Nice Article on The Cobalt Group in Automotive News

JUST BETWEEN US

Satan's playground? The Web, of course


Automotive News | February 11, 2008 - 12:01 am EST

I met Satan on Monday. He's staying at the Regis Hotel. Seems like a nice fellow.

OK, I'm really talking about John Holt, CEO of the Cobalt Group. Holt helps dealers manage Web sites. He helps them get noticed when consumers Google for information. He makes sure the dealer's Web site reinforces the factory's marketing message. And he shows dealers how to respond to consumers' e-mail inquiries.

It's a lively little business — the Seattle company's revenues rose 25 percent last year to $170 million — but this isn't why he has earned Satan status.

Here's why: Holt helps dealers figure out how to allocate ad dollars more efficiently, and that often means more money for the Web and less for newspapers. As a veteran print journalist, it pains me to foresee the day when the typical dealer spends little or nothing on newspaper ads. If that happens, newspapers will be in deep trouble.

"The day may come when print newspapers go away," Satan predicts.

But Holt is on to something. Dealers now spend about 30 percent of their ad dollars on newspaper ads and about 5 percent on Web marketing. Over the next few years, we'll see a full-scale effort by dealers to measure the effectiveness of advertising more precisely.

That is something Web advertising can do — and when it happens, newspapers won't be the only losers.

"TV is toast, and radio, too," Holt predicts.

Holt doesn't advise dealers to eliminate newspaper ads. But if we are headed into a recession — and I think we are — dealers are going scour every nickel of expense in search of waste. So keep your eye on Satan. Someday soon you may require his services.

David Sedgwick is editor of Automotive News.