When most of the automotive industry was dismantling dealer advertising pools, which historically supported regional retail marketing, Toyota Motor Sales U.S.A. Inc. kept its system intact.
Now, it is leveraging dealer advertising networks as a way to deploy online marketing services targeting the "ready-to-buy" consumer. The e-commerce model could be imitated by other durable goods manufacturers, experts said.
With a Web site, the system began tests with 19 dealerships in the Washington state area earlier this month. Services on the site allow consumers to check information such as real-time inventory status for multiple dealers within a region, incentive and promotion availability, pricing and dealer financing. Local dealer advertising drives traffic to the site.
The services match many of those provided by Web sites such as referral services Autobytel.com and Priceline.com, but don't crimp profit margins in the way those third-party sites do, experts said.
That's important because many dealers aren't large enough based on their volume to qualify for listings on third-party sites. By supporting the dealer at the manufacturer level, Toyota is bucking a trend.
"Several manufacturers--GM and Ford and others--have tried to alter things significantly with respect to dealer advertising," said David Cole, director of the office for the study of automotive transportation at the University of Michigan. "Manufacturers are saying they are not going to give dealers as much money, but concentrate instead on advertising that builds the brand. [Toyota's approach] is a bit different."
The advertising group structure gives Toyota something unique in the marketplace, said Keith St. Clair, national manager for b-to-c e-commerce at Toyota Motor Sales, Torrance, Calif. "It is our intention to take the best dealers in the offline world and make them the best dealers in the online world. We think the answer to the retail Internet is a partnership between the manufacturer and the dealer."
Many manufacturing sites provide brand-advertising materials or assist dealers in internal inventory management. Toyota is different in underwriting delivery of an array of sales services to retailers, said Vernon Keenan, Internet analyst at research firm Keenan Vision Inc., San Francisco.
"This is one of the only ways the Net can help manufacturers," Keenan said. "This is a call-to-action site. In other words, good, old-fashioned marketing, well-executed on the Web."
Retailers rush in
Toyota's model could be used by other durable-goods manufacturers that aren't prohibited from bypassing the retail channel, Keenan said.
The beauty is that it allows retailers to offload responsibility for Web marketing, he said. That's especially valuable when a large base of retailers is unable to come up with the resources to maintain a healthy presence, he said.
Others are also rushing to provide retail automotive marketing services on the Internet.
For example, Newgen Results Corp., San Diego, has provided call center and direct marketing services to dealers for six years, but it has recently targeted the Internet space. Next month, the company will introduce an Internet subsidiary called Carabunga.com at the e-Auto World trade show.
Its specialty will be providing Internet direct marketing and online promotional services to dealers on a subscriber basis through a portal called The Dealers' One-to-one site.
The new Toyota site complements the automobile manufacturer's corporate presence, St. Clair said. For several years, Toyota has supported a corporate site, which acts as a comprehensive brand research tool. The new site provides the foundation for retail-level marketing, he said.
Traffic on the site so far has been solid. Although Toyota was expecting 600 to 650 visitors daily, it has already surpassed 1,100 daily visitors. If successful, it will roll out to other markets as early as this year, Toyota said.