year-old son says all of it. My sales manager says nothingit's a waste of money."
This is one of the questions we hear most frequently. A lot depends on the commitment you've made to develop e-business. If you don't have the people to properly manage a Web site, your manager is probably right. Any expense is a waste of money. If you are committed to developing your Web site as a core business, spend whatever you feel is appropriate to develop a new business. But don't try to do it at the expense of the traditional media advertising. In fact, you may want to increase your radio and television advertising budgets to promote your Web site in the same way you would promote a new franchise or location. The best place to start is a visit to your local bookstoreor Amazon.com on the Internet. Look for David Siegel's new book "FUTURIZE YOUR ENTERPRISE." In my opinion it is the best book ever written on what you need to do to succeed on the Web.
SHOULD MY DAUGHTER BE OUR SPOKESPERSON?
The owner of a Chicago area Chevy dealership wants to know if a family member would be the most effective on-air talent. "My daughter is an attorney and does not work at our dealership but my wife thinks she would be the best spokesperson for our dealership because she is an attractive young lady with a great personalityand knows our business better than anyone else. Currently our sales manager is doing our commercials and really likes doing them."
How does your daughter feel about this? If she's enthusiastic about doing your commercials and can effectively deliver your message, it's certainly something to consider, but remember she has a career and a life of her own and may not be available to do commercials in a timely manner. I would also discourage making the change if your sales manager is an effective spokesperson. You may want to consider continuing the use of your sales manager as spokesperson for weekly promotional 'share of market' commercials, and your daughter for special events or 'brand building' messages. My suggestion would be to discuss this issue with several of your top people (without your wife present) and get their opinions.
WHAT'S THE BEST WAY TO CHARGE DEALERSHIPS FOR AD EXPENSES?
The general manager of a Florida dealership group with six stores asks:
"What's the best method of charging advertising expenses to individual dealerships in our group? Sometimes we have to spend more at certain dealerships, but we always divide the costs equallyand some managers don't like it!"
A: If you're running common sale and promotion themes for all dealerships, you need to make adjustments for ad charges for weaker franchises, even if the message is the same for all. My suggestion would be break up the charges in the same percentages as the franchise model share percentages in your market. The exception might be a situation where a weaker new vehicle franchise location has a strong used vehicle operation that would benefit from the overall campaign you're running. The other suggestion might be to run several versions of the same promotional theme with individual franchise offers and bill each dealership for their actual contribution. There should be a base charge to all dealerships regardless of whether you want them to participate in a common promotion.
HOW CAN I COMPETE WITH THE FACTORY?
A dealer from Texas with four General Motors franchises wants to know
"Isn't it a waste of money for us to continue developing a presence on the Internet when the factory is going after the same marketand has all the money in the world to outspend us?"
The manufacturers are able to 'outspend' you in development of a Web site, and in fact may opt to refer customers to dealers of their choosing, or even sell direct. But remember this, the greatest potential of the Internet is the same kind of loyalty and personal service that automobile retailers have offered for the past 100 years.
Customers may visit many Web sites in search of information, but most customers will only make actual transactions on Web sites that offer real customer service by real people on a timely basis. I'm not convinced this is an investment that the manufacturers are prepared to make. Think of all the things you can do on your Web site that would be next to impossible for a manufacturer to do. For instance, what about a community services page on your Web site listing charities and local organizations?
HOW DO I CUT BACK ON MY PRINT BUDGET?
A New Jersey luxury import dealership wants to know: "Every year I want to cut back on print because I don't think it's as effective, but I would lose positions I've had for 12 years. Should I risk losing these positions and save the money?"
In my opinion, newspapers have mastered the art of psychological warfare in the media business. I hear countless stories like yours of dealers spending much more money than they want to in order to retain page positions, free color, etc. My answer is very simple. Do the research. Allocate media dollars according to potential reach, medium effectiveness and specific demographic requirements. For example, if your local newspaper has a circulation of less than 10% of the population in your marketplace, and only 16% of your customers indicate that they checked the newspaper ads prior to shopping your dealership, then does it make sense to spend 60..70..or even 80% of your ad budget in the newspaper? Make a firm dollar budget allocation for each medium, make the best buy you can within the dollars. Just do it.
SHOULD I ADVERTISE ON THE HOWARD STERN SHOW?
A Southern California Toyota dealer asks, "The Howard Stern radio show is a big deal in our market. I know the spots are expensive but I think a lot of people listen. Also, if he (Howard Stern) says something in bad tastedoes that hurt my business?"
The Howard Stern Show is a very popular show in a lot of markets and the advertising rates have gotten quite expensive. The show has a very strong male audience and I'm not convinced that anything said 'in bad taste' on the show will necessarily hurt the sponsors of the show. The thing that bothers me the most about the show..or any other similar format where there are very long periods between commercials, and then 12 or 15 commercials in a row, is that unless you're one of the first few commercials in the stop set, I question how much bang you get for the buck. I've talked to a few "Stern listeners" who confide they switch to other stations during the long commercial breaks because they know how long those breaks will be. Kind of like watching a big movie on TV for the first time. You can almost plan your snack and bathroom break times during the commercials.
Keep those letters and e-mails coming!
Jim Boldebook is President of Creative Broadcast Concepts (CBC), an advertising/marketing agency working with some of AmericaÕs most successful dealerships. jboldebook@dealeronline.com
