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While participating in a meeting during NADA 2015 in San Francisco, I challenged Brian Pasch’s assertion that car dealers should not invest too much time or energy on Pay-per-Click Search Engine Advertising strategy or tactics… Almost a year and a half later, I believe Brian has come to understand why I still work so diligently at educating dealers about Google Adwords as a strategic digital marketing tool.

Recently Brian published an article on LinkedIn which references Ford Motor Company’s latest initiative to compel their dealers to spend more of their advertising budget on PPC Search Advertising.  This article is compelling because it showcases a major OEM doing whatever they can to drive their Dealer Network’s competitive positioning in Search Results Page rankings via the use of Google Adwords.

Although I agree that dealers need more and better educational resources for their digital marketing proficiency, I do not believe it is a 100% educational issue, nor will the problem be resolved by learning alone. Car Dealers have an almost inexplicable affinity for the off-line advertising media that has served them so well over the years… In the past. This will only be overcome when those of us in the automotive digital marketing world learn to communicate, present and close deals as well as the old school media sales professionals.

Here is the bulk of Brian Pasch’s article:

Education Is a Cause of Low Impression Share

Founder of PCG Companies, Author, Keynote Speaker

Education Is a Cause of Low Impression Share

Recently, Ford sent out a memo to their franchise dealers outlining their new co-op policy regarding funds associated with digital media investments. The new policy will require Ford Dealers to use 50% of the digital media funds for paid search, starting July 1st, until dealership impression share increases.

The reason for this change in policy, according to Ford, it the abysmally low AdWords impression share that Ford dealers have when consumers conduct a search in their local market for Ford related terms or general shopping terms.

The dealers must increase their paid search spend until they hit a target impression share, which would make the brand more competitive in search results.

While I understand the reason for this policy change, and how it will help to support the national advertising campaigns that Ford runs, it does not fix the underlying problem.

Why are Ford dealers not seeing the need to invest in search engine marketing?

According to Ford’s memo,  their dealer network is being outgunned by competitors by nearly a 3:1 ratio in paid search. Other dealer networks are investing in paid search, protecting their brand related terms, resulting in a much higher impression share.

So what is really the root cause of this competitive disadvantage? An issue is the current state of franchise dealership education. It is not a problem unique to the Ford dealer network. While some Ford dealers may not understand that they must advertise online, why is the Ford network they so far behind their peers?

While policies that require spending in specific strategies (SEM) makes sense in the short term, to protect market share, the bigger problem at hand is the failure of dealership education and certification regarding online marketing.

Franchise dealers hate being told how they have to advertise their dealership.

So, I’ll raise my hand to offer assistance to the Ford dealer network regarding strategies to help Ford dealers understand the “why” behind digital advertising and online marketing. PCG has developed a comprehensive catalog of online workshops designed to educate dealers on automotive digital marketing and sales process.

Once Ford dealers understand the “why” behind this policy change, they will adjust their spending patterns naturally. Forcing franchise to spend their advertising dollars in certain areas, without establishing a clear financial benefit first, will create friction between Ford and their dealer network.

Right now, affirmative action is needed. I support that decision, however, what about social media advertising? Video pre-roll advertising? Will the beatings continue without education?

Do you agree? Share your thoughts below.

2016 Digital Marketing Strategies Conference

I invite all dealership leaders to join me at the 6th Annual Digital Marketing Strategies Conference (DMSC), May 22-24th in the Napa Valley. This conference is designed for dealership owners and managers who want to gain a competitive edge with their online marketing strategy. 18 tickets remain; act quickly.

Conference details: http://digitalmarketingstrategies.org/

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Ralph Paglia

Automotive Marketing Pro with a Passionate Commitment to Clients

Ralph Paglia currently serves as President of ADM Consulting, LLC based out of Las Vegas, Nevada. Prior to his launch of the ADM Consulting Practice in May 2014, Ralph drove the concept, business strategy and creation of Automotive Media Partners, LLC… From January 2011 and up to to the corporate formation and official launch of AMP in April 2012, Ralph served as Vice President – Digital for Tier 10 Marketing with offices in Washington, DC and Miami, FL.  During his time at Tier 10, Ralph recruited, hired, trained and led the Digital Marketing and Advertising Team. Ralph created Tier 10’s Digital Advertising Operations, and defined those operating procedures in a Documented Manuals. Ralph designed the team’s work-flow processes and digital advertising operational steps that executed campaign fulfillment for Tier 10 Marketing dealer and dealer association clients.

From early 2007 through the end of 2010, Paglia was responsible for ADP Digital Marketing Business Development. He established key strategic partnerships with Car Companies (Ford, Toyota, Mercedes-Benz, Honda, Hyundai,Kia), Social and Digital Media Enterprises, major universities (ASU), car dealers, large dealer groups and digital marketing enterprises such as Google, Yelp, Yahoo!, DoubleClick, Specific Media, Jumpstart Automotive Media, KnowEm, Ning, TubeMogul, Network Solutions, DealerRater, Facebook, Presto Reviews, J. D. Power and Associates, Digital Dealer Conference, Cars.com, CBS, Ford, Kia, Honda, Toyota, General Motors, Hyundai and others.

At both ADP Dealer Services (now CDK Global) and Tier 10 Marketing, Paglia created significant revenue growth from new solutions to accelerate vehicle, parts and service sales using digital marketing, site visitor retargeting and behaviorally targeted online display advertising, search engine advertising, social media marketing and reputation management strategies and tactics.

Prior to Tier 10, Paglia created new businesses for ADP Dealer Services (now CDK Global) such as Digital Marketing and Advertising, OEM Digital Marketing Consulting, and Social Media Reputation Management.

EDUCATION: After earning his Bachelor of Science Degree in Business Administration from Valparaiso University, Paglia attended SUNY-Buffalo School of Business for his Masters in Business Administration (MBA), specializing in Marketing. His first job after graduate school was with De La Fuente Automotive, Inc. in San Diego where he served in multiple roles over an 8 year period including sales manager, general sales manager and general manager. .

AUTOMOTIVE: Since his San Diego dealership days, Paglia has served in management capacity for dealer groups in California, Texas and New York. Ralph has become a nationally recognized thought leader, conference speaker, consultant and frequently published author on automotive CRM systems, Digital Marketing and Advertising Strategy, organizational development and Internet Sales Team Operations and Management.

GODFATHER OF DIGITAL MARKETING: Paglia has been tagged as the “Godfather of Automotive Digital Marketing” by several industry veterans as a result of his remarkable history and pioneering thought leadership. His experience at large scale implementation of auto industry Internet Sales Departments, Business Development Centers (BDC) and Customer Relationship Management (CRM) tactical operations is unmatched. Paglia is a well known speaker and frequently published expert on Automotive Digital Marketing and Advertising, automotive solution development requirements, CRM systems, dealer business process and operations, Digital Marketing value propositions along with measurement criteria, platform data points and collections systems for performance reporting and ROI analysis.

HIGHLIGHTS

1986 San Diego: Paglia pioneers “Internet Leads” using Bulletin Board Systems at defense contractor facilities

ADP Dealer Services Announces Financing Program with GE Capital as CDK Global

Previously, ADP Dealer Services utilized ADP’s Credit Services for all financing. Now, GE Capital will offer their financial stability and strong reputation to CDK’s dealers. Since 2007, GE Capital’s Equipment Finance business has completed $36 billion in lease and loan transactions. Its network includes more than 200,000 customers in over 10 industries.

Don’t Let Your Video Become a Flash In the Pan – Automotive Digital Marketing

Brian Cox

Brian Cox

Don’t Let Your Video Become a Flash In the Pan

 

There’s no doubt that video marketing, in general, has become increasingly important in today’s world. Google has the search market cornered which is why, as marketers, it is important to pay close attention to the changes they make. However, did you know it’s even more important to pay attention to the second largest search engine in the world? You might think that I’m referring to Bing but, in fact, the second largest search engine is YouTube. Thus the importance of video for SEO.

Dealerships have increasingly embraced video in various degrees for years – from simple stitched videos to professionally created live walk-arounds. There’s no doubt that consumers love video. In fact Google’s recent automotive study indicates that over 80 percent of car shoppers will watch a vehicle video and then take immediate action.

The challenges that face car dealerships when it comes to creating videos are the same as they have always been – time and money. There are many solutions that exist for car dealerships in video marketing. I’m fairly certain that you would agree that ANY video is better than no video. And you may even believe that all video is equal. Well, with this blog, I hope to help dispel those erroneous thoughts.

Let’s start with the fact that live video is the most effective (which it is). I don’t think any dealer would deny that, in a perfect world, they would have video walk-arounds for every one of their vehicles. The infrastructure and format of your video is just as, if not more important than the quality of it. Some providers use flash-based video which allows them to offer video services to their dealer clients at a lower price point… and, on the surface, there is no visible difference between a flash video and a real video. In reality, however, there are huge differences.

Flash videos are self-contained videos that require a player (like Adobe Flash Player) or a compatible web browser with a plugin. It wasn’t too long ago that flash video was the de facto standard. Technology, however, has changed. Consumers are increasingly accessing the Internet and websites using mobile devices. Guess what’s not compatible with those? You got it, flash video. In fact, in mid-July of this year, Google itself announced that it would start issuing warnings to people attempting to access websites containing flash with the statement “Uses flash. May not work on your device.” Chances are really good that a consumer coming across a website or video that receives this message will probably not continue, but rather seek their answers elsewhere.

Your website will certainly not benefit from video if your audience is not viewing it. In fact, flash video isn’t supported by any Apple device, nor Android versions 4.1 or higher, according to Google. These devices account for a HUGE share of the mobile market. Flash video is also not compatible with some third party inventory sites, and it also has problems with syndication to social networks and other touch points that consumers are on.

Real video, on the other hand, offers a few very important distinctions as web developers gravitate towards such things as HTML5 with mobile capabilities and syndication. According to the Interactive Advertising Bureau, “Nearly half of the U.S. population has a mobile phone with Internet access, and one out of five page views on the web happen on a mobile device – a number that is growing every month.” Needless to say, if you are using flash, you are already costing yourself 20 percent of potential traffic.

As a dealer, how do you know what kind of video you have? The answer is if your videos are syndicated across the web, viewable on a mobile device or tablet and the search engines can see them, you are doing the right thing and have real video. If not, you most likely have flash.

One of the largest advantages to real video is semantic search.
Search engines don’t have the capability of indexing flash video. Real video, properly tagged and built using a semantic structure, can be indexed. Not only can they be crawled by search engines, but the search engines will read each video as an individual web page. This increases your page rankings.  Last, but certainly not least, real video has the ability to be syndicated everywhere. All of those touch points that consumers use when vehicle shopping can display your video and increase the reach and impact of your video marketing. Of course more exposure brings more traffic viewing your inventory. And the more traffic your inventory receives, the more leads, conversions and sales you’ll see.

The bottom line is that flash video is a bad solution for video marketers. Flash video may be cheaper than real video, but what are you losing in the end? Just because it’s a shiny object and looks pretty, doesn’t mean that you should be using it. Real video offers businesses the ability to have a bigger footprint with their video marketing. It increases the effective of any marketing and the likelihood that a consumer will want to AND have the ability to watch it. This is the whole exposure aspect of real video plus real syndication. It equals more traffic, which equals more leads. The few dollars you may save by going the flash video route will pale in comparison to the profit you’ll lose from customers who never see your video or visit your dealership.

Cut the SPAM and Serve Up More Content – Automotive Digital Marketing

Cut the SPAM and Serve Up More Content

What do consumers want from mobile marketers?

According to a new study by Hipcricket, it’s obvious that prospective customers want a lot less spam and a lot more ham.

The Hipcricket study, examining consumer attitudes and perceptions about mobile marketing, indicated that 66 percent of consumers say they have received a text message or mobile alert from a brand. However, consumers complain that the majority of brands miss their target with messages people find not useful, irrelevant, or insufficiently personalized.

How do marketers miss the mark? Here are some consumer responses from the survey:

  • 52 percent said the message felt “intrusive or spammy.”
  • 46 percent said the message wasn’t relevant to their interests.
  • 33 percent said the message didn’t offer any value.
  • 41 percent said they would share more information with brands if offered relevant offers or coupons

Doug Stovall, chief operating office at Hipcricket, concludes that the research indicates “consumers are actively engaging brands via mobile marketing, but brands must deliver relevant and personalized campaigns.”

Forty one percent of survey participants indicated they would share more information with companies via mobile in exchange for relevant coupons or offers. Location data (20 percent) and demographic data (19 percent) were the most common forms of data people were willing to share.

“This data, properly analyzed, can unlock a treasure trove of information that drives more personalized, relevant mobile marketing,” said Stovall

Bottom line: consumers are willing to view marketer appeals. But they want more ham (offers, incentives, relevance) and less spam (random, incentive-less ads).

To learn more, check out the infographic below.

mobile 2

mobile 3

 

Banks Report: Lithia Acquires DCH Car Dealership Group

The Banks Report: Lithia Motors Acquires DCH
by Cliff Banks

The Banks Report has learned that Lithia Motors has entered into an agreement to acquire the DCH Automotive Group and is waiting for manufacturer approval.(Update — Lithia subsequently sent a press release saying the deal has been completed).

Lithia executives are scheduled to be in New Jersey Monday meeting with DCH executives. The deal is expected to close in the fourth quarter of this year.

Lithia will pay $340 million in cash and $22.5 million in stock for DCH. This likely will be the biggest dealership acquisition in the U.S. since January 2002 when the Sonic Automotive Group acquired the 16-dealership Massey Automotive for close to $200 million.

This acquisition will bring the industry total for 2014 to 121 buy-sells. This is the second monster deal to be done in the last couple of weeks — the David Wilson Automotive Group acquired Fletcher Jones’ Las Vegas Toyota store for $75 million at the beginning of June.

DCH has 25 dealerships (DCH’s website says 27 stores, but TBR combines Toyota with Scion for its records) selling 32 brands in California, New Jersey and New York. It’s one of the top 10 dealer groups in the country when ranked by new car sales, and generates an estimated $1.8 billion to $2 billion a year in revenue.

Chairman Shau-wai Lam’s father, B.Y. Lam, began what would become DCH Automotive as a trading company in Shanghai in the 1930’s. A few years later, he established Dah Chong Hong Limited in Hong Kong. He opened an American subsidiary, DCH (USA), in New York in 1948 focusing on importing food and textiles and trading in commodities.

The USA division of DCH moved out of the import and trading business in 1977 to focus on selling cars. Unable to obtain a dealership selling one of the domestic brands, DCH was given an open point by Honda in Paramus NJ, the company’s first dealership.

In 1979, Lam, who at the time was DCH’s youngest executive, was sent to California to open DCH’s second store, Gardena Honda. Within four years, it became the top selling Honda store in the country. Lam was named president in 1988.

Following the parent company’s sale in 1992, Lam’s family and the Wing On Group of Hong Kong acquired DCH acquired DCH.

DCH President George Liang will continue running the company reporting to Bryan DeBoer while Lam will be on Lithia’s board.

In 1996, led by Sid DeBoer, Lithia Motors became the first dealer group to go public with five stores selling 19 different brands.

Not including the DCH acquisition, Lithia has acquired eight dealerships this year – including four in Hawaii – and nine stores in 2013 bringing its total to 101 dealerships operating in 12 states. It’s now the eighth largest group in the country having generated more than $4 billion in total revenue in 2013.

DeBoer’s son, Bryan, took over as president and CEO of Lithia in 2012.

He’s transformed the group from being a centralized corporate-run firm to being a group of decentralized entrepenurial stores. The company has had a great run since 2012. Company shares were trading about $22 a share two years ago. Recently it’s traded as high as $80 and is now hovering in the $78 range.

Not including acquisition costs, the purchase should add $0.12 to $0.14 to earnings per share in 2014. Annually, adding DCH should increase EPS anywhere from $0.65 to $0,75.

The DCH acquisition will add more than $2 billion in annual revenue and will be Lithia’s first foray east of the Mississippi. Once the acquisition is completed, more than 20% of Lithia’s revenues will come from the east and DCH’s New Jersey and New York stores.

For the most part, the DCH stores matches Lithia’s acquisition strategy , which is to find exclusive domestic and import franchises in midsized markets and exclusive luxury franchises in larger metropolitan markets. The acquisition provides Lithia a foothold in the Los Angeles and New York markets.

Lithia executives are hosting a conference Tuesday morning at 9:00 am to discuss the acquisition with investors.

DCH’s 25 dealerships selling 32 brands

California Dealerships

  • DCH Acura of Temecula
  • DCH Tustin Acura
  • DCH Audi Oxnard
  • DCH Chrysler Jeep Dodge of Temecula
  • DCH Gardena Honda of Oxnard
  • DCH Honda of Mission Valley
  • DCH Honda of Temecula
  • DCH Kia of Temecula
  • DCH Toyota Scion of Simi Valley
  • DCH Toyota Scion of Torrance
  • DCH Lexus of Oxnard
  • DCH Lexus of Santa Barbara

New Jersey Dealerships

  • DCH Montclair Acura
  • DCH Millburn Audi
  • BMW of Bloomfield
  • BMW of Freehold
  • DCH Academy Honda
  • DCH Kay Honda
  • DCH Paramus Honda
  • DCH Freehold Nissan
  • DCH Brunswick Toyota Scion
  • DCH Freehold Toyota Scion

New York Dealerships

  • DCH Honda of Nanuet
  • DCH Toyota Scion City, Mamaroneck
  • DCH Wappingers Falls Toyota

Source: http://www.TheBanksReport.com

Become a subscriber to The Banks Report and get access to more in-depth analysis on the dealership buy-sell market — including the industry’s most comprehensive list of acquisitions going back to January 2013.

You don’t want to miss The Banks Report 2014 Update on Dealership Buy-Sell Activity — available on Monday June 16th.

Report on 2013 Dealership Acquisitions
The pace of automotive dealership buy/sell activity was moderately brisk in 2013, with 180 dealerships accounting for 260 franchises changing owners in the U.S.

The report, the first of its kind in the industry, provides data and analysis by brand, public and private dealer group acquisition. The report, including a list of all transactions compiled is available in Microsoft Excel to subscribers.

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