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Dealers for the top six automakers spent some $422 million in measured media in the first quarter of this year, according to TNS Media Intelligence.
The retailers who serve on automakers' national or regional dealer councils have more say in the work. But it is the car companies that generally make the decisions about national and regional creative, both often handled by their national ad shops. In the case of Ford and General Motors, however, dealers are now getting a stronger voice in the process.
Toyota Motor Sales USA has "a very dealer-empowered system," since it allows Toyota and Lexus dealer groups to pick their own agencies and run their own creative if they follow broad guidelines, said Matt O'Mara, who spent 15 years on both brands' dealer accounts at Saatchi & Saatchi and sibling Team One. On the other hand, dealers with Detroit franchises are more or less restricted to using creative from the national ad agencies, said the founder of O'Mara & Associates, a suburban Detroit shop that handles dealer ad groups, individual dealers and consults with car agencies on dealer work.
Ford Motor Co. is starting to work more collaboratively with its dealers. Ex-Toyota executive Jim Farley started changing the way Ford creates national and regional ads shortly after arriving at the company last fall as group VP-marketing and communications. Starting in December, he worked very closely with nearly two dozen Ford dealers to fashion new messages.
"The biggest difference is these guys [at Ford] listened," said Oregon Ford dealer Jeff Robberson, a member of the dealer council. In the past, Ford would show dealers a new campaign only when it was completed and ready to break, he said.
Mr. Farley also beefed up Ford Division's co-op money for the dealer ad groups, so that spending will rise significantly this year, said Mr. Robberson, who also handles the automaker's Lincoln and Mercury brands. He said those two brands are adopting the same process for regional-dealer ads.
All 61 of Ford's regional dealer ad groups are airing 20 TV spots with the same overall "Drive One" theme from JWT Team Detroit that broke in April.
Ford, Lincoln and Mercury dealer ad groups spent $100 million in U.S. measured media in the first quarter, $29 million more than the year-ago period, according to TNS. The other five top carmakers' groups posted decreases in the comparable periods, mainly because co-op dollars are generated by unit sales, which are down this year.
GM also revamped its regional dealer ad groups this year, aiming to give them more control over creative. In the past, GM's national ad shops or their affiliates handled the regional work with GM as the client under a centralized system. Due to ad laws in certain states, GM was restricted to gearing messages "to the highest-common denominator," said Mark Degnan, director-local advertising and marketing at the automaker.
The new dealer groups can pick their own creative or media shops, although they must pay for their own production if they don't stick with the national agency or ask the national shop to create a custom piece. Now the regional dealer ad groups are the clients, not GM.
Roughly 70% of the old groups have re-formed under the new system, with 80% of those sticking with the existing agencies; only 20% have opted to move to their own shops, Mr. Degnan said. He predicted another 10% to 15% of the former groups would return.
Dirty little secret
Under the new system, GM has formed regional digital-marketing teams to educate dealers about online advertising and how to measure it. Mr. Degnan said two of GM's regional agencies, Campbell-Ewald in Warren, Mich. (which also handles Chevrolet's national account), and Leo Burnett's Martin Retail arm (which has Pontiac-Buick-GMC and Cadillac) have "heavily invested in the digital space" to help the dealer groups.
GM's dealer ad groups spent a total of $123 million in the first quarter, $27 million less than a year ago, according to TNS.
Auto marketing's dirty little secret is that agencies handling both a car company's national and regional dealer ad accounts generally give the company a discount and charge higher fees to the dealers.
Hyundai Motor America learned the hard way how vital regional dealer ad groups are to the business. Hyundai's vehicle sales fell after it dissolved the groups at the start of 2007, taking what dealers and experts said was $300 million of their annual ad spending out of the market. Hyundai is now putting the groups back together.
Tampa, Fla.-area dealers have not re-formed their group, said Hyundai dealer Scott Fink in Newport Richey. Hyundai asks for opinions and feedback from its dealer's council marketing subcommittee retailers. But, Mr. Fink said, "ultimately it's their decision and their money."