Dealers Are Venturing Away from Preferred Vendor Co-Op Dollars

By Desiree Homer

Is your advertising is better served with outside vendors?

Dealers often look to their automaker brands for preferred vendors when pursuing their digital marketing advertising partners. There are inherent benefits of working with those suppliers, but as of late, many dealers are shying away from their brand endorsed vendors and opting for partnerships with outsiders within their markets. How reliant are you on brand preferred vendors, and should you be exploring other options too?

Benefits of Preferred Vendors

One of the most identified perks of working with the automaker preferred vendors is the presence of potential co-op advertising dollars that comes with working with them. Increasing your digital ad spend can help you move the needle on your sales goals. It’s also nice to have a properly vetted vendor at your fingertips. Your manufacturing brand approves of the supplier’s service, pricing, and ethics. There is peace of mind knowing you move forward with your digital marketing plans without having to negotiate or entertain multiple proposals.

Why Outside Vendors Are Engaging Local Markets Better

Dealers are venturing away from their franchise brand preferred vendor lists. It’s about customer engagement and results for them. The digital space is noisy, and the best way to attract and convert new leads these days is with individualization and customization options. With the preferred vendors, often bottlenecked with new business franchise dealers from all over the country, are pumping out more ‘boilerplate’ template strategies. Some of these automaker-backed companies are struggling to keep up with the volume of requests for everything from site structure, SEO, and digital ad buys. Dealers are recognizing the need for a more tailored online presence and are turning to outside providers, usually in their backyard, to do it.

Automakers Taking Notice

Some automakers are noticing the shift with their partners and allowing for suggested, outside vendor approval. Last year, General Motors expanded its options for preferred website providers, outside of its former exclusive partner, CDK Global Inc. GM began allowing dealers to sample more region-specific suppliers for 90 days, and if productive, certain percentages of the co-op budgets would apply. Chairman of the Buick-GMC National Dealer Council, Todd Ingersoll, says this dealer-suggested approval process is working, and a “majority of the vendors are co-op approved.” Nick Brunotte, the director of industry practice for consultancy DHG Dealerships, told Automotive News dealers are looking to change their platforms due to ineffectiveness with customer engagements. But, those dealers, having partnered with preferred vendors, are stuck for the rest of the year because “they can’t switch.” Brunotte points out that dealerships have different needs in various markets. A one size fits all template for digital strategies isn’t meeting the customer’s personalized engagement preferences.

Evaluating Your Co-Op Advertising Results

You may be one of those dealers venturing beyond the co-op dollars and approved vendor lists. If you aren’t, you could be missing an opportunity to create the tailored online experience your audience needs. Mike Bowsher, the chairman of the Chevrolet National Dealer Council and Carl Black Automotive Group owner, says dealers are looking to explore their options and test out new digital products in their markets. As the search engine algorithms continuously change, so do many of the tools and best practices. Testing new products in your neck of the woods may not always prove to be productive. But finding new and eye-catching marketing strategies can mean better customer conversions.

Don’t hesitate to test the waters in your market and step away from your co-op dollars. Having the same SEO strategy as countless other U.S. dealers could mean your message is getting lost in the digital noise. Look for ways to separate your dealership culture and experience from those around you, and with relevancy to your market. When it comes to digital advertising, being the stand-out dealer can far outweigh the status quo.