Summary

The challenges faced by a renowned digital marketing firm, CDK Digital Marketing, as they
sought to resolve a particularly complex issue during the renewal of their sole-provider contract
with General Motors in 2012 are detailed in this case study. The project manager Melissa
McCann was putting together a plan for their presentation to support CDK Digital's request to
continue managing the websites and online marketing for more than 4000 General Motors
automobile dealers. The problem was to find a solution that would benefit both CDK Digital and
the automobile dealers. The renewal of the contract with General Motors (GM) was essential for
CDK Digital as GM were their biggest clients. The changing consumer trends and the drastic
change in advertising media over the years were also key factors among the decision makers to
renew their contract with CDK Digital. There was inefficiency in advertising which left the
individual dealers unsatisfied and therefore, Melissa McCann’s team had to build a solid
proposal to convince the subcommittee.

Q: What misalignment(s) caused channel conflict between manufacturers and

dealers in the automotive industry? How was this conflict reflected in the
attitudes of GM and its dealers toward the CDK Digital Marketing program?

The manufacturers sought a website that would convey a uniform brand image, while the dealers
wanted a digital platform that was simple to configure. Manufacturers sought to sell more
Original Equipment Manufacturer (OEM) components, while dealers needed a website that
would let them offer the items that were in demand in their region. Less than half of the dealers
used the CDK's website as their main sales platform, despite GM mandating that they do so.
Moreover, the dealers, instead of using the cutting-edge analytical methods employed by
marketing firms, based their advertising judgments on outdated "rules of thumb" from the past.

Simply stated, the Manufacturers and Dealers had opposing goals. A platform that might satisfy
one side would frequently let down the other. The Dealers really desired a website that would
help them stand out from their regional rivals. They were unable to get that kind of flexibility
using the CDK Digital Marketing platform. Many of the dealers were let down by CDK's value
proposition as a result of this flaw, which became painfully obvious when CDK was charged
with persuading a Chevrolet Dealer's CRM committee to extend their contract. One committee
member was unwilling to even attend the meeting because they were so unhappy with the
service.

On the other side, the Manufacturers needed to sell more expensive OEM components while
maintaining a consistent brand image across all of their web channels. . Another issue was that
the website content and local and regional dealership advertising rarely matched OEM
statements. To achieve these objectives, GM made the decision to establish compliance standards
and make their franchisees abide by them. However, there were some unfavorable side effects,
especially in terms of how Dealers perceived CDK's services. ‘

Another misalignment was that the old simple platform model by CDK Digital had inefficiency
in advertising which inadvertently led to different sites for both GM and dealers. The
fundamental issue, which proved costly for both sides, was that these sites were competing for
the same advertising keywords.

Q: How would you characterize CDK Digital’s core competencies as of 2011?

CDK Digital was one of the leading advertising platforms in 2011. The company had built up its
advertising business model from simple advertising to advanced user generated content online
advertising which led the company to attract big automobile manufacturers such as Lexus,
Mitsubishi, Nissan, Volkswagen, and GM. This was all achieved using continuous improvement
in online advertising by the company.

The changing consumer behavior really benefitted online advertisers, and CDK Digital in
particular. Internet and TV overtook newspapers and radio as the leading media for advertising
and CDK Digital used this to their advantage as they focused entirely on internet advertising to
direct traffic towards GM sites and dealer sites for automobiles. Consumers now relied heavily
on web-based research which meant CDK employing online advertising tools to direct customers
towards dealers’ sites, which was a core competency of CDK Digital.

However, the most efficient core competency of CDK Digital was the company’s ability of using
digital tags (or in Internet terms “cookies”). As a customer uses websites online, digital tags start
accumulating on the backend. CDK Digital used digital tags across "all CDK Digital dealer
websites, all OEM websites made available by the company, and third-party websites",
according to the case study, that offered CDK Digital access to digital tags in order to trace a
significant chunk of an automotive shopper's online experience. Moreover, CDK Digital’s
acquisition of AdMission also meant enhanced online advertising directed at the customer using
based on individual searches on the internet. CDK Digital was the pioneer in this department for
online advertising.

Lastly, CDK Digital also used search engine optimized keywords to direct the GM and dealer
websites at the customers, integrating analytics and user interaction towards customer’s use of
dealer websites to optimize the online automobile buying experience.
Q: Suppose a car shopper’s interest could be known when she visited a dealer
website. How would the dealer want to treat her? What about the OEM?

A car shopper’s online journey is an essential part of understanding consumer interest and
buying behavior by the dealers as it can give analytical evidence as to what the consumers want
and how they want it. A creative imagination is necessary for the dealer to comprehend the
interests of the clients. The models the consumer is interested in seeing should be shown to them.
Channels of communication should always be kept open by the dealer.

When a car shopper visits a dealer website, there are multiple ways as to how the dealer might
find an efficient way of treating her. Primarily, using SEO techniques, direct the relevant make
and model of the automobiles towards the customer to gauge her. Dealer might also want to
gauge the car shopper with his unique value proposition that is only offered by the respective
dealer in the region to gain customer loyalty. While the customer is on the website, the dealer
might ought to design the user interface (UI) of the website in a user-friendly way in order to
make the customer feel easy with the functionality of the dealer website and she can navigate
around easily. Moreover, the dealer ought to store customer preferences and interests in the form
of digital tags for further advertising in the future. Moreover, the dealer would want to treat the
customer in such a way that would result in customer buying an automobile from the respective
dealer and this could be achieved by using the standards mandated by the OEM.

For the OEM, the main issue on dealer websites revolves around strict brand standards with more
leaner networks. If a customer visits a dealer website with the OEM’s automobile, the OEM
would ought to treat her with the original branding and quality services as if the customer would
experience if they bought from the OEM itself.

Q: How can CDK Digital leverage its core competencies to provide a website
solution that both GM and its dealers consider to serve their interests?

After the economic recession of 2008, GM almost suffered bankruptcy and lost 60% of their
ownership to the US Government. Now they have find a comeback in the market to retake their
market share and improve their financial conditions and for this they need immaculate online
advertising. Their current contract with CDK Digital is about to expire and CDK Digital is about
to submit a new proposal to sign a new contract with GM, which would cater to the problems
faced by the dealers with their websites. If a firm like CDK Digital is in competition to maintain
its business' profitability, it is important to become a solution provider and distinguish goods. To
bridge the gap, CDK Digital should use its core competencies and match them with dealer
requests.

CDK Digital using their SEO specialties should integrate the OEM and individual dealers’
websites to have common digital tags. In this way, they would be able to direct the customers
towards both the sites depending on their region and interest. Moreover, CDK Digital should
integrate both parties’ websites in such a way that bidding for keywords is only done once and
both the OEM and dealers take advantage of it.

Furthermore, the main issue faced by the dealers was their inability to control advertising on
their own websites. CDK Digital should continue their single platform model, where they
provide websites to each dealer, but with increased customization and ability for the dealers to
change certain advertising aspects to offer their own unique value proposition. Dealers should
have some control over the core functionality of their websites but under certain advertising
standards mandated by the OEM. Lastly, they should have the analytics derived from their
websites and CDK Digital should collaborate with the dealers to derive an optimal advertising
solution that would benefit both parties and continually improve them.