Notifications & Messages

Jared Hamilton
From: Jared Hamilton
Hey - It’s time to join the thousands of other dealer professionals on DrivingSales. Create an account so you can get full access to the articles, discussions and people that are shaping the future of the automotive industry.
×
Industry Press Releases

Industry Press Releases Industry Press Releases

Exclusive Blog Posts

What 89% of salespeople are failing to do...

What 89% of salespeople are failing to do...

  According to Dale Carnegie only 11% of salespeople ask for referrals. We all know how valuable referrals are but when it comes time to ask for a …

Why Your Online Shoppers Don’t Take the Bait

Why Your Online Shoppers Don’t Take the Bait

You think you’re dangling an enticing lure in front of your customers’ eyes. You plan to set the hook and reel them in. But what you don&rs…

Click-to-Call [Infographic]

Click-to-Call [Infographic]

  Most dealers understand the importance of making it easy for customers and prospects to find contact information. Websites often have prominent &…

Quick Tips for Improving Dealership Culture

Quick Tips for Improving Dealership Culture

Car dealers have a terrible reputation. It's such a negative experience for so many that people are electing to make a major purchase like a vehicle fr…

The Biggest Mistake Dealers Make When It Comes to Customer Retention

The Biggest Mistake Dealers Make When It Comes to Customer Retention

Jim Roche is the Divisional VP of Marketing & Managed Services at Xtime. We asked him to tell us the biggest mistake he sees dealers making today when …

Automatic Data Processing Inc., facing an auto dealer computing market beset by a 13 percent drop in U.S. dealerships over the past two years, said today it has agreed to buy digital marketing company Cobalt Group Inc. for about $400 million in cash.

“Acquisitions that complement our core businesses are a key part of ADP's five-point strategic growth program,” ADP CEO Gary Butler said in a statement today. He said the deal is expected to close within six weeks.

The companies said the combination would improve automotive retailing for consumers, manufacturers and dealers.

“For over 15 years, Cobalt's mission has been to enable [manufacturers] and dealers to work together to use the Internet to influence prospects as they move from product awareness to purchase and provide more timely services to existing owners,” Cobalt CEO John Holt said in a statement.

“By combining our offerings with ADP, we will be even better positioned to carry this mission forward.”

Cutthroat competition

Analysts said the acquisition will increase ADP's presence in the dealer Web marketing business as dealers and automakers increasingly rely on the Internet.

In the U.S. dealer management and Web marketing businesses, ADP competes with Reynolds and Reynolds Co., DealerTrack Holdings Inc. and Dealer.com, among others.

ADP's move is crucial because it must rely on the expanding Web marketing business to make up for the stagnant dealership management systems business. After the 2009 bankruptcy reorganizations of General Motors Co. and Chrysler Group, the number of U.S. light-vehicle dealerships plunged from 21,461 in 2008 to 18,607 at the beginning of this year, according to the Automotive News Data Center.

By acquiring Cobalt and its Web expertise, ADP “further strengthens its position against archrival Reynolds and Reynolds,” said Dave Nathanson, a consultant and managing director of QMA-AMI Management in Middleton, Wis.

The demand for digital marketing services from U.S. dealerships “has gone almost crazy over the last two to three years, and the Internet side has been coming up since the mid-'90s,” said Mike Seaton, an analyst and president of United Kingdom-based Woods and Seaton Ltd. “It is the area where there is major growth.”

Seaton said the business is not just lead generation. “It is lead enhancement, managing how dealers operate their Web sites, better quality leads and handling them better and increased conversion levels.”

Privately held Cobalt is based in Seattle. ADP's dealer services unit is in suburban Chicago. The parent company, based in Roseland, N.J., provides a variety of business services, including human resources and payroll systems.

The deal still must be approved by U.S. regulators.

You can reach Diana T. Kurylko at dkurylko@crain.com.

 

 Unlock all of the community & features  Join Now