‘Endemic’ Value to Autos Ads?

If the AOR’s and Media Shops in the Autos world are doing their jobs diligently, as their major OEM and Tier II clients are expecting of them now perhaps more than ever, the issue of paramount importance in my mind to them would be “value”, maybe more than any other metric in the Adv/Mktg budget mix [being fair here, most of the Agency’s I talk to ARE working flat out these days].

Specifically, I am addressing the area of New-Car Shopper Reach, and the CPMs being charged Online to “reach that Reach“. Over the last couple of years, as the online Audience searching for information on cars has grown [in terms of both Unique Visitors and Impressions overall], the CPMs charged by the ‘Endemic’ Autos sites to reach these exalted ‘New Car Shoppers’ has inevitably grown at a similar pace. Or greater.

But with CPMs for prime Autos ad inventory well past the $20-25 level [and even higher than that in many cases], are these cost levels justified…in reaching fewer New Car shoppers that are actually buying? With New Car sales levels dropping from the 17M+ level in recent years, to the 10-12M projected level in 2009, are the CPMs of years past justified? Are they going to hold? [And since this is a Sales blog, how does this affect those on the Sales front, i.e. YOU, who will be held responsible for holding those rates regardless, by your Mgmt?]

Back to the Client side, its not just Sales levels for the OEMs; with all of the ‘Employee Plan’ Sales Events and ‘Buy Your Gas’ programs out there, clearly Margins and Unit Sales are BOTH taking a hit.

How can I say “fewer” New Car shoppers are being reached? Ads from a leading classified site now claim 15M monthly shopppers. Even if they could claim that the ratio of their audience looking at New Cars has stayed the same through all of the economic trauma [I don’t know that they are, this is an example], it would be very hard to claim that the same ratio is actually BUYING a new car, with sales down 40% or more in the US. So, do those double-digit CPMs make sense for the OEM’s to now be paying? More, should they pay those CPMs for those traffic levels..if they are selling LESS new cars, regardless? From the top of this post, I would think this is getting looked at closely by both Agency and Client in the Autos world right now.

As the Online ‘Upfronts’ get underway going into 2010, what is the problem, then? For the Autos sites, it appears clear. With ‘x’ amount of Clicks/Traffic/Impressions/Searches promised in last year’s proposals…which may, or likely may not…have been reached, their Sales effort will need to focus instead not on Audience Growth, but the urgent Value of reaching Shoppers from among the smaller available pool of ready buyers. That is a much different argument, one that Newspapers have had to try in the last 3-5 years. Call it ‘The higher value of reaching those Shoppers among the smaller pool’ argument, to justify where they are at on CPMs…let alone go higher.

The Sales effort will be tough for the Endemic sites. Here are suggestions:
1> Look for other ways to ‘build in’ value for your Clients/Agencies: Video, Content Integration, Sponsorships. [Cox buying Adify, for use by AutoTrader? Not what I’m talking about.]
2> Offer better Metrics that DO clarify what I outline above: that you are providing a direct sales ‘path’ from Brand Awareness, to Consideration, to Comparison, to Purchase. The better you make that case, the better your CPMs. [Ironically, as I am finishing this post, the lowly Autobytel springs back again, with an offering very much along these lines. The article from Online Media Daily, entitled, “Autobytel Opens Doors With Data” can be read > here].
3> Do a better job of understanding what your Agency/Client values, and make sure you are aligning every communication, and Proposal, to each of these items. If the value is not perceived, it is not real at a time like this, and if it’s not “real”…it will be gone, soon. You don’t want to be ‘gone.’

What I am addressing here largely applies to the Classified sites [Cars.com, AutoTrader, and the aggregator sites like Oodle, etc.], and to a lesser extent, the ‘Combined’ Autos sites, like Kelley Blue Book or Edmunds, which add vehicle listings in with their other main assets, such as editorial, reviews, calculators and payment plans. [Edmunds appears to be in a breakout year for 2009, so congrat’s to them.]

Time, and the economy, will tell how this plays out. So will changes on the Web, that will alter the Autos buying/shopping model, as all models change.

[Disclosure: I worked for nearly 3 years at one of the leading Autos Classified sites, heading up a Brand team responsible for Tier I & II revenues. It is among those listed here.]


~ by MindOnMediaSales on July 31, 2009.

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