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Thursday, April 23, 2015

Haley: Driving Auto Ad Revenue to Radio


Marketron President and CEO Jeff Haley looks at the issue of radio stations complaining about losing advertising revenue from auto dealerships to digital advertising. Haley says it is time to stop complaining and instead search for the proper solutions to regaining the auto dealership dollars. In a new blog, Haley offers those solutions. Read that blog exclusively below...

Driving More Radio In Auto

Jeff Haley, President and CEO of Marketron

Car dealers have long been a radio top-five advertiser. They rely on our community ties and leverage our brands to bring them closer to local customers. When you look across local community supporters it's often the car dealer and the radio station that are doing the most for local efforts. That partnership has been challenged recently by the changes in the media mix for Detroit and dealers. As Detroit has placed a bigger percentage of their tier-one dollars into digital, a trickle-down effect has created a new trend in dealer marketing -- "the all-digital dealer"

The all-digital dealer is at this point more of an anecdotal story than an actual statistic, but I have been hearing that story from a lot of broadcasters lately. It's one of those situations where I imagine sales managers and market managers feeling that they have no options when an all-digital dealer drops out of the category. In some respects this is where our share-based compensation works against us. If the dollars have left radio I don't have to worry about the station across town and I'll just wait till the dealer comes back to radio. That thinking will help us lose a lot of dollars and sell way less cars.

A staggering statistic that I came across from states that in 2013 adults spent as much time on desktops as they did their mobile device (2 hours 19 minutes), in 2014 mobile was expected to eclipse desktop usage with an estimated 2 hours 51 minutes, with desktop usage declining. The fact is, mobile usage will continue to grow and that is what is leading the surge in digital advertising.  It was estimated that nearly 30 percent of all digital spending in 2014 was aimed at mobile, but by 2018 that number is expected to be closer to 70 percent. These are the numbers that the decision-makers in Detroit are seeing and reacting to and can NOT be ignored. Radio combined with a mobile strategy WILL MOVE CARS!

I recommend selling the all-digital dealer what he/she wants. It's not digital, it's something new. The dealer sees Detroit cutting big deals with Google, Facebook, and others. The dealer gets pushed some of those packages down into tier-three programs. So for their own dollars they want to try a new way to market. Radio can serve this need. (And, in full disclosure, Marketron has products to help).

According to Marco Mottola, digital sales manager at  Digity, a local media, digital entertainment and event marketing company, "Geo-fencing is a very powerful product and has given us a great tool to offer our advertisers, making us more of a resource to our clients, and it rounds out our portfolio of products. It's important to have these kinds of products to compete for advertising dollars, the bottom line is that we have to deliver results to our clients and geo-fencing is doing that, and doing it well."

Radio sellers can now add the power of two-way communication on top of their broad reach broadcast. From Display, SMS, Geo-fencing, iHeartRadio, Rdio, and Next Radio there is not a single seller in our industry who does not have a tool to leverage, to sell to that dealer. In fact, radio has had these tools for nearly a decade now. My suspicion is that we have not sold much because the demand was not affecting us in our top categories. It is now. It's time to dust off those digital pitches and go back into the marketplace with refreshed ideas and new packages that serve our customers what they are shopping for.

This week I had a conversation with a small independent broadcaster in a 100+ Texas market. I asked him how his auto business was going. He said it was all up except for a Nissan/Chevrolet dealer who had left radio to go all-digital. "I would be up in auto if it wasn't for that one guy who left."

I told him about geo-fencing, which can conquer Toyota and Ford prospects with mobile display ads when they are actually on that dealer's competitors' lots. It's an amazing technology that complements but can't replace the broad reach of a radio campaign. Imagine if every radio seller could answer an all-digital dealer with a set of tools that gives them something new and keeps them in radio.

They can. The tools are there. And I know one broadcaster in Texas who is going to be up in auto this year. 

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