Auto Dealers Turning to New, More Effective Advertising Medium

Auto dealers throughout the US are increasingly turning to a new advertising method that provides significantly greater flexibility and effectiveness at a considerably lower cost. Watchfire’s LED signs have become the new advertising method of choice for many dealerships. Watchfire LED signs offer a flexible, dynamic advertising platform for dealerships to communicate with potential customers already at their doorstep.

With a struggling economy, dealerships have had to look for creative new ways to adapt and innovate to survive. The dealerships at the forefront of this movement have found that installing an outdoor LED sign at their location can provide a key competitive advantage. Bob Ruth Ford in Dillsburg, Pa. installed a Watchfire W-series 19mm LED sign and they are a just one of many examples of how dealerships are using their LED signs and the impact they have seen. “Our Watchfire LED sign allows us to showcase our daily, weekly and monthly specials, highlight our community activity and has increased our floor traffic,” explained Internet Manager Charlie Lyter.

Dealerships, like Bob Ruth Ford, have discovered that unlike other traditional advertising campaigns that can take weeks, if not months to produce and schedule, a Watchfire LED sign can create messages within a matter of minutes and display numerous messages throughout the day. Bill Cole Automall in Bluefield, W.Va. reported they use their Watchfire XVS 19mm LED sign “like a TV commercial,” according to Director of Marketing Mark Warner. He believes the sign is an important marketing tool because it allows the dealership to mirror events they advertise on TV. The dealership’s graphics department produces high-resolution video and animation. “We keep it updated so our customers feel like they are always seeing something new – they never see the same thing twice,” said Warner.

The flexibility of LED sign advertising offers a significant advantage to dealerships as traditional forms of  advertising, like TV commercials, are being seen by fewer and fewer people with the growing popularity of DVR and services like Netflix. Radio and newspaper ads have suffered a similar fate with the popularity of subscription radio services, like Sirius, and the decline of newspaper circulations. Dealerships, like Mike Pruitt Honda in Akron, Ohio, report they have been able to reduce their advertising budget for other mediums since installing their Watchfire XVS 19mm LED sign.

The ability to reduce their advertising budget is a significant advantage for a dealership because advertising is typically their third largest expense, trailing only payroll and rent.. On average, a dealership spends more than $600 on advertising for each new car on their lot. With new car sales down from 2000-2007 levels, it has been more critical than ever for dealerships to explore new advertising options. One of the many benefits of LED signs is their significantly lower cost per thousand impressions, or CPM. This measurement of an ad’s cost-effectiveness, calculated by dividing the cost of the advertisement by the number of people who will see it, is important for understanding an advertisement’s potential return on investment.

“Auto dealers are savvy marketers,” explained Watchfire’s Vice President On-Premise Sales Dave Warns, “They have done the research and can see that LED sign advertising gives them a way to communicate to a larger audience at a significantly lower cost than other traditional advertising mediums.” The highly visible location of most dealerships along busy streets or highways means higher traffic volume and more ad impressions. Warns added, “The average CPMs for newspaper, radio and TV advertisements are $3.47, $13.29 and $22.61, respectively. When amortized over five years, the CPM for a new LED sign can be as little as $0.74, which allows dealerships to spend less to reach more potential customers, and not just any customers, but ones already at their location.”

Warns went on to explain that the economic benefit of LED signs does not end with lower advertising costs. “Our customers typically see an increase in sales of at least 10-15% in the first year after installing a Watchfire LED sign. Even taking into account annual operating cost, a conservative 5% increase in sales would—in most cases—allow a dealership to pay for their entire LED sign purchase in just a few months. Beyond that point, future sales increases are money in the dealership’s pocket.” Bill Alexander Ford in Yuma, Az. is another example of a dealership that has seen an increase in traffic after installing a Watchfire XVS 19mm LED sign. They report frequently having customers walk into their dealership to ask about promotions that they have seen on their Watchfire 19mm XVS LED sign. Chief Financial Officer, Jeff Fritz, reported, “The sign is easy to use, and it’s a good way to announce different promotions. Overall, it adds value to our whole advertising program. There’s no question in my mind — our Watchfire sign purchase was definitely money well spent.”

Some dealerships even find that upgrading to an energy-efficient LED sign can help them save money on operating costs. Old bulb signs are notoriously expensive to run. High quality LED signs, like those offered by Watchfire, can provide significant savings for customers looking to upgrade, further improving their bottom line. Bill Cole Automall not only saw a significant decrease in operating costs, but also received a $42,000 rebate from Appalachian Electric Power for upgrading to a high efficiency Watchfire LED sign. “Our Watchfire sign is larger than our previous sign and costs $600 less a month to operate. We have a lot more control over the messaging, and it’s very easy to use,” explained Controller Eleanor Wescott.  

Long-Lewis Ford Lincoln’s two dealerships in Russellville, Ala. and Florence, Ala. have found they can further increase the return on investment of their Watchfire XVS 19mm LED signs by using them to advertise high-margin services the dealership offers. “We advertise cars, the rental car department, repair shop and the café,” said Customer & Employee Relations Manager Tricia Lane. The flexibility of LED sign advertising and the ability to display multiple messages throughout the day offers a significant opportunity to dealerships to advertise services and offers that customers may be unaware of like service department specials, customer loyalty programs, special financing opportunities and even to advertise specific vehicles. It is a strategy that has also worked well for Mike Pruitt Honda. Owner Mike Pruitt reported, “It seems any used vehicle we put up there gets sold.”

For dealerships looking for new ways to advertise and maximize their advertising dollars’ return on investment, Watchfire LED signs are a powerful communication tool. For dealerships interested in learning more about LED signs, Warns recommends contacting their local sign company. “An LED sign is a significant investment and we encourage auto dealers to take the time to learn about the products that are available on the market. We have built an extensive network of valued sign company partners that are available to educate and guide customers through the sign buying process.”

Warns added, “Before you purchase an LED sign, make sure you’ve asked the right questions – what kind of warranty does the manufacturer offer, what service can they provide, when is their service department available (especially if they are overseas), how long will it take to have repair parts shipped? An LED sign is only a powerful advertising tool if it works properly. A sign with persistent problems or one that doesn’t look good will leave your customers with a negative impression. And that can hurt your business instead of helping it. So before you buy, ask yourself what a lower price tag may cost you.”

Watchfire Signs manufactures a full line of electronic message centers. It is the only manufacturer that fully encapsulates every LED module in a thick bed of silicone gel, enabling the modules to operate reliably in any weather condition. Watchfire’s streamlined design enhances durability by minimizing the number of parts and connections, improving field performance and reliability. Watchfire message center signs feature lightweight, yet durable extruded aluminum cabinetry with precision-mitered corners, solid welds and stainless steel fasteners to deliver low-cost, fast installation and years of worry-free performance. Watchfire’s warranty, lead times, customer support and software are considered to be the best in the industry.

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