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In 1995, nearly all dealer marketing dollars were spent with local vendors. Local newspapers, shopper magazines, radio stations, TV broadcasters, and cable companies enjoyed a fair amount of autonomy from parent companies and very little competition from national companies like Autobytel and AutoTrader.com.
The vast majority of national vendors went into business to gain penetration and sell out. Getting bought out by a larger company is the dominant exit strategy for these national companies. Yet they serve local dealers who sell vehicles in a tiny sliver of the national market and hope to do so for generations to come.
The recent wave of vendor consolidation is but a small spec of what is yet to come if vendors' dreams are to come true. But who will be left, and how will they be received. Any vendor that gains a large share of the budget gets demonized by a portion of the dealer community (e.g. ADP, Reynolds and Reynolds, AutoTrader.com). Many dealers are afraid to place too much of their budget with one or two companies. But it could get worse. The prospect of being limited to a hand full of vendors forced on them by manufacturers is enough to make some dealers leave the business. Yet synergies among all three tiers of advertising must develop.
More than marketing hangs in the balance. You can't have a five-year plan unless you have some idea what the environment looks like in five years. The answers may change the structure of stores, dealer groups, and the relationships between dealers and OEMs.