4 reasons that the FTC’s crackdown on dishonest car ads is good for dealers.

Andrew Park blogposts, Compliance 0 Comments

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Many Dealers aren’t sure how to react to the FTC’s crackdown “Operation Ruse Control.” Are you sweating yet?  No need to run off and change your shirt, just adjust your approach.

On March 26th of this year, the Federal Trade Commission announced “Operation Ruse Control,” their nationwide crackdown on deceptive automotive advertising.  The program is comprehensive in trying to bring an end to dishonest advertising practices including low-ball liquidation cash prices, balloon payments, and unclear or unreasonable disclosures. With the FTC’s oversight continually growing in the automotive industry, the days of inherently dishonest car ads are coming to a grinding halt.

Many whom are heavily invested in their ad campaigns may have some concerns with the new, more stringent oversight of the Commission.  However, the FTC’s crackdown is a net positive for all advertising dealers and here are the 4 reasons why.

1.  Long-term Credibility

Forcing transparency on dealers heavily invested in their advertising can easily mean long-term positive PR.  A dealership’s ability to deliver on their ads is a crucial component in building long-term credibility in continual ad campaigns.  It is especially important in today’s world where bad customer experiences translate to bad reviews and negative posts on social media.

There has always been a tendency for some dealers to want to push a little too far into deceptive territory. It may be to get quick results or it may be to stay on par with their competitor’s offers.  Deceptive ads ultimately weaken a dealer’s reputation.  The FTC’s program inherently strengthens a dealer’s credibility.

2.  An opportunity to build a powerful brand

Credibility helps reinforce a dealer’s brand.  A strong, properly branded dealership will have their brand and campaigns reinforced by their customers and their customer’s positive experiences.  Consumer based credibility plus a marketing team branding a dealership in the right way can create powerful, long-term growth and sales.

3.  Continued sales (loyalty and retention)

Transparency breeds positive customer experiences which in turn breeds repeat customers and service business.  Let’s say a customer views a captivating ad, reads positive reviews online and then decides to go in and ends up having a positive buying experience. There is a much greater chance that this customer will bring this dealer continued business in service and sales than if they had felt deceived by an ad campaign.

The service department can be the backbone of a dealership, evening out low periods and often surpassing the margins from new car sales.  Credibility based on customer satisfaction and good branding leads to more service appointments.

4.  The elimination of cheaters

As mentioned before, one of the reasons that dealers often decide to run deceptive campaigns is to keep up with their competition.  Keeping up with competitors unreasonable offers is no longer necessary. Now, it is far more likely that any dealer running an ad with a deceptive offer has a greater chance of citation.

This is great news for dealers who have considered running more transparent and honest ad campaigns, but feared that they wouldn’t generate enough traffic.  A well-produced campaign within the boundaries of the FTC’s regulations will still bring the floor traffic, except now a dealer won’t have to make an unreasonable offer to get it.  A dealer and agency can move their focus more to urgency, creative and long-term branding.

In closing

“Operation Ruse Control,” promises to be very beneficial for dealers who are invested in their advertising and partnered with a brand focused team.  Inherently dishonest car ads are a thing of the past.  The FTC operation is a wakeup call for more modern marketing methods focused on the customer experience and long term engagement.

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