Local TV Drives Auto Dealer Successes

As a local advertiser, Mike Johnson is as close to ideal as local TV broadcasters can reasonably hope for.

He operates two dealerships — Mike Johnson’s Hickory Toyota, in Hickory, N.C., 60 miles northwest of Charlotte, N.C., and Steve Padgett’s Danville Honda, in Danville, Va., which is in south central Virginia along the North Carolina border — and has placed 80% of his advertising budgets with TV stations and expects to increase spending 10% next year.

Johnson also serves as immediate past chairman of the North Carolina Dealers Association. In this interview with TVNewsCheck Contributing Editor Janet Stilson, Johnson explains his straightforward, TV-centric advertising strategy, and grumbles about TV account executives who don't understand it. He also shares a little of what other members of the dealers association are thinking and how they may be spending their advertising dollars.

An edited transcript:

Tell me about your media strategy for next year. I’m particularly interested in specifics about TV station spending.

Well, you know, I am probably a little bit unique in this marketplace because I have a very dominant CBS affiliate [Raycom Media's WBTV Charlotte, N.C.], and it seems to continue that dominance year over year. I think, overall, my strategy for 2012 will be the same as it’s been for many years, and that is consistency. I have got to be consistent in my marketing message in order to remain top of mind. So when customers think about buying a car, they think of me.

We will sit down and look at some shows and some times and maybe modify the buy a little bit. If Surviver is out-performing CSI or something, we might move some show times. But we will pretty much be heavied up on news with the CBS affiliate.          

What about the dealership in Virginia?

There, we use the ABC affiliate [Allbritton's WSET Roanoke-Lynchburg].

Has the dicey economy changed the amount that you’re spending on TV?

No, not really. We modified or reduced our TV buy slightly in ’09, but we took that budget back up to the ’08 levels for ’10. In ’12 we will probably be up about 10% over ’11.

Is that true for both of your dealerships?

Yes.That’s correct.

Why the increase next year?

We just see the market coming back. Our production has gone up. We were hit pretty heavy with the tsunami and earthquake in Japan, and so we kind of held the line a little bit. Our budget didn’t go down; we shifted some of the money into used-car marketing instead of new-car marketing this year. But the increase has mostly been due to increased capacity, more inventory. And we believe that 2012 will be slightly better than 2011 as far as new-car and used-car volume.

When you look at the overall pie of money that you spent on advertising, has the proportion allocated for TV and its various digital offshoots changed much in recent years?

It’s about the same.

What percentage is going to television?

About 90.

And is that largely TV station spending?

There’s probably 80% local network affiliates, 10% cable and 10% Internet.

How do you use TV?

I think, here again, consistency is the message. I do an annual buy. So I can tell you in January what my GRPs are and what the budget will be and where I am going to place a spot for June. That’s done for the year.

I think the biggest challenge I probably have is marketing used cars on television.  You don’t have enough time to get your message to the consumer. One of the advantages of a newspaper is that you can list “four doors, sunroof, five speed, 30,000 miles, one owner, candy-apple red, never been driven against the wind.” You can list a lot of vehicles and show how they’re equipped.

In a 15-second or a 30-second or even a 60-second spot, it’s very, very difficult [to convey those kinds of specifics].

Do you use TV Web sites?

No, I don’t. I have found my Web traffic to be much more efficient for me if I advertise my URL on television. I am spending some money to be high up in Google searches and Bing searches, and then the rest of my Internet money is being spent on cars.com and autotrader.com and some of the other search engines that are used-car specific.

You say your spending didn’t really change due to the turmoil in Japan. So has the business been pretty steady-as-you-go at your dealerships?

I was interviewed by the media one time, and they said, “We have heard that Toyota is going to run out of cars by — whatever it was  — April 15. What are you going to do?” And I said, “You know what? This is a fluid situation. So we’re going to continue to sell new cars just like we have always sold them. And we’re going to sell them until they’re all gone. And if they’re all gone and we can’t get any used cars, I guess we will start selling hotdogs.”