The Internets Impact on Print Advertising Session

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The Internets Impact on Print Advertising
Session

• The New
• Automotive Marketing Paradigm
• Newspaper Association of America
• National Automotive Account Managers Conference,
  NAIAS- January 9, 2002

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Presented By

• Sheila L. Sasser, Ph.D. App.
• Lecturer, Marketing
• www.sasscomm.com s.sasser_at_sasscomm.com
• Dr. Edward A. Riordan
• Professor, Marketing
• e.riordan_at_wayne.edu
• Wayne State University
• Detroit, MI, USA

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Detroit, Michigan sheila.sasser_at_wayne.edu
e.riordan_at_wayne.edu
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Outline Road Map

• Trends
• Advertising
• Automotive
• Website/Internet
• Research
• Behavioral
• Ideas Future Opportunities
• Summary

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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

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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

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National Newspaper Advertising source Ad Age
9.24.01
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National Internet Advertising source Ad Age
9.24.01
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Spending Trends - Signals???

• Note the mixed trend directions for OEMssome are
  way up and some are way down.
• How do we interpret these changes?

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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

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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...

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Dealer Ad
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Automotive Advertising Trends

• We expect the OEMs to continue incentive programs
  to keep the plants running and to continue sales
  pull aheads (ie. GMs 2002).
• We expect the OEMs to continue to re-evaluate
  dealer advertising (ie. GMs 500m holdback) and
  impose stricter format standards on their dealers
  for both print and broadcast.

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Dealer Ad
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Automotive Trends

• On average, the automotive Internet user visits
  6.8 automotive sites before making a
  purchasepreferring 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

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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

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Dealer Ad
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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 - OE examples
• Drive dealer classified ads to NP websites
• Conversion integration are critical to mitigate
  loss - cannibalize or be cannibalized...

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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

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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

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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

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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

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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

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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

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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

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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?

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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!

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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

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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

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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

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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

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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
  fundsresponse cues...tracking

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Dealer Ad
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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
  1the 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

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Ideas Future Opportunities

• The Automotive Category represents 16.4 of all
  US ad spending (CMR data, 2000, Ad Age)
• In times of economic uncertaintythere is even
  more challenge, as dealers try to sustain growth
  fueled by 0 financing and rebate incentives

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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

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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

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THANK YOU!!!