We’ve discussed in the past the positive effect that online video marketing is having in various industries including the real estate industry as well as professional services and attorneys.  Now we turn to the automotive industry and some recent research that not only demonstrates the effectiveness of online video for automotive sales, but gives us some insight in to adoption of online video by car dealers.

Just the other day, there was a great article on AdAge titled “Car Dealers Learning Art of Viral Video” that highlights the use of online video by US automotive dealerships and specifically highlights several examples and attempts at viral video marketing – including the online viral video campaign done by a car dealership group in Norwood Massachusetts (seen above).

Car Dealers Plan to Embrace Online Video.

According to a study released by the Kelsey Group in Q1 2008, 33% of car dealers surveyed currently take advantage of online video on their own websites. In the same study, 59% of dealers surveyed indicated that they they plan to use video on their own websites within the next 12 months.

Of the dealers surveyed, 46% of dealers indicated that they would likely decrease spending on traditional media in the next 12 months while only 8% indicated the same for online media.  In general, auto dealers are shifting more of their media mix online, with 62% of dealers planning to increase their online media spend compared with only 17% for traditional media.

According to NADA (National Automobile Dealers Association), there are more than 20,800 new franchise car dealers in the U.S. that spent more than $7.8 billion in advertising for 2007.

“These findings point to a significant disruption in the auto dealer advertising space,” said Neal Polachek, CEO of The Kelsey Group. “There are valuable opportunities for traditional and new media companies that tune into dealers’ adoption of Web 2.0 technologies and align with dealers’ online media-buying intentions.”

In the AdAge article, Howard Polirer, director-industry relations for AutoTrader.com, estimates that 1/4, or 25% of all U.S. dealers currently use online video marketing.

So, Does Online Video Marketing Drive Sales?

Larry Pryg, the National Marketing Manager for GM’s certified-used auto business states that “Video is exploding,” and that when it comes to used cars, dealer websites that have video are 2X more likely to generate phone calls or emails from prospective shoppers vs. websites without video.

Wayne Ussery, the Director of Internet Marketing for Jim Ellis Automotive Group said that while he cant quite equate online video views with used-car sales, he does say that visitors to the Ellis Chevrolet brand website are staying a full minute longer as a result of the addition of online video.   Video, he said, “makes your site more sticky.”

What Type of Videos Do Car Dealers Run?

For the most part, auto dealers are primarily only running video on their own sites. Some use video on lead-generation inventory websites like Autotrader and Cars.com and some are even experimenting with YouTube and other viral video sharing websites.

There are a ton of uses for online video when it comes to auto dealers.  Many have used online video to show

  • Re-purposed TV commercials
  • Customer testimonials
  • OEM-style video footage
  • Educational clips
  • Walk-around videos
  • Personalized messages
  • Service shop footage

The Future of Online Video For Car Dealers

While it is clear that adding online video to your website can increase site stickiness and can even help to lure in prospective used car buyers, viral video marketing on places like Youtube may not be the best strategy for selling cars.  Why?  It is important for car dealers to target consumers in their regional markets.  Perhaps the addition of Youtube Geo-Targeting for local video will assist with that in the future.

Car dealers are smart in that even though they will try almost any new marketing trend, when it comes down to it, they will aggressively test and monitor any marketing that they do to make certain that it generates leads and translates to actual vehicle sales.  This is one reason why automotive dealers have embraced PPC search engine marketing over the past several years, namely, we know it generates a high ROI and can be measured.

Several things will be important for online video marketing to succeed for car dealers:

1) Dealers should take advantage of online video marketing in all that they do online to attract and retain new and current customers.

  • Website Video – Dealers should integrate online video into their website wherever it makes sense.  It may make sense to showcase a video of the service department so that consumers can see how “clean & tidy” the dealers service center is, as an example.
  • Email Marketing – Dealers should integrate online video messages into email marketing campaigns.
  • Local Search Marketing – Dealers should add video to local search platforms including Google Maps.
  • Display Banner Advertising – Dealers should opt to run online video banner ads instead of traditional banner ads when running campaigns with local websites, like the local newspaper.
  • Video SEO – Dealers should optimize and distribute online video using Video SEO and video search marketing techniques so that videos appear for relevant locally based organic search queries. As an example, you will see that by searching “Pre-owned cars, colorado springs,” in Google, a video that I created with Mixpo shows prominently in the 5 & 6th position for Mike Shaw GMC Pontiac in Colorado Springs.

2) Dealers need to utilize platforms that allow them to track conversions and response from online video marketing efforts.

  • Online Video Players – Dealers should choose to utilize video players that have integrated links to website, email forms, maps, etc…  It is important to create an online video experience that allows users to directly “request additional information” without leaving the video itself.
  • Call Tracking – Dealers should sse a call tracking number in each video.  Just as dealers use call tracking numbers (IE toll-free or local telephone numbers that are forwarded to the dealer’s preferred extension, tracked, and recorded) for print ads, the same should be used in online marketing efforts.
  • Trackable Overlays – Dealers should take advantage of additional ways to allow consumers to interact with their online video message.  One technique that comes to mind is the use of overlays that contain deep links to website content.   For example, in a video that showcases several cars, dealers can include messages that links viewers to their dealership’s website vehicle search results page.

These are just some of the factors and techniques that I think will be important in taking online video for the automotive industry to the next step. If anyone would like to learn more about my efforts and thoughts on automotive dealers and online video, let me know in the comments below and I’ll follow up with an answer.