Why One Auto-Dealer Believes in the Power of Pre-Roll Ads

Sands Chevrolet Finds Ad Unit More Cost-Effective Than Search

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Drew Ament believes in the power of video pre-roll, those ads before YouTube videos, to sell vehicles.

Pre-roll ads typically cost a fraction of other advertising, including a dealer favorite, paying for click-throughs on Google searches, said Mr. Ament, digital marketing manager at Sands Chevrolet Glendale and Sands Chevrolet Surprise near Phoenix.

And when targeted appropriately, pre-roll ads can bring buyers to a store, he said.

"They are good at keeping consumers engaged," Mr. Ament said.

Video watching by car shoppers is on the rise, according to Google, which owns the world's largest online video portal, YouTube.

A Google study from late 2013, "Digital Drives Auto Shopping," found that more than half of auto shoppers watch 30 minutes or more of videos during their shopping journey and one in four watches an hour or more. The latter figure was up 57% from the year earlier.

Also, online video ads prompted more brand consideration than any other ad medium, including direct mail, cellphone ads, magazines, TV and newspapers, the study showed.

Mr. Ament said video pre-roll has boosted website traffic at Sands Chevrolet Glendale 20% since October, when the stores began using the ads heavily.

More important, Ament attributes a 15% rise in dealership walk-in traffic to the stores' switch from traditional advertising, particularly on cable TV, to a reliance on pre-roll.

Each month, Sands Chevrolet works with its vendor, Dealer Preroll of El Segundo, Calif., to create 12 videos of vehicles. The videos are posted on YouTube, and then are used as pre-roll ads on other YouTube videos.

With little local competition for the ads driving up costs, Mr. Ament said he pays on average less than 15 cents per watched ad. That compares with $5.50 per click to Sands Chevrolet for a fairly generic Google paid search ad using key words such as "Chevy dealer Phoenix."

Paid search ads are the links that appear at the top of a search page when shoppers use Google, Bing or Yahoo to find vehicles or stores in their markets. Advertisers pay when the searchers click on the links.

Mr. Ament said paid search is so expensive because of intense competition among Chevrolet dealers in the Phoenix market. He said there are 14 Chevrolet stores there, including the two Sands Chevrolet dealerships.

Truman Hedding, chief marketing officer of Dealer Preroll, estimates that just 10% to 15% of dealerships use pre-roll ads. He told an audience at the Digital Dealer Conference & Exposition here that the lack of competition for the spots helps keep costs affordable.

Mr. Ament said another advantage of pre-roll is the ability to use Google and YouTube browsing behavior to target people who are looking for a vehicle.

For instance, Google can tell when a shopper is looking for a pickup by attaching tracking cookies, or bits of software code, to the shopper's Web browser, then anonymously tracking other shopping behavior, such as visits to third-party auto shopping sites, Mr. Ament said.

The cookies allow Sands Chevrolet to set up a campaign that gets the pre-roll ads in front of the shopper when the consumer goes to watch videos on other sites, including nonshopping news sites, he said. Targeting also can zero in on specific ZIP codes of shoppers close to the store, he said.

Sands Chevrolet, Mr. Ament said, sets its targeting parameters to never send pre-roll ads to video watchers who are less than 25 years old or for whom YouTube doesn't have an age. That's because those under 25 probably can't afford a vehicle and the store doesn't want its ads showing up on children's videos, which is possible when an age is unknown.

Mr. Ament has become such a strong believer in pre-roll ads that he has directed most of the Glendale store's advertising budget to them.

Before starting pre-roll in October, Sands Chevrolet Glendale was spending more than $50,000 per month for advertising on cable TV, Mr. Ament said.

Today, the dealership spends more than $25,000 per month on pre-roll advertising, money that has come out of the cable budget, he said. The store also spends more than $20,000 for paid search and Facebook advertising.

Mr. Ament said, "If you're looking to buy a car today, you're probably going to watch a video."

--David Barkholz is a reporter for Automotive News

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