Ford Motor Co. is joining other automakers in using advertising co-op funds to get its 3,200 U.S. dealerships to do more digital advertising.
As part of a new program this month, Ford is requiring dealers to spend 25 percent of reimbursement-eligible advertising dollars for digital media, said Rich Savino, dealer principal of All American Ford of Old Bridge (N.J.) and a member of the Ford National Dealer Council.
In July, the figure doubles to 50 percent of co-op ad spend for digital media, Savino said.
Dealers earn co-op reimbursement money based on the number and cost of cars they buy. Under the old co-op system, dealers could get reimbursed for money spent on advertising no matter the mix of media.
Ford worked closely with dealers to change the co-op mix as an incentive to make greater use of digital marketing, Savino said.
While most dealers recognize the importance of the Internet in car shopping, the program gives dealers incentives to "dip their toes" into paid-search, banner ads, ad retargeting and other digital sales tactics, Savino said.
Ad retargeting is the ability, with cookie tracking technology, to have ads follow shoppers from Web site to Web site. "You have to play in the digital game," Savino said.
Ford joins Chrysler Group, Scion and others who have changed co-op programs recently to prompt more digital advertising by dealers. Ninety percent of shoppers do some or all of their vehicle research online, studies show.
In a statement, Ford said its Digital Advertising Solution is an optional program also offered to Lincoln dealers. It is administered by FordDirect, a digital marketing arm for Ford and its dealers.
Savino said the total advertising reimbursement available to each dealer depends on the value of the vehicles they buy from Ford. Co-op represents 0.25 percent of the sticker price of the vehicles bought, he said.
Dealers are eligible for co-op funding if they manage their own digital advertising spending or select third-party vendors or a FordDirect program for assistance, Savino said.
He said All American Ford for years has spent about three-quarters of its $75,000 a month advertising budget on digital media. He said he bought the store in 2008 at the start of the recession and had to use digital media to spur sales. The store sold about 2,000 new vehicles and 1,000 used vehicles in 2013.