Understanding The 3 Tiers of Automotive Dealership Advertising

Advertising Across Tier 1, Tier 2 and Tier 3 Focuses in the Auto Industry

The automotive industry is filled with complexities and intricacies that could only exist for one of the industries that drives most advertising expenditure across national, regional and local markets.

With such a large organization of brands and manufacturers, distribution channels and local dealerships, there has to be some guidance to keep things running smoothly, at least on paper.

Tier 1 — National Automotive Advertising

Tier 1 Automotive Advertising is focused from the manufacturers perspective and generally at a national level. This is generally seen from the brand’s stance — like GM, Ford, Chevrolet, Toyota, Honda, etc. — and is really about making the brand resonate as the car company of choice.

Simply put, Tier 1 Advertising’s goal is to make your general automotive decision as an <insert auto manufacturer brand> your vehicle of choice.

Tier 1 advertising is what supports Ford F-150 to become the #1 selling truck. Tier 1 advertising brings you the wildly popular Superbowl commercials that nearly all of the big car companies run each year.

Tier 2 — Regional Automotive Advertising

Tier 2 Advertising isn’t radically different than that of the national, Tier 1 focus but does have some intricacies to benefit the region.

Tier 2 Advertising is really just the regional advertising initiatives that auto brands use to connect with the local community. Really, the goal of Tier 2 advertising initiatives are so that <insert locality>’s Vehicle Buyers think of <insert car brand> as <insert locality>’s #1 vehicle option (i.e. Pittsburgh’s Truck Buyers chose Ford as their Pittsburgh truck option).

Regional, Tier 2 advertising often capitalizes on the regional scale (that over local, individualize advertising) but is more focused than a national buy. A lot of Tier 2 buys focus on regional infrastructure like TV Network buys over DMA’s, and even city-wide radio and billboard buys. Tier 2 decisions often lead to the promotion of local sports teams, from the sponsorship of the entire team to placement within the stadium or being a broadcast sponsor.

Some examples of Tier 2 advertising groups include Wester PA Chevy Dealers, Lexus Pittsburgh and Your Neighborhood Ford Store.

Tier 3 — Local Automotive Advertising

Tier 3 advertising puts a lot of the marketing effort onto the local dealership, to push buyers for the particular brand you offer as opposed to your competitor down the road offering the same brand.

It’s important to note that Tier 3 advertising is not just local advertising. It is advertising at a local level, for a local establishment (the dealership) specifically for the national manufacturer’s brand or vehicle.

Tier 3 advertising is generally driven by coop processes and requirements and is in effect to really support the national manufacturer, locally. These funds are provided to support local advertising coverage of that brand, in a way that a local dealership would be best at positioning in front of a local market.

Tier 3 advertising consists of:

• Local Publications
• Cable Advertising
• Billboards
• Direct Mail
• Digital Marketing

In recent years, digital marketing has taken center stage in most advertising, but even more so with Automotive Advertising and especially at the Tier 3 levels. Heavily focused on Programmatic Advertising, Paid Search Advertising and Social Media Advertising, Tier 3 automotive dealership advertising has sought to “own” paid media across the digital landscape.

Keeping Tier 3 Advertising, Tier 3 Focused

In order to best position these placements synergistically, and not against, Tier 2 and Tier 1 placements, there are a couple of digital marketing strategies that local dealers need to utilize:

Paid Search: Focused on buyer-intent keywords or buyer-intent behaviors over just broad matched vehicle or brand terms help dealerships better position themselves and get better ROI on advertising spend.

Social Media Advertising: Working with a local agency that has enough 1st Party data on vehicle purchase behavior and automotive buyer-intent helps to push through the lack of automotive targeting on social media (due to special ad categories). Empowering your dealership’s offline data for both targeting and tracking is one of the best ways to get more out of your social media advertising performance.

Programmatic Advertising: The programmatic advertising landscape is overly consumed by the dynamic display ads of Manufacture Preferred Vendors that feature the individual car dealership almost as an afterthought. Display ads are certainly powerful and dynamic retargeting is one of the better performing tactic lines, but ensure you’re using a vendor that can display these ads to feature something more in line with a Tier 3 ad, rather than a Tier 1 (use your dollars wisely after all). Leveraging other programmatic tactics like Video, Audio and OTT also provides media for dealerships to get in front of their market on. Programmatic means are where a dealership needs to ramp up reach and frequency, more so than action. Generally this is the lowest converting digital tactic.

Earned Media: Organic social media and search engine optimization are two other areas that are heavily supplied by Tier 1 or Tier 2, yet don’t help do the Tier 3 goal of differentiating your dealership against other same-brand dealers in your region (with most manufacturers using the same social and website vendors, it almost doesn’t even differentiate across different manufacturer brands!). Employing local, organic processes outside of the manufacturer provided system is extremely important to differentiate in SEO and social media management. Leverage what’s inside your dealership to develop powerful content or look outside of the “beaten” path.