AKRON—”Half the money I spend on advertising is wasted; the trouble is, I don't know which half.”
That phrase, attributed to marketing pioneer John Wanamaker, remains a business truism nearly a century after his death, often quoted off-the-cuff by marketing professionals when discussing the art of reaching consumers.
While it still rings true to a large degree, advanced statistics along with the advent of digital marketing have helped to make the effect of advertising dollars more traceable. More than ever, businesses want to see a real return on investment from the money they spend on advertising, and as a result, advertising is becoming more and more a numbers game.
“Quite frankly, you can't even compare two decades ago to now,” said Chuck Haring, director of marketing and advertising for Buffalo, N.Y.-based Dunn Tire L.L.C. “The marketing landscape has completely changed. Consumers' media consumption habits have changed dramatically. There are so many different ways to spend advertising dollars and so many different ways to touch the consumer with your brand.
“Because of that, it is inherently important that an advertiser knows what is working, what isn't working, what creates store, Web or social interactions, what stimulates customer conversions and what their marketing dollars are doing for them.”
Mr. Haring said the Internet has “exponentially accelerated” advertisers' ability to target consumers, but the age of micro-targeting may well have more to do with the proliferation of cable television and the variety of channels based around different lifestyles and demographics.
“There were always lifestyle-based magazines, but in my opinion cable TV was the catalyst that brought consumer targeting to the forefront,” he told Tire Business. “The Internet, though, is a complete game changer.”
Fortunately for tire dealers, available technology has created several very cheap and effective ways to take a more targeted advertising approach. Perhaps one of the easiest is by using their own existing customer databases more effectively.
“Without a doubt—and I think a lot of companies don't realize this—your own customer database is one of the most valuable marketing assets you have,” Mr. Haring said. “A lot of companies, from what I've heard, don't do a lot of stuff with their own customer database. The reason I said it's the most valuable thing we have is if they've already been to your store, they're most likely to come back.
“It costs you the least to get them back into your store. Trying to get a customer into your store that has never been there costs you a lot more.”
It's very simple for dealers to implement email reminder programs for things like oil changes, alignments and state inspections. “Those are real tangible, and you can associate dollars to them,” Mr. Haring said.
Anthony Blackman, owner of Cary, N.C.-based Atlantic Tire & Service, agreed that building and using data files on customers is a key part of successful advertising, though it doesn't have to revolve around service reminders.
“Marketing studies have shown that people like to be informed. We send a lot of things out, not asking for their business, but just basic information about car care,” he said. “I think we do a pretty good job of keeping our name out there.”
But most companies—even those that believe they are using their databases effectively—could benefit from improvements, Mr. Haring said.
“I think if someone thinks they're using their customer database effectively, they're probably not using it as effectively as they could because we're not. I think we're doing a pretty good job, but there's so much more we could do with it,” he said. Mr. Haring noted that the next step for Dunn Tire's database is customer segmentation.
“What we're trying to do is understand who exactly our customers are. Every person in the United States is classified into about 72 different categories, so we're getting into the process now of taking our customer database and classifying it into the categories that are industry standards for this sort of thing and then using that to understand who are the top 20 percent of our customers and what do they look like,” Mr. Haring said. “And then once we know who the top 20 percent of our customers are overall then we can start marketing to them a little more differently than we would the bottom 20 percent.”
Mr. Haring added that through database segmentation, the customers who make up the middle of the dealership's customer base can then be targeted to return more frequently.
“There's a whole conversion plan you can put together to move customers up the notches and get them into your stores more often and create better customers out of them,” he continued. “And then you got to understand that the bottom 20 percent of customers are probably just not loyal customers.”
Pay-per-click online advertising is another wise investment dealers can make if implemented properly, according to Mr. Haring. Using key phrase marketing through search engines like Google and Bing, dealers are able to reach a more targeted group of consumers—those who actively are looking for tires.
“People aren't seeing your ad unless they're looking for your product and typing in the key words for your product.... Unless they're in the market and looking around for your product—for tires—your ad's not even showing up,” he said. “Better yet, you're not paying for it unless they click on it. That's why we love it—it's so targeted.”
Rather than take consumers straight to Dunn Tire's website, the company's pay-per-click ads take them directly to a coupon online. The company is then able to track how many of the coupons come back into the store, which “makes it a little more tangible for us,” Mr. Haring said.
Another benefit of pay-per-click is the ability to set a maximum budget. “You can set it by month, day, week or even hour,” he said.
He also recommended dealers claim their existing Google, Bing and Yahoo business pages.
“Google has made it their mantra to map the United States. They're mapping the United States from a business perspective, so almost any business that's been established for a while will have a Google Places page, created by Google, based on their address. All they have to do is type in their address or the name of their business, and they will see, most likely, Google has created a page for their business.”
Claiming these pages provides dealers with benefits like the ability to post coupons for free and to respond to negative comments.
“If somebody posts a negative review and you have no way of responding to it, that can be pretty damaging to your reputation, so it's really important to claim all of those,” he said.
While traditional forms of advertising are considered by some to be dying breeds—being pushed aside in favor of online advertising and social media—a few of these outlets still have their uses, especially when it comes to general brand awareness.
“The broad-based media out there that everybody says you have to do, but you're not sure what you're getting from it—like television—is still a useful media for building brand awareness,” Mr. Haring said. “It's hard to track though.... With TV that's kind of the thing, but you know that it's working for you.”
However, Mr. Haring said, television is becoming more targeted as well through cable systems featuring interactive advertising technology.
“This is a mechanism that will overlay a banner on the bottom of an advertiser's commercial, allowing the advertiser to interact with the viewer. The advertiser can ask the viewer a survey question, or ask if the viewer would like more information on the product or even send the viewer to view a video on the product in the cable systems on-demand tier,” he said. “All this is done by the viewer using their remote to interact with the commercial, and the results are very trackable.
“...We are migrating to individualized media. The days of mass media are disappearing. Televisions are coming cable ready, which is fragmenting viewership even more than in recent past. People are deciding what they want to watch and when...,” he said.
The effectiveness of more traditional advertising methods often depends upon a dealership's location, said Mr. Blackman, who continues to focus on many of these traditional venues in addition to growing Atlantic Tire's online marketing presence.
“There's a lot of thought in the marketing circle that direct mail has lost its impact,” he said. “That may be true in some communities, but not in this area.
“I read an article the other day saying people are not as excited about coupons anymore, and that last year for some reason people redeemed fewer coupons at an alarming rate. Not so right here,” he continued. “We can track ours through our software here, and we're very, very pleased with returns. We get almost 5 or 6 percent returns from those things, and that's phenomenal.”
Utilizing traditional advertising methods doesn't mean a business can't find ways to make those methods more targeted in a geographical sense, Mr. Blackman said.
“Traditionally it's been the five-mile radius they say you draw your customers from,” he said. “We've cut back to two-and-a-half miles and saw no difference whatsoever, and we've been very pleased with that.”
Print media has worked well for Atlantic Tire, too, Mr. Blackman said, but through the use of smaller neighborhood publications.
“They may go out to only 600 people, but that is a defined market for you right there.... We've backed off of newspaper. We go in there and try to shoot it out with the big boys. I can't do that. I can't go in there spending $3,000 a week in ads,” he said.
Lastly, Mr. Blackman said, being actively involved in the local community through the sponsorship of local sports teams, hosting car care clinics and taking part in charities and other events also can be a very effective form of advertising.
To reach this reporter: wschertz@ crain.com; 330-865-6148.