In January, Matthew Kane, a former construction company owner, launched Automotive Direct, a chain of local tabloid newspapers filled with dealership ads.
Automotive Direct is mailed weekly or twice a month to every home in a market. An edition has 16 to 32 pages.
Kane began publication in Naples, Fla., and has expanded to eight other U.S. markets, including Austin, Texas; Charlotte, N.C.; Las Vegas; and Tampa, Fla.
"We're beating newspaper (ad) rates about 30 percent and in some cases above 50 percent," Kane says. He charges $4,810 for a full-page ad in his Tampa edition. A full-page ad in the local daily newspaper, The Tampa Tribune, costs $3,500 to $15,000, the newspaper says.
Kane says dealers in other cities are asking him to enter their markets. Automotive Direct is preparing to open offices in Los Angeles and Atlanta, he says.
Jake Kelderman, director of automotive industry and ad agency relations for the Newspaper Association of America, said Automotive Direct is not a competitor to daily newspapers because it does not offer editorial content.
But Kane says he plans to create a Web site and editorial content to complement the print ads.
"We're the little fish swimming in the big (media) shark's pond," he says.
Consultant Hensey says some of his clients, such as Sterling McCall Automotive Group in Houston, pay local radio personalities $250 to $2,000 a month to promote their dealerships on the air.
Another client, Sheehy Auto Stores in Fairfax, Va., is investing heavily in advertising on Web sites and in e-newsletters, Hensey says.
The Internet "is creeping its way into the most hard-core car sales," says Duncan Scarry, president of Moore and Scarry, an automotive advertising agency in Fort Myers, Fla.
"When we do campaigns for the traditional dealer tent sales, we do radio, newspaper and direct mail," says Scarry, whose firm works with more than 90 dealerships, including several Asbury Automotive Group stores. "Then we develop a Web site that backs up a sale."
Scarry says his agency worked with Delray Acura and Delray Hyundai, both in Delray Beach, Fla., to generate more sales leads through Internet search engines by changing the text on the dealerships' Web sites.
Reflecting the rapid growth of dealer spending on Internet advertising, Scarry says his agency will open an Internet division this year.