Newspapers still deliver for some dealers – Automotive News (subscription) (blog)

Bob Mann said a customer recently arrived at his dealership directly from the hospital to buy a car. The customer had been sitting in the waiting room while his wife was undergoing tests when he spotted a newspaper that included an ad for Mann’s dealership.

“That’s what keeps me aggressively in the paper,” said Mann, executive partner at South County Chrysler-Dodge-Jeep-Ram in Gil-roy, Calif. “The spontaneous and unpredictable sale happens.”

Though his store is roughly a half hour from Silicon Valley, the hub of all things digital, Mann said he invests 60 percent of his advertising budget in print. That usually amounts to $100,000 a month, about 90 percent of which is spent with The Mercury News in San Jose.

In that sense, Mann is not the typical dealer. On average, newspaper advertising made up less than 14 percent of dealers’ ad budgets in 2015, down from close to half their budgets in 2004, according to the National Automobile Dealers Association, as more ad dollars migrate to more targeted digital outlets.

But there are still plenty of dealers that, like Mann, are bucking the trend, saying newspaper advertising brings them significant results and a better chance to stand out among competing dealers. In 2015, the latest full year for which data are available, dealers across the country spent nearly $1.2 billion on advertising with newspapers.

One benefit, according to dealers: The rates are competitive with other media options.

Six years ago, Mann said, a full-page newspaper ad cost $5,000. Now it’s $1,200.

“In order to be at the top of a Google search, there’s a bidding war that goes on, so if you add up the dollars it takes to stay on top, it’s a lot cheaper to stay in print,” Mann said.

Dave Dariano, general manager of Metro Ford Sales in Schenectady, N.Y., said he routinely spent between $8,000 and $12,000 for a weekend ad when newspapers were big; those ads now cost him only $1,000. His two area papers, the Times Union in Albany and The Daily Gazette in Schenectady, are home-delivered seven days a week and have a wide reach in their markets; many of his customers also read it online.

Erik Radle, CEO of Miller Ad Agency in Dallas, said newspapers remain a key way to reach the 55-and-older segment, a group that still voraciously reads the newspaper. He cites a report from the Pew Research Center indicating that among those ages 55 to 64, 38 percent still read the newspaper; that figure climbs to 50 percent for those age 65 and older. 

And with so many print publications folding, “you have a very loyal 55-and-up audience that has fewer places to go, so it’s a more distilled medium and less dealers are in it,” he said. “Some of the highest-performing dealers in the country are still dedicated to newspapers,” he said.

Wesley Jackson, who oversees automotive for publishing giant Gannett and is regional president of the Courier-Journal in Louisville, Ky., said the majority of Gannett’s advertising revenue is from the automotive industry, though he wouldn’t give a specific percentage. 

That breakdown, however, includes a broad suite of digital marketing services that auto companies buy. He says that throughout the USA Today Network, Gannett does business with more than 4,500 franchised and independent dealers and that “thousands of our clients are engaged in a digital marketing relationship and also leverage our print audiences.” 

While every dealer is spending more time with digital marketing, he said, in Gannett markets, the print product “is among the most efficient vehicles to reach the largest percentage of consumers who plan to purchase a vehicle.” 

Jerry Slaughter, executive manager of Mission Chevrolet in El Paso, Texas, spends half of his ad dollars in the El Paso Times, which is part of the USA Today Network. After surveying his customers, he found that the newspaper continued to be a favored source for bargain hunters, who often bring the newspaper with them into the dealership. 

“So long as we continue to get that positive feedback that the newspaper is working, we will continue to be there,” he said.

Small-town staple

For all of the challenges to its business model, the print newspaper remains a staple in small-town America.

“Whenever you go to small breakfast and coffee shops, there’s a newspaper on every table,” said Mark Ford, general manager of James Hodge Ford in Muskogee, Okla. Often when he’s appraising a customer’s car for a trade, he sees a newspaper with his ad in the passenger seat.

Ford said he invests 18 percent of his monthly budget — roughly $69,000 annually — in print. The bonus is that he’s the only dealer still in the paper.

The Muskogee Phoenix has such attractive terms that he advertises every day; on coupon days, the paper wraps the coupon section around his ads.

“Papers are willing to play ball and give you real estate that you never had access to,” he said.

Troy Spring, CEO of Dealer World in Lehighton, Pa., a marketing agency for dealerships, added that it’s often far less expensive to be a big player in traditional media in small towns than in big cities, where ad rates are higher.

And those involved in community newspapers, with circulations under 10,000, say they aren’t experiencing the same reductions in advertising spends that the larger publications are seeing.

Matt Paxton, publisher of the News-Gazette, a 7,000-circulation weekly newspaper in Lexington, Va., and president of the National Newspaper Association, which represents 2,200 community newspapers, says well-read community newspapers can still deliver an effective audience for dealers. Community weeklies may also fare better in attracting print advertising from dealers because of the lower broadband penetration in rural areas, he said.

In larger markets, meanwhile, newspapers are finding ways to keep dealers from defecting to digital. Bill Pitchkolan, automotive manager for the Texas/New Mexico Newspaper Partnership, part of Gannett, acknowledges that dealers have shifted from print to digital over the last 10 years. But he says dealers still provide a significant amount of revenue with their print advertising.

His company is trying to make newspaper advertising attractive by developing strategic programs for dealers, operating as a full-service ad agency. It’s providing tools such as registration data from IHS Markit to help analyze dealer markets and is offering digital venues such as targeted display ads for mobile. Pitchkolan said print advertising “still has a broad reach.”

In Albany, the Times Union runs lengthy auto sections on the weekends. Jeff Kiley, automotive sales manager, said total automotive ad revenue was up 3 percent in 2016. It helps, he says, that rates are more competitive, in part because the company is using less newsprint.

It also offers to package digital advertising with print products and has an in-house digital agency consisting of 11 employees, including two social media experts. Kiley said roughly a dozen dealers have opted for the in-house marketing service.

Glenn Pasch, CEO at marketing firm PCG Companies in Eatontown, N.J., says some dealer clients initially dropped print, yet returned because many competitors fled, giving them a chance to dominate the print sector. He doesn’t see the market for newspaper advertising going away.

Dealer World’s Spring agrees. The idea that print is dying, he said, “is the furthest thing from the truth.”


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