For years, the pitch from a newspaper’s sales team to its local auto dealers was simple: pay us a price and we’ll give you the ad space. Whether or not the advertisements displayed in a newspaper actually translated to cars being sold off the lot mattered very little. After all, the dealers didn’t necessarily have much choice.
Fast forward to 2016, and the landscape of the automotive advertising industry, like every other advertising category, poses a laundry list of challenges for newspapers. What was once a powerful partnership between publishers and auto dealers has since been strained as consumers face a flood of different car shopping options online.
However damaged the relationship may be, the steps toward regaining automotive advertising revenues back isn’t an insurmountable task. In fact, the healing process for many newspapers and their local auto dealers has already begun.
Providing a Solution, Not a Product
Publishers can have some sense of comfort with the fact that the automotive sector is the largest local controllable category for newspapers. Additionally, a recent study by effectiveness consultancy firm Benchmarketing for Newsworks revealed that advertisers are making the wrong decision by cutting back on their print spending in newspapers. The study, which covered more than 500 econometric models for evidence, noted that advertising with newspapers increases overall ROI by three times. Print automotive campaigns, in particular, were noted as being nearly twice as effective as any other type of advertising.
The bad news is quite clear—it’s simply far more important for newspapers to attempt improving the relationship than it is to car dealers right now. Arguably the largest challenge a newspaper has is articulating an intelligent proposition for a car dealer to give them money. From a dealer’s perspective, what’s necessarily in it for them?
In today’s market, it can be a challenge within itself for a sales rep to actually get a face-to-face meeting with someone at the dealer. This was a problem the sales team at the Bangor Daily News in Maine was confronted with on a habitual basis. When a sit-down meeting was finally obtained with one dealer, the sales staff prepared a presentation that revolved not around product and price, but a pitch centralized around offering solutions.
The dealer in question had been running only print ads with a declining spend for the past year. In order to address that issue, they proposed specific goals of increasing four categories for the dealer: qualified leads, traffic to the website, foot traffic to the dealership and the number of service customers. The team not only highlighted which leads auto repair customers were using to start online searches but also recommended geo-fencing around the dealer’s competitors in the area with mobile to compliment digital ads on the Daily News website.
Ultimately, the dealership agreed to the digital proposal as well as a twice-a-week print ad schedule for the following year worth $187,200. In the past year, the paper alone has delivered nearly 9,000 clicks to the dealer’s website.
“After six months, we reviewed the performance of the campaign and added video pre-roll and an ongoing contest,” said Martha Ward, business development manager at the Daily News. “The contest is providing measurable results with an average of 30 qualified email opt-in leads each week, plus market intelligence about potential customers.”
The ability to provide the insight necessary for such a convincing proposal was made possible through SalesFuel’s AdMall sales intelligence platform, which is used by more than 2,000 media companies across the country. By using the platform, newspapers can obtain highly detailed data on its auto dealers by make and market.
“The technology can actually tell you what the top models are in the dealer’s market, what they should be advertising and when the peak sales seasons will come,” said SalesFuel president and CEO C. Lee Smith. “It gets the auto dealers to think differently about the newspapers, especially with the younger generation now running some of these dealerships.”
Smith, who worked as a sales rep for Ohio’s Columbus Dispatch early in his career, emphasized the need for a newspaper to deliver insights to an auto dealer that they previously didn’t have. Simply possessing an adequate knowledge of the industry won’t cut it either.
“Auto dealers are notorious for thinking they know everything but if you can somehow surprise them with information on your audience and be able to apply it to a promotional campaign, then you have a much better chance of getting business,” Smith said. “Sell the quality of your audience, not the quantity.”
Getting on Board
Although more newspapers appear to be recognizing the significance of this relatively simple, but critical concept of pushing solutions over product and price, there still remains an enormous amount of pressure on dealers to stop doing business with their former go-to advertising partners.
Gannett has been following this methodology with ShareLift, a sales and marketing consultancy focused specifically on automotive, and the results have created “financial stability the last few years,” says co-founder Bill Bradley. The firm now also works with tronc, Lee and several McClatchy markets as well.
“I’d say that their success really hinges on a few variables: leadership that drives this process, dedicated automotive staff and a level of awareness that the behaviors of the past are what’s causing us to lose access to key decision makers,” Bradley said. “We try to teach newspapers to quit running and start defending their turf because they have really valuable assets.”
Uncovering just what those assets are for a newspaper is where ShareLift enters the equation. By taking a newspaper’s circulation database and appending it against vehicle registration data, dealers can understand exactly who—instead of solely how many—they are advertising to.
“What we’re able to do then is, for example, say ‘Our subscribers bought this amount of Chevrolets last year and here is the model they prefer,’” Bradley said. “Dealers really lean in when this data is being presented.”
A newspaper’s single valuable asset is unquestionably its subscribers, who buy cars and lots of them. According to Bradley, Los Angeles Times subscribers bought $3 billion worth of cars last year.
“They operate at a higher velocity level than the general market does. It’s often two times what the general market purchases,” Bradley said. “I can tell you from having done over a 100 data appends at newspapers across the country, that when it comes to automotive, subscribers always over-index in luxury, crossovers and certain brands like Lexus.”
Kelly Mirt, vice president of advertising for the Charlotte Observer in North Carolina, said the paper’s position in the automotive advertising market improved significantly when tangible, useful data was introduced into the conversation.
“Sharelift provides us the tools to be a trusted advisor with our automotive clients. Not only does the data help position our solutions with the dealers success but the dialogue with dealerships has been elevated as well,” Mirt said. “We went from digital conversations with an internet manager to strategy sessions with the general manager. Those sessions resulted in increased revenue in both digital and print.”
Attributing the Value
While offering strategies for dealerships is vital, ensuring your newspaper receives proper credit for advertisements or leads that translate to sales is just as important. With so many different venues for leads to come from, dealers often struggle to determine the origins of the ad dollar that generated activity. Clearing the air of ambiguity surrounding the actual value of a newspaper ad, regardless of the platform, produces a confident dealer and a newspaper with more leverage at the bargaining table.
Exponent Media Group, which provides technology and consulting services to newspapers, focuses on eliminating any possibility of doubt on either end of the spectrum. The company publishes the auto section for its clients’ newspapers using a cloud pagination system connected to a dealer’s entire inventory. This allows a newspaper’s sales team to then go in and choose the cars that run in print based on the needs of that dealership.
“For example, we can tell a dealer that we ran 10 cars with 10 unique stock numbers, and of those stock numbers, two of them sold. What makes it unique is that we have a very small sample of the dealer’s inventory that actually run in the paper each time” said Exponent Media Group president and CEO Chris Maikisch. “The dealer can check their sales system and see if there are leads from any other media source for those specific 10 cars so there’s no ambiguity with what led to the cars being sold.”
When value attribution is packaged in a timely manner, the numbers quite literally speak for themselves. Maikisch said the company administers a weekly report for each of their client’s dealers which states quite clearly whether or not the advertising is translating to auto sales. The most pressing number for the dealer is the amount it got back for every dollar it gave the newspaper that week.
“It doesn’t matter if they like or dislike newspapers,” Maikisch said. “It really makes for a compelling sale because you’re coming in with some incredibly specific information and you can let the dealer know how the newspaper benefits your dealership down to a car stock number level.”
For the Impact, a free weekly newspaper published in the Pine Belt of Mississippi by Buckley Newspapers, the appropriate solution came in the form of its own automotive website. Launched earlier this year, Cars601.com was designed using the AutoConX platform.
“As times have changed, auto dealers wanted more measurable results that we simply weren’t able to give them. Using the AutoConX platform to launch a local auto vertical gave us all the tools to provide them exactly what they were asking for,” said Buckley Newspapers CEO Zach Buckley. “Our website helped us increase our auto dealer advertising in print by 50 percent and our monthly automotive revenue by over $10,000.”
Among the tools, the AutoConX platform offers to include the Text-to-Save and Auto Showcase programs, both of which aim to generate tangible leads for dealers through a unique SMS code paired with every vehicle advertised. The company also has super-charged its inventory system with coupons now as well, allowing dealers to create thousands of dollars of coupons for new and used vehicles on their lot.
“Consumers are still looking at the print product and they’re generating leads for those dealers that advertise. As soon as a reader texts that unique code in the ad to the designated number, the dealer is automatically sent an email informing them there is interest in a specific vehicle,” said AutoConX vice president of sales
. “It ties the whole system together and proves the value of the print to the dealership as well.”
The Role of the Sales Team
Of course, the core component of any healthy partnership with local auto dealers remains a newspaper’s sales team. Though the technological and data-driven insight companies like SalesFuel, ShareLift, AutoConX and Exponent Media Group can be invaluable for newspapers, an insufficient sales staff can, to an extent, prevent a publication from even getting off the ground in the automotive category.
“We’ve walked away from a handful of newspaper companies that didn’t have a couple of key traits established and had to go get certain things done before they re-engaged us. One of them is structure,” said Bradley. “Having people who are dedicated to the category is so important because it’s so specialized. It’s not a hobby and you can’t get depth of knowledge by handling multiple categories at the same time.”
He added: “If you’re a rep and you’re calling a car dealer one second, and a nail salon immediately after, then it’s really hard to gain traction.”
Although the ratio of sales reps to the dealerships it represents can vary on a case by case basis, Bradley said it remains essential not to overwhelm any single member of the team with responsibilities.
“Typically, you don’t want to have over 25 franchised dealers at the rep level. Once you get to 50 on the independent dealer side, you should be thinking about taking on another rep,” Bradley explained. “Those are just structural practices, but they really come into play when you are trying to ramp up a sales team on a business segment and you just can’t get them there because it’s not the only business sector they are focused on.”
Getting the Word Out
Ultimately, shattering the misconception that newspapers no longer have value in the automotive sector may not be easy, but the framework has quietly been laid out in pockets throughout the country.
“I can honestly tell you that we’ve found across the board, from one market to the next, that newspapers were some of the best activity generators out there. However, since they didn’t have this specific data telling them how they were delivering value, this idea that newspapers were terrible to advertise in continued to propagate,” Maikisch said. “Newspaper publishers are very smart people, and they don’t have their head in the sand because they are stubborn or don’t want to change. It’s just a matter of getting the word out that there are options.”
Thing to Consider
Don’t Become a Disposable Resource
“Without offering specific solutions for a dealer, you’ll be vulnerable to get undercut. From a dealership’s point of view, if I’m doing all the work as a dealer, you’re just a delivery mechanism for me,” said ShareLift co-founder Bill Bradley. “Your newspaper will become like direct mail—something highly commoditized.”
Make an Economic Impact on Your Community
The Omaha World-Herald has been using Exponent Media Group’s cloud pagination system and detailed data insights to much success, averaging roughly $20 in gross profit for their dealers in exchange for every dollar spent in the paper.
“What’s also unique is that it appears they are generating about $10 million in gross profit for their local dealers,” said Exponent Media Group president Chris Maikisch. “We’re talking about a considerable economic impact on the local community.”
Take Advantage of Anonymous Car Shoppers
“There is a significant amount of consumers who don’t want to talk to dealers. They go window shopping after hours, or on Sundays when they aren’t going to be bothered and can just browse the lot,” said AutoConX CEO Rob Hage.
The AutoConX platform allows for a unique SMS code to be included with both the vehicle display ad in print and now self-printable car tags on that particular vehicle in the dealership’s lot. The concept provides a convenient solution for shoppers who wish to remain somewhat anonymous as long as possible.
Utilize Online Video Ads
“My advice to newspapers and the automotive sales staff is to have a primary focus on online video. That’s going to be the way to get some of the revenue back because we know that automotive dealers like their video—whether it be a 30-second spot or a 15-second pre-roll,” said SalesFuel president and CEO C. Lee Smith. “If you combine native advertising with online video, then you’ve really got something that could be effective for dealers.”