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New Data Clearly States to Newspapers “You're Underselling the Value of Your Core Product!”

By Marc Davidson

With the rapidly rising dominance of the Internet in all things media-related, it has become difficult for traditional media to demonstrate their relevance.  Exponent Media Group has, now, developed a way to measure relevance and prove it within the automotive segment.

For newspapers, the automobile dealer is one of the most valuable advertisers.  They are essential to sustaining a business model supported largely by ads.  Their importance cannot be over emphasized.  However, the trends over the last fifteen years have escalated in favor of other ad mediums.  In the same period, the average ad spend on a per car basis has exploded by 50%.  What happened?

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Simply put, the disadvantage of a tab, or broadsheet, page is that it is finite in space.  Where newspapers merchandise cars limited to a small photo and some brief identifiers, the Internet has limitless space.  Each page online can feature as many photos as a car dealer can snap, and from every vantage point.  The Internet features research, and price comparisons at the click of a mouse.

Newspapers use call tracking numbers to demonstrate product value through call volume reporting, like the Internet.  But, it’s the space disadvantage that is responsible for the shift in the ad dollars displayed in the above charts.  Ad departments contend with this disparity by encouraging sales reps to “Sell The Value of the Newspaper Audience”.  But, that anecdotal appeal to the decision makers in control of the dollars, of one of the largest ad segments, has proven a difficult case to be made…until now.

While arguing the value of the newspaper audience to auto dealers, ad departments tend to neglect the reality that readers are consumers.  Consumers value information they can use to inform and assist them in completing a purchase.  As it pertains to a car purchase, historically, second only to a home purchase, they will use multiple sources prior to committing.  During that buying cycle they don’t care which medium informs them, as they gather deciding factors.  However, providing consumers with information which assists in making a purchase commitment, newspapers have been underselling themselves.  Exponent Media Group, based in Central Florida, is the company responsible for uncovering evidence to prove the anecdotal value arguments ad departments have been using, is factual.

Exponent Media offers its customers a cloud-based pagination solution of their automotive sections complete with tracking numbers for all cars listed in their clients print auto sections.  Those call-tracking numbers end up being the quantifying mechanism an ad rep can use to make the auto dealer stay with their print schedule.  The auto dealer assigns no credit to the newspaper for consumer’s activity resulting in traffic to the dealer website, or customer visits to the lot.

"Automotive general managers like binary outcomes of their advertising dollars in which they can prove clearly this lead came from this source, and this lead didn't", says Chris Maikisch, Founder and President of Exponent Media Group.

Exponent Media Group became aware that call-tracking volume alone was not going to meet the binary nature of auto dealers, and the standards required to warrant them continuing with their ad schedules.  In partnership with one of its clients, The Arkansas Democrat-Gazette, the company developed a program that would track the life span of each car running in the newspaper, once it published.  Each car published, was compared nightly to the current inventory of the advertising car dealer.  When those cars featured in the newspaper were no longer in that dealers current inventory, they informed the newspaper client the car was sold, and calculated the gross profit the dealer should have made. 

Below is a link to the summary portion of an actual daily report Exponent Media Group’s client has access to.  This particular report summarizes, of the 421 cars that ran in the Saturday auto section by Wednesday of the following week, 100 of them were sold.  By comparison, during that same period, those 421 cars only generated 17 track-able calls.

Click Here for Report Summary

The report details each car featured in the most recent newspaper section, totaled by car dealer, and then, the section as a whole.  What was needed next was comparing these results to historical inventory turnover rates, of car dealers.  The company began to look at the other cars not featured in the newspaper, from the same car dealers, and track whether or not, they were selling as fast.

Maikisch goes on to state, "This is where the results we were looking at became remarkable".

The other cars were not selling as fast!  However, to use the company’s data as a comparison would not be impartial.  What was needed was multiple unaffiliated sources to confirm the lower sales rates.  The company researched data from NADA and the plethora of online industry trade publishers and quickly obtained solid confirmation.

"Our research provided us a with a verifiable historical range of 7% to 10% rate of auto inventory turn over per week. Our reporting was showing our newspaper clients were publishing cars that were turning over in the range of 14% to as high 27% per week", said Chris Maikisch.

The results concluded dealers using newspaper advertising were finding that advertising was helping them beat the historical inventory turn rates by 50%, to as high as 170%.  Additionally, the results were not anomalies.  Week to week the results edged, incrementally, but still within the range of 14% to 27%.  This was across many markets.  Metro and Rural markets, the results seemed to be proving one thing – newspapers generate all types of activity, eventually resulting in more cars being sold.  The industry is clearly over-delivering relative to their value perception.

Having been affiliated with the automotive advertising segment for more than 20 years, Maikisch enthusiastically puts it this way –

"There's not a medium on planet Earth, than can confidently walk into a dealership and say, hey, you advertise some of your cars with us this Saturday, and by next Wednesday up to 1 out of every 5 cars you place in the newspaper will be gone. You interested ? "

Maikisch also feels the industry as a whole needs to take note of this phenomenon.  He asks: “if they are underselling themselves in the automotive field, what are they doing in other advertising areas?”.  He admits that few areas of advertising are a simple to track as cars, but the notion is certainly something to consider.

NOTES

Historical dealer inventory turn rates referenced:
http://www.autodealermonthly.com/channel/dpsoffice/
article/story/2011/10/inventory-management-is-really-cash-management.aspx

http://csimarket.com/Industry/industry_Efficiency.php?ind=404

Author Marc Davidson is a freelance writer who has spent a lot of time around the newsroom as reporter, copy editor and editorial columnist.