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The Internet’s Impact on Print Advertising Session. The New Automotive Marketing Paradigm Newspaper Association of America National Automotive Account Managers’ Conference, NAIAS- January 9, 2002. Presented By. Sheila L. Sasser, Ph.D. App. Lecturer, Marketing

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The internet s impact on print advertising session

The Internet’s Impact on Print Advertising Session

The New

Automotive Marketing Paradigm

Newspaper Association of America

National Automotive Account Managers’ Conference, NAIAS- January 9, 2002


Presented by

Presented By

  • Sheila L. Sasser, Ph.D. App.

  • Lecturer, Marketing

  • www.sasscomm.com [email protected]

  • Dr. Edward A. Riordan

  • Professor, Marketing

  • [email protected]

  • Wayne State University

  • Detroit, MI, USA


Naa

Detroit, Michigan

[email protected]

[email protected]


Outline road map

Outline “Road Map”

  • Trends

    • Advertising

    • Automotive

  • Website/Internet

    • Research

    • Behavioral

  • Ideas & Future Opportunities

  • Summary


Trends

Trends

  • IAB reports Q1 & Q2 Internet Ad Revenue of $2.76 billion in US…

  • J.D. Power shows continued growth in Automotive Internet usage in 2001

  • ...43% of all used vehicle buyers use the Internet as part of the vehicle shopping process, a 27% increase over 2000

  • R2: Vary by gender & type of channel

  • R3: Vary by ethnic nationality & type of channel

  • R4: Vary by customer geographic residential location


Industry ad trends

Industry Ad Trends

  • Automotive sales represent a major proportion of all retail sales

    • Even Pre Owned Segment comprises 12.5% of all retail sales equal to ($370 billion)

  • Auto advertising represents 16.4% of all nationally measured advertising

  • Newspapers = #2 medium: $18.9 billion in ‘00


National newspaper advertising source ad age 9 24 01

National Newspaper Advertisingsource: Ad Age 9.24.01


National internet advertising source ad age 9 24 01

National Internet Advertisingsource: Ad Age 9.24.01


Spending trends signals

Spending Trends - Signals???

  • Note the mixed trend directions for OEMs…some are way up and some are way down….

  • How do we interpret these changes?


Automotive advertising trends

Automotive Advertising Trends

  • Long term planning difficult (due to 9/11 and 0% incentive wars)

  • Ad Spending should slow in ‘02?

  • However last period reported 1999-2000 up 6.3% ==> $14.6 billion to $15.5 billion


Automotive advertising trends1

Automotive Advertising Trends

  • 0% Financing/incentive war has pulled ahead approximately 500,000 unit sales from 2002 (400,000-700,000 range)

  • “GARAGE LOADING!”

  • 215 million units of vehicles

  • The automotive industry equivalent of retail “PANTRY LOADING” has now hit the automotive sector proliferating multiple vehicle households and aberrations of demand curves & forecasts...


Dealer ad

Dealer Ad


Automotive advertising trends2

Automotive Advertising Trends

  • We expect the OEMs to continue incentive programs to keep the plants running and to continue sales “pull aheads” (ie. GM’s $2002).

  • We expect the OEMs to continue to re-evaluate dealer advertising (ie. GM’s $500m holdback) and impose stricter format standards on their dealers for both print and broadcast.


Dealer ad1

Dealer Ad


Automotive trends

Automotive Trends

  • On average, the automotive Internet user visits 6.8 automotive sites before making a purchase…preferring 3rd Party Sites

  • 6% of vehicles were sold online, up from 4.7 % in 2000, small but significant….

  • Kelley Blue Book, kbb.com remains the most visited site for the 4th straight year


Automotive trends1

Automotive Trends

  • 50/50 Split between Car/Truck for 2001….

  • Truck sales for 2001 were approximately 49% of the market, with light duty trucks rivaling passenger cars (Autopacific):

  • SUVs = 44.4%

  • Minivans = 16.9%

  • Pickups = 35.8%

  • Caruck & Tall Station Wagon hybrids...

  • This will affect nature of advertising segmentation different buyers “millennials”


Dealer ad2

Dealer Ad


Web trends

Web Trends

  • More dealers are creating full service websites like OEMs

  • NP ads must contain web addresses & more interactive elements

  • Everyone wants to get buyers to website

  • Dealer NP ads can be shown on NP websites along with promos, offers, etc.

    • DFP - DN - O&E examples

    • Drive dealer classified ads to NP websites

    • Conversion & integration are critical to mitigate loss - cannibalize or be cannibalized...


Web trends1

Web Trends

  • OEM Website Examples

  • Instead of viewing the Internet as a competitor to NP advertising, both should work together to complement message

  • Sell the NP-Web mix to dealers

  • Traditional retailers have been integrating print, direct, web & broadcast interchangeably

  • Broadcasters have also integrated the Web

  • Several stations showcase Web & NP


Web trends2

Web Trends

  • Toyota Interactive Matrix Video Promotion

  • Mazda Zoom-Zoom Interactive IMC

  • DCX PT Cruiser CRM Launch

  • Ford Focus Youth Tour

  • GM Buick Rendezvous with Tiger Woods

  • All of these unique programs were very successful in effectively generating new targeted prospective customers


Our web research findings

Our Web Research Findings

  • The best website factors:

  • High Utility:

    • easy to navigate & read

    • consistent page formatting

    • understandable icons, menus

  • Pleasing Aesthetics

    • sharp images, color, quality graphics

  • Entertainment & Engagement

    • ability to grab and hold attention

    • high entertainment value


Our web research findings1

Our Web Research Findings

  • Does this list sound like rules for good newspaper advertising???

  • The worst websites “bombed” on all these features especially those that trapped the user in a closed loop!

  • Time is a critical factor


Web behavioral findings

Web Behavioral Findings

  • Advertisers & Automotive Dealers still trust print more than the web, but are slowly migrating and testing new ways to integrate both formats…

  • Overall Web Benefits perceived are:

  • Greater control of content on the web,

  • Flexibility to change offers

  • Immediacy of knowledge gathering

  • Instantaneous potential communication

  • Customer segmentation opportunities


Web behavioral findings1

Web Behavioral Findings

  • Disadvantages:

  • Distrust of nationally sponsored sites

  • Loss of direct dealer customer control

  • Lack of knowledge of database CRM

  • Potential technology glitches

  • Customer wariness of long term viability

  • Varying levels of consumer confidence

  • Measurability & tracking issues


Web behavioral findings2

Web Behavioral Findings

  • Most Business Advertisers are hesitant to pull print advertising and risk web only

  • Print still has proven tangible attributes

  • Sense of security with existing system

  • As national websites and customers become more sophisticated, change will occur…

  • Transitioning from print to Internet will depend upon ad industry innovation, advertisers, users & consumers


Gender findings analysis

Gender Findings Analysis

  • Men rated online sites highest in trust & security

  • Women trusted catalog sites more than online

  • Women also trusted retailers more than the web

  • Why?


Gender findings analysis1

Gender Findings Analysis

  • Evolutionary Life Cycle of the Web?

  • Familiarity, Usage, Routine Shopping Behavior?

  • Access Barriers & Convenience Issues

  • Male => Transactional Task Orientation

  • Female => Interpersonal Orientation

  • Both read Newspapers & Buy Lots of Stuff!


Ideas future opportunities

Ideas & Future Opportunities

  • Smart dealers have used the Internet to reach highly profitable specialty segments of customers

  • Pre Owned, customs, collectibles, performance...

  • Newspapers can target gender, age & lifestyle specific ad message appeals combined with web, like cable TV strategy

  • Tracking of promotions, customers & CRM

  • Still use print in IMC for mass market image


Ideas future opportunities1

Ideas & Future Opportunities

  • Automaker Research may also benefit dealers, newspapers & CRM

  • -Customer centric user design findings

  • -Internet focus group testing breakthroughs

  • Elite status of key dealers prompting more sophistication & evolution…

  • 5 Star - Blue Oval - GM

  • Balancing act of budgets & performance


Ideas future opportunities2

Ideas & Future Opportunities

  • Programs that will affect the future of advertising in Newspapers

  • Used/Pre Owned Cars

  • Certified pre-owned programs growing rapidly:

    • Both OEMS & Dealers will need to advertise the specifics and benefits of these programs

    • Incremental budget opportunities

    • Large volumes of vehicles to move from expired lease programs, fleet & other


Ideas future opportunities3

Ideas & Future Opportunities

  • The US pre owned car market is 3 times larger than the new car market...

  • It is also much more profitable for dealers thus greater ad dollars...

    • ($500/unit used vs $100/unit new)

  • Dealers will need to advertise more to help increase their profits and move vehicles

  • Greater control of ad funds in this area


Ideas future opportunities4

Ideas & Future Opportunities

  • New Cars

  • OEM dealer co-op and Dealer Group Advertising will have more structured standardized modules...Multi-Brand Dealer Ads will be used for increased visibility & efficiency

  • Themed messages, headlines, events (Home)

  • White space, white space, white space

  • New ways to measure effectiveness & allocate funds…response cues...tracking


Dealer ad3

Dealer Ad


Ideas future opportunities5

Ideas & Future Opportunities

  • “Two years ago the number of people who located their vehicle through a published classified ad outnumbered Internet classified by more than 7 to 1…the gap narrowed to only 2 to 1 this year and it is likely that Internet classifieds will surpass the traditional published classifieds within the next few years.” …Chris Denove, JDP


Ideas future opportunities6

Ideas & Future Opportunities

  • The Automotive Category represents 16.4% of all US ad spending (CMR data, 2000, Ad Age)

  • In times of economic uncertainty…there is even more challenge, as dealers try to sustain growth fueled by 0% financing and rebate incentives…


Summary

Summary

  • Pay closer attention to specific segments of buyers & their needs

  • Leverage the gender differences existing on Internet in favor of Newspaper Adv

  • Recognize sophistication levels in users

  • Promote comfort and security as key

  • Print can provide stability to web

  • Drive synergy with IMC & CRM


Summary1

Summary

  • Proactive Interactive Program Modules

  • Work more closely with Advertisers to track results of integrated print/web ads

  • Create multibrand & themed modules

  • Set up third party endorsement sites

  • Inform, Engage and Entertain customers

  • Leverage print equity & reader base

  • More promotion, database & research


Thank you

THANK YOU!!!


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