Chrysler closes digital divide
Co-op money coaxes dealers to dive into search-engine marketing
Dusty Blechman, business development manager at Adventure Auto Group in Willoughby, Ohio, says his company is becoming adept at obtaining leads from its Google advertising. He says he hopes the dealership continues its digital advertising push.
In an era in which 90 percent of vehicle buyers do some shopping online, Chrysler Group in July had just one in four of its dealerships consistently advertising on Google and other search engines.
That had to improve, and it has, said Jeff Strickland, Chrysler's director of U.S. dealer relations and retail strategies. For comparison, General Motors says more than 95 percent of its 4,347 dealerships participate in a digital package that includes search-engine advertising.
In seven months of nudging dealers with extra co-op money, Chrysler coaxed the vast majority of the dealers at its 2,372 dealerships to experiment with search-engine marketing, Strickland said.
And they have stayed in by and large, he said, even when some of Chrysler's co-op participation in digital advertising was reduced at the end of January. The dealership count does not include Fiat.
"We're hoping dealers will dive into the pool instead of just dipping a toe in," Strickland said.
Auto retailing has been slower to adopt digital marketing than other industries, recent studies have shown. Google is a key player because two of every three visitors to dealership Web sites get there directly from clicking a link on a Google search page, the search giant said.
The Chrysler co-op program was a way to get dealers nationally to try more digital advertising as opposed to TV, radio and print, Strickland said.
When the program was started in July, only 500 to 600 Chrysler Group dealerships advertised on Google and other search engines either by buying pay-per-click links via ad word auctions or with display ads, he said.
The links appear in shaded boxes at the top and right-hand side of Google search pages and take shoppers to dealership Web sites when clicked on.
To coax dealers into the fray, Chrysler in July agreed to reimburse them for the first $30 per car sold that they spent on search-engine advertising, Strickland said. Dealers who used one of three vendors selected by Chrysler to place the advertising were eligible for the co-op payments.
The pilot worked, Strickland said. When Chrysler ended the special $30 per car digital co-op in January, 1,864 dealerships were using the program.
The pilot program also boosted dealership Web traffic, Strickland said. The dealers who participated saw their Web site traffic grow on average 14 percent over the seven months that ended Jan. 31, compared with the first six months of 2012.
Moreover, total lead count, or those visitors asking online to be contacted by the dealership, rose 11 percent on average for participating dealers.
In contrast, Chrysler dealers who didn't enroll in the program on average saw their dealership Web site traffic fall 4 percent over the seven months and total lead count from their dealership Web sites drop 17 percent, Strickland said.
As the Chrysler digital pilot progressed, Adventure Auto Group in Willoughby, Ohio, became increasingly efficient at obtaining Web site leads from its Google advertising, said Dusty Blechman, business development manager for the Chrysler, Dodge, Jeep and Ram store outside Cleveland.
About three months ago, Adventure, which also has a Subaru store, brought in approved Chrysler vendor Haystak Digital Marketing to run its search engine marketing, Blechman said.
Though decreasing its January Google spend by one-third, leads generated from Adventure's Web site jumped to 13.1 percent of total visitors in January from 7.6 percent in December. The Chrysler store sells about 125 new and used vehicles a month.
Blechman said he hopes the results are enough to convince owner Evan Fineberg to continue the digital advertising push.
Adventure historically has relied on traditional advertising to plug incentives and find new buyers, Blechman said.
Chrysler's Strickland has the same hope. Though dropping the $30 per car digital co-op, Chrysler has boosted its reimbursement for the existing co-op program, he said.
Until this month, Chrysler was fully reimbursing dealers for the first $160 per car sold that they spent on advertising and half of the second $90 per car, he said.
But to keep the momentum rolling on digital, Strickland said, Chrysler is now reimbursing dollar for dollar for advertising on the second $90 per car sold as well, for a total of $250. Chrysler also is allowing more digital services to be eligible for co-op reimbursement, Strickland said.
In addition to search-engine marketing, Chrysler also will reimburse, via co-op money, dealers who use live chat on their dealership Web sites or who use vendors that provide online content to keep dealers on the first page of Google searches directly underneath the shaded advertising.
Said Strickland: "We want them fishing where the fish are."
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