2010 Dealer Digital Advertising Program

David Schoonover 02/22/10

TABLE OF CONTENTS
1. Executive Summary 2. Objectives 3. 4. 5. 6. 7. 8. 9. 10. Budget Timeline Program Benefits Strategy Current State Competition Case Studies Dealer Process Flow 12. KMA Coordination 13. Current Publishing Partners 14. 15. 16. 17. Billing Process Measurement Creative Development Dealer Package

18. Field& Dealer Training

11. Communications Plan

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1. EXECUTIVE SUMMARY

Establish a Tier 3 dealer digital advertising program, inclusive of display ads, search, and social media

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2. OBJECTIVES
‡ Provide Kia dealers with a mechanism to extend their traditional (TV, print, radio) advertising Online ‡ Increase Kia brand continuity and ability to extend sales events and launch communications ‡ Improve dealer profitability through reduced costs
± Dealers don¶t know what they should be paying for digital services. By having KMA involved, we can µwatchdog¶ on their behalf

‡ ‡ ‡ ‡

Achieve net zero cost program for KMA Provide subject matter expertise at the regional and dealer level to foster growth and program development: self-funded by program revenues Educate dealers how to advertise in the digital age, and provide them with online ad development tools necessary to complete the task Improved coordination and consistency for T1, T2, T3 advertising efforts

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3. BUDGET
‡ Assumptions:
± 30% dealer participation (Kia Responsible) ± $4,200 Avg Monthly Dealer Ad budget

Total, Year 1 Earn Back Credits Net KMA Cost, Year 1

$622,180.00 $541,793.80 $80,396.20

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4. TIMING
‡ ‡ ‡ ‡ ‡ EAD 60 days from development to signature RFP 90 days incl. Q&A (draft 30, vendor response 30, Q&A 30) Vendor Selection 45 days (21 days vendor pres, 24 for decision) Contract 60 days (author, negotiate and execute) Systems Dev 120 days

‡ Total time to launch = 375 days

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5. PROGRAM BENEFITS
‡ Plan, develop and deliver a Digital Marketing Program ± Competitive advantages ± Retail digital marketing expertise ± Digital advertising capabilities to Kia dealers in the USA ± Kia Sales Region based resources; Digital Marketing Consultants (DMCs) ± Visit dealerships to consult, implement & execute to immediately impact Digital Marketing and Lead Management effectiveness ± Attend KMA Sales Region¶s relevant meetings, provide training to KMA Region staff and become their KMA Sales Region¶s ³Go To´ resource ± Facilitate KMA Sales Region planning, scheduling, dealer participation and execution of quarterly Kia Dealer Digital Marketing Summits ± Educate and guide dealers towards transitioning an appropriate portion of their monthly advertising budgets into KMA endorsed digital advertising solutions ± Execute direct phone contact and email communications with targeted dealers Increase dealer competitive position by adding their capabilities Adds additional lead generation mechanism Further leverage and expand upon Kia programs (eLeads and Website)

‡ ‡ ‡

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6. STRATEGY

± Leverage Kia iMarketing Dealer Services infrastructure ± Increase dealer knowledge base through significant team involvement ± Install market-level flexibility to fully maximize local-market conditions, politics, economy, events, etc.

Fix Dealer Site and SEO Optimize

Paid Search

Display Ads

Social Media

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7. CURRENT STATE
‡ ‡ ‡ ‡ ‡ ‡ AUTOTRADER ELEADS TRAINING AND CLOSE RATES DEALER ACTIONS AND REQUESTS KIA DEALERS ARE LARGELY ON THEIR OWN DEALER DIGITAL SPEND BY OEM eMarketer.com ³Cross-channel online marketing used to target different areas of the purchase funnel makes an effective combination.´

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7. CURRENT STATE

‡

Dealer Feedback:
± ³Digital Advertising dollars are the best money we spend.´ Large Midwest Group Marketing Director ± ³My problem is I just don¶t have the right guys for all this stuff, I¶m trying to run a business here and if I fall behind by 60 days«I¶m lost. I need this help.´ General Manager of a Market Leading Ford Dealership

8. COMPETITION
‡ All major OEM¶s have a T3 digital advertising program (except Hyundai and Kia) 1. Ford: Long term leadership, large team, digital dedication and significant allocation of human and financial resources since 1997 2. Honda: Excellent business process (a stable of the company) 3. GM: Substantial funding, full program. Downside is that they pay for everything for their dealers, the dealers don¶t have a financial stake thus they are not as engaged. Large company creates lack of coordination 4. VW ± funds and dedication 5. Subaru ± Scrappy and excellent and niche marketing, plus not scared of unpopular niches such as GLBT
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8. COMPETITION con¶t
‡ All major OEM¶s have a T3 digital advertising program (except Hyundai and Kia) 6. Nissan ± live regional trainers 7. Chrysler ± minimal program. Just launched PAP promotional allowance program which provides a higher rate of co-op credits for digital advertising. No other guidelines or services. 7. Toyota ± highly fragmented internal organization (GST, SET) leads to non-centralized strategy

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APPENDIX
1. Case Studies 2. Dealer Process Flow 3. 12. 13. 14. 15. 16. 17. 18. Communications Plan KMA Coordination Current Publishing Partners Billing Process Measurement Creative Development Dealer Package Field& Dealer Training

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9. CASE STUDIES

Dealership Digital Advertising Case Study
Digital Advertising Campaigns using 2 types: 1. Site Placement Targeted Campaigns 2. Keyword Search Advertising Campaigns Albuquerque - Santa Fe, NM Market Dealership Digital Advertising Pilot & Proof Of Concept

Digital Advertising for Dealers
Case Study ± Paid Search and Web Site Display Advertising

3 Month Campaign

PLEASE NOTE: Case Study, your results will vary because no two advertising campaigns generate identical results!

BEFORE Digital Advertising

PHONE VOLUME Previous Month before Digital Ad Campaigns (Nov 21-Dec 29) = Same Days Tracked Website 800 Sales Line = 272 Total Calls

AFTER Digital Advertising Implemented

PHONE VOLUME Digital Advertising Campaigns (Jan 21-Feb 29) = Same Days Tracked Website 800 Sales Line =

476 total Calls

10. DEALER PROCESS FLOW
‡ ADP creates a KIA specific DA information and enrollment portal
± ± ± ± ± Defines KIA DA enrollment process for the dealer Addresses FAQs Dedicated line to track inbound phone activity Automated and manual KIA branded follow-up email communications KIA repository email account to capture any communications for future review such as da@kiarddtm.com

‡ Virtual and or onsite DA presentations ‡ Local area resources for in-store DA presentations, planning, clarifications and enrollment ‡ 1-800-XXXXX ‡ www.KIADigitalAdvertising.com ‡ Support Co-Op and IDA claim submission

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11. COMMUNICATIONS PLAN
‡ Internal
± Introduce the field team in a Field Communication (Regional Digital Dealer Training Managers) ± KIA District Manager Conference Calls and Meetings
± Emphasize the need for their support ± Introduce the KIA DA Launch Kit including presentations and support materials

‡ Dealer announcement prior to the Sportage Launch
± Website (iMarketing, or ADP provided like Cobalt?) ± Phone number ± Letter from Michael

‡ Roll Out

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12. KMA COORDINATION

± ± ± ± ±

Tier 1 In-Market plan I+ D&G Reprise Search AD Kia.com

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13. PROPOSED PUBLISHING PARTNERS
± ± ± ± ± ± ± ± Google; Search Engine and Content Network Yahoo!; Search Engine and Display Advertising Network Microsoft; Search Engine Advertising Network Specific Media; Display Advertising Jumpstart Automotive Media; Display Advertising Outsell; Digital eNewsletter & fully staffed Chat services Kelley Blue Book; Display Advertising within KBB.com DoubleClick; Digital Advertising hosting, trafficking and tracking technology ± Liquidus SpotSense; video advertising. ± DealerRater.com; Certified Dealer program for online reputation management and social marketing ± Liquid Motors; Online classified listings and inventory management tools
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14. BILLING PROCESS
The process will follow the current Proxicom e-Leads structure: ± ADP will manage contracts, billing and payments for all advertising publishers ± ADP will provide Kia on a monthly basis with a statement of charges by dealer ± KMA will bill dealers via the parts statement ± KMA will pay ADP once dealer payments are collected, thus maintaining a positive cash flow ± The billing rate will be 1:1, thus except for startup costs, KMA budgets will reflect a $0 net cost. ± ADP will retain in a Kia µbank account¶ a 10% credit (from ad buys only, not the monthly dealer admin fee). That credit will be used to fund the RDDTM¶s.
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15. MEASUREMENT
Kia Digital Advertising Program for Dealers; KMA Cost Recovery Analysis and Proforma
Kia Advertising Co-Op will require that Digital Advertising be purchased by dealers through the Kia Digital Advertising Program in order for campaigns to be Co-Op Program Eligible. ADP currently works directly with, and Assumption recommends NSI for KMA Dealer Advertising Co-Op program management services. s 30% Dealer Participation $4,200 Average Monthly Digital Ad Media Budget (current ADP DA average for 500+ dealers) Kia Motor America responsible for enrolling 30% of dealer network into program participation. Average Monthly Monthly DA Dealer DA Media Buy Total Budget Monthly KMA Earn-Back Credits

Eligible Kia Dealers

Dealer Network Participation

Net Participating Dealer Count

Annual KMA Earn-Back Credits

642

29%

186

$2,425

$451,487

$5,417,838

$45,149

$541,783.80

Kia First Year Program Costs from "Breakdown" Worksheet Kia Regional Digital Marketing Consultant Annual Cost (year 1): Kia Digital Advertising Program Development and Set Up Costs (one time): $543,200.00 $78,980.00

Total Year 1 Costs (from ADP): Less - Annual KMA Earn-Back Credits: Net KMA Cost for Year 1 of Program:
© Copyright 2009 ADP Dealer Services - Kia Motor America Confidential

$622,180.00 $541,783.80 $80,396.20

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16. CREATIVE DEVELOPMENT
± Virtual Marketing Representative (VMR) & Advertising Campaign Administrator ± Approved campaign services and templates ± Keyword Lists ± Text based Search Advertising sponsored links ± Dealer specific geo-targeting for campaigns ± Up to 5 animated display advertisements per month ± Extensive library of Kia dealer advertisement templates ± Customization for dealer specific text, messaging and links ± At KMA request, creative will be generated and added to the KDAP ad template library. ± Kia Sales Region based resources; Digital Marketing Consultants (DMCs) ± Visit dealerships to consult, implement & execute to immediately impact Digital Marketing and Lead Management effectiveness ± Attend KMA Sales Region¶s relevant meetings, provide training to KMA Region staff and become their KMA Sales Region¶s ³Go To´ resource ± Facilitate KMA Sales Region planning, scheduling, dealer participation and execution of quarterly Kia Dealer Digital Marketing Summits ± Educate and guide dealers towards transitioning an appropriate portion of their monthly advertising budgets into KMA endorsed digital advertising solutions ± Execute direct phone contact and email communications with targeted dealers ± Process Map, timing
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17. DEALER PACKAGES
Conceptual Packages Package One Utilizes Google Search to capture a buyer¶s attention when they are actively using the internet to research, find or buy their next vehicle. Drives additional sales by reaching out to your best prospects and customers with our monthly eNewsletter. Includes: ‡ Custom Search Engine Marketing Campaign ‡ eNewsletter ‡ Designated Virtual Marketing Representative ‡ Monthly Reporting Package Price: $2,000/Mo Package Two Leverage both Google Search and Yahoo Search along with banners on KBB to catch the attention of buyers researching their next car and the value of their trade. Includes Package One Plus: ‡ Yahoo Search ‡ Banner advertisement on KBB.com ‡ Two banner ads for messages/ vehicles/offerings (ie. Ford Fusion, F150) ‡ Floodlight tags on your website to track post impression activity ‡ Monthly Reporting Package Price: $4,000/Mo Package Three This blended approach targets consumers during the active stages of research plus utilizes our ad network and behavioral targeting to advertise to shoppers when they are using the web for news, entertainment or information. Includes Package Two Plus: ‡ Your dealerships advertisement on our premier ad network ‡ Behavioral targeting and retargeting to in-market shoppers ‡ Floodlight tags on your website to track post impression activity ‡ Monthly Reporting Package Price: $8,000/Mo Package Four Dominate your competition by maximizing nearly the entire reach of the internet along while putting your dealership in the front of consumer minds by capitalizing on site retargeting. Includes Package Three Plus: ‡ Ad Display Network: choice of one: Automotive Behavioral Targeting, NetCast or AutoCast products ‡ One set of Custom banners per quarter ‡ Two Custom microsites ‡ Monthly Reporting Package Price: $15,000+/Mo (depending upon market size)

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18. FIELD AND DEALER TRAINING

± ADP to provide 1 fulltime dedicated resource per Region and 1 dedicated Program Manager to:
± Become the RDDTM (Regional Dealer Digital Training Manager) or the Regional SME for all things Digital ± Facilitate Internal and External training sessions/seminars to increase awareness and engagement ± Execute in-dealership visits and mystery shops to speak to what's happening now with the opportunities being generated and provide practical insight to improve key vital statistics such as:
± ± ± ± ± Lead response rates Lead response times Initial and cumulative closing ratios DA program participation and ongoing engagement. Digital portal utilization by the Dealers

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ABOUT ADP
Division of Automatic Data Processing, Inc. 30+ Years Automotive Industry Experience Projects with all major OEMs 25,000+ clients DMS, Digital Marketing, Relationship Management, Networking, & Telecommunications Products & Services ‡ Partnered with industry leaders, including Google, Omniture, Kelly Blue Book, Specific Media and more ‡ ‡ ‡ ‡ ‡

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ISSUES
‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ Single Source Justification I+ to review dealer package offerings Add ADP to terminated dealers eMail ADP to provide first cut at contract Determine financial responsibility for terminated dealers Pixel tagging Kia.com Officially add to co-op program Establish desks at the regions for RDDTM¶s Dealer agreements Legal to negotiate contract terms

‡ Procurement to negotiate trainer and other rates ‡ Update ADP proposal w/Kia travel policy numbers

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