NEW ORLEANS -- Ford Motor Co. is using the power of the purse to steer more of its dealers' advertising dollars toward digital media.
In January, Ford began offering to reimburse its 3,200 dealers for part of their cost to advertise on Google and other search engines, said Stacey Coopes, CEO of FordDirect, a digital marketing arm for Ford and its dealers.
Coopes said the program will run for a year. The goal: introduce Ford dealers to paid search if they aren't using it and bolster the budget of those who are.
"Ford is making a big bet on digital," she said at the National Automobile Dealers Association convention here last month.
Coopes declined to say how much Ford plans to spend per store. As with other co-op reimbursement, the amount will be pegged to each dealership's new-vehicle sales, she said.
A source familiar with the program said Ford's monthly reimbursement will average about $500 per store. The source was not authorized to talk about the program and declined to be identified.
Paid search is an advertising form in which dealers bid for keywords that will get their ads a shaded position at the top or right side of a search page on Google or another search engine. Dealers pay for the ad only if a shopper clicks on it or a link on the search page that takes them to the dealer Web site or other landing page.
To be eligible for reimbursement from Ford, dealers are required to use one of four program-certified vendors to manage their paid search: Dealer.com, L2TMedia, PureCars or Search Optics, Coopes said.
Ford joins Chrysler Group, Scion and others that have launched or changed co-op programs recently to increase dealers' digital advertising and capitalize on changing shopping patterns. Nine of 10 shoppers do at least some vehicle research online, studies show. And two of three visitors to a dealer Web site get there via a Google link.
Ford said it also is offering the co-op reimbursement to Lincoln dealers. The program is optional and administered by FordDirect.
In addition to the direct subsidy for paid search, Ford is requiring dealers to put more of their advertising co-op toward digital advertising, such as paid search and banner ads.
Coopes confirmed that in January, Ford mandated that dealers spend 25 percent of reimbursement-eligible advertising dollars on digital media. In July, the figure doubles to 50 percent of co-op ad spend for digital media, she said.
Dealers earn co-op reimbursement money based on the number and cost of vehicles they buy. Under the old co-op system, dealers could get reimbursed for money spent on advertising no matter the mix of media.