What the Internet Can't Do - automobile industry marketing - Brief Article

Automotive Industries, July, 2000 by Maryann Keller

The Internet is a marvelous tool for auto companies to get the word out about their products, for customers to research the vehicles they are considering and for dealers to lower their customer acquisition costs. The Internet is, above all, about the efficient dissemination of information. It's about pricing, car reviews, recall notices and checking what's in a dealer's inventory. With a few clicks of a mouse, a car buyer can become informed about all aspects of his or her purchase decision.

But for all of the hype about the Internet and its impact on the auto industry, it is not going to change the number of cars and trucks that will be sold. It's also debatable about how much impact the Net will have on an individual automaker's market share, or on customer loyalty.

The size of the vehicle market has always been a function of underlying consumer economic conditions. Interest rates, gasoline prices, stock market gyrations and consumer confidence determine the number of cars and trucks sold -- not the number of auto banner ads that blink on thousands of websites. The Internet will not alter cyclical swings in demand, up or down.

But can it influence a company's sales and market share more than other media?

Conventional advertising blasts its message over television and radio to the millions of viewers and listeners who aren't going to buy a new car. Not much can be conveyed about a product in 30 or 60 seconds on television. However, the on-line visitor may read or interact for five or 10 minutes, more than enough time to provide as much information about a car as anyone could want.

Throughout the history of the auto industry, however, we have seen that the biggest advertiser, General Motors, hasn't been able to stem the slide in its market share -- not for lack of spending, but for lack of competitive product. Now GM is in the midst of an aggressive campaign, and arguably is spending more on the Internet than any other auto company. GM has struck deals with high-traffic links like AOL, NetZero, Edmunds and others, to intersect with the general public as well as people who are clearly searching for information that would identify them as car buyers. GM is right to try to reach out to Internet users to introduce them to new GM products and increase traffic to its website. GM's new product message is an important one to get out to an audience that is not familiar with GM products. But the real proof is not how much traffic is increased on the website; rather, it is how much that is reflected in the showroom and in the sales tallies.

But simply "talking" to them through the Internet and even getting them to come into dealerships to test drive a vehicle won't be enough, if the vehicles themselves don't meet customer expectations. The virtual world can prod a potential car buyer to add another model to their list of potential purchases, but it won't make them buy it, any more than 60-second TV spots on the Super Bowl do. The virtual world and the real world come together in the showroom when the customer sits behind the wheel, takes the car out for a ride and then makes a value judgment based on how it meets his needs versus its price.

A look at the Top 10 models sold each month through Priceline, Auto-bytel and other online services place Honda Accord, Civic and Odyssey consistently at the top. Honda's Internet efforts have been minimal; indeed, the company probably should be doing more in the area, because it's such a powerful medium. But clearly, people are not buying Hondas because of the Net. People buy Hondas because of their design, engineering and features. And so it will be for every other automaker.

No manufacturer should be fooled into thinking that a fun, informative website is going to have any more influence over a vehicle purchase than a funny TV commercial.

MARYANN KELLER is president of auto services at Priceline.com.