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If you have a question not related to media relations, please call customer service at (888) 780-1286 or contact us here. Releases Results of 2005 Online Advertising Study

Merchandising Very Important To Dealerships' Evolving Online Advertising Strategies reports 65 percent of dealerships have changed their purpose for advertising online with third-party providers in the past year, based on the category's improved ability to drive traffic and directly impact vehicle sales. In findings from's 2005 Dealer Advertising study, which were announced this morning at the 2005 National Automobile Dealers Association's (NADA) 88th Annual Convention and Exposition in New Orleans, dealerships noted improvements across third-party advertising services, from ease of use, to the traffic they produce and the sales they generate.

According to the study, driving traffic and reaching qualified buyers was the primary objective for advertising online with third-party services, but dealerships noted new ways of evaluating and measuring that traffic, including greater emphasis on generation of traffic to their Web sites and their showrooms. 85 percent track where traffic to their dealership Web site originates and report that more than half of all visits are generated by advertisements and vehicle listings on third-party sites. 83 percent track where walk-in traffic to their store originates, and attribute 39 percent of that traffic to listings on third-party services, such as

While most noted plans to spend more dollars online, many also discussed plans for advancing their dealership and vehicle merchandising practices online, rating online merchandising as very important to their evolving strategies. The study tracked dealerships' merchandising practices against's six Merchandising Must Do's; Pricing, Photos, Vehicle Descriptions, Inventory, Special Offers and Dealership Promotion.

Dealerships ranked the importance of key merchandising elements in line with consumers' information needs, rating photos, pricing, vehicle descriptions and inventory as the most important. These are the same elements consumers have consistently ranked highest when asked what they are looking for online. However, when asked about their proficiency in executing these elements online, there is a 30-point gap between perceived importance and their own ability to deliver these elements in online advertisements.

"While dealerships understand the importance of effective merchandising, they acknowledge there is still room for improvement in the implementation process," said Ralph Ebersole, director of training. " is committed to working with our dealers to close the gap. Through ongoing market trainings, hundreds of local representatives and continuous product improvements, we are partnering with our customers to help them get the most out of their online Internet investment."

The study showed dealerships are implementing effective strategies across each merchandising element. Key findings in each category include:

* Pricing: Dealerships are taking many approaches to pricing online. While most aim to be accurate and price competitively relative to their market, some use lowest price online as a market differentiator. 73 percent report that consumers look to negotiate price online and they handle follow-up in a variety of ways. Most look to move from e-mail to live conversations on the phone or on the showroom floor. Some dealerships use firm Internet pricing and a no-haggle approach.

* Photos: Dealerships rank photos as the most important merchandising element, and 83 percent agree that multiple photos drive high quality traffic. They value multiple photos that provide a combination of interior/exterior shots and show a variety of angles of the vehicle.

Half of those dealerships surveyed use multiple photo opportunities to promote their dealership by including signage in their vehicle shots, but few have yet to take advantage of multi-image space to insert their dealership logo or their sales contact's photo.

* Vehicle Descriptions: Dealerships are actively using vehicle descriptions to make their inventory stand out online. Four out of five dealers augment VIN exploder information with additional details.

* Inventory: Dealerships are paying close attention to their online inventory, updating vehicles several times a week or more. One-third of those surveyed update inventory at least daily. 95 percent check their inventory regularly for accuracy; 60 percent check weekly and 40 percent check daily. Most ensure accuracy by dedicating one person to manage the process. While dealerships rate their proficiency in posting online inventory above most other merchandising elements, they rate themselves the weakest in making inventory decisions based on consumer search and demand information.

* Special Offers: Most dealerships are not using third-party advertisements to promote special offers at the dealership, and are not taking advantage of special offers to track walk-in traffic. Those that use special offers to drive traffic from advertisements on third party sites primarily offer monetary incentives, but only half of those surveyed track and measure the effectiveness of those special offers.

* Dealership Promotion: While some dealerships still see online advertising as a means of promoting vehicles rather than their dealership, many are now using advertising on third-party sites to promote their dealership in some way, including dealership hours, slogans and awards. Fewer use third party sites to promote the entire dealership, such as parts and service.

"Ongoing attention to detail and alignment with consumers' information needs across these key merchandising elements will advance the Internet shopping process for consumers and will ultimately improve online advertising results for dealerships," said Ralph Ebersole, Director of Training. "Those dealerships that leverage online merchandising will differentiate their dealership and help consumers to decide where to buy."

Methodology: Frank N. Magid Associates, Inc., conducted research on behalf of Forty Executive Telefocus( interviews were conducted between January 4 and January 10, 2005, and lasted an average of thirty minutes each. Participants were randomly recruited from nationwide lists of medium and large dealerships. All respondents were customers with decision-making responsibility for online services. 15 percent of those surveyed were Dealer-owners and operators, 17 percent were general managers, 22 percent were sales managers and 42 percent were Internet managers.


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