Eighty-six percent of consumers use the Internet to look for local businesses, according to research from Nielsen, and that extends to buying a car. Many consumers find researching car purchases online overwhelming, especially when using the big search engines, and even third-party websites are deemed much the same.

At the same time, car dealerships want to retain the timeliness and targeting capability of print classifieds. Enter LocalConnect from Autobytel which enables car dealers already using their MyRide search function to display ads on their site. Ads can be targeted by region, promotion dates and make/model and contain rich media presentations and calls to action.

“Clearly, consumers are turning to the Internet, and away from newspaper classifieds, to make their vehicle purchasing decisions,” said Jim Riesenbach, Autobytel president and CEO in an earlier announcement. “With LocalConnect, dealers can easily market their weekly specials to in-market car shoppers in their local area with far greater specificity and at a fraction of the cost of traditional advertising.”

Out of Autobytel’s 3,700 or so U.S. dealer franchises only 10, including Asbury Automotive and Van Tuyl Group, Inc., have signed up for LocalConnect

Getting local dealers to put more money towards this type of online advertising remains a challenge. "Eighty to 90 percent of our total [ad revenue] is still national," said Riesenbach, who believes the challenge is to convince local dealers to get on board with online geo-targeting. "It's still very early."

The findings pointed to a rise in the use of various online media including rich, social and search engine optimization.

In particular, more video content will feature on auto dealerships’ websites. Currently, just 33% of auto dealerships include video content and this, according to The Kelsey Group’s research, will rise to 59% during the next 12 months.

Similarly, auto dealerships’ use of consumer reviews and ratings will rise from 29% to 43% and social networking from 15% to 33%.

“These findings point to a significant disruption in the auto dealer advertising space,” said Neal Polachek, CEO of The Kelsey Group. “There are valuable opportunities for traditional and new media companies that tune into dealers’ adoption of Web 2.0 technologies and align with dealers’ online media-buying intentions.”

Also evident from the research was that the number of dealerships employing staff specifically to run online activity is on the rise, with 9% of the dealerships surveyed having an Internet manager or similar.

That is a return on investment of more than $33.80 for auto retailers.

“Direct marketing plays a key role in the economic vitality of the automotive industry,” DMA Senior Research Manager Anne Frankel said. “DMA and Global Insight measure 52 industry verticals in their direct marketing econometric model. Compared with all other measured verticals, automotive retailers/service stations have the highest ROI and the largest annual direct marketing-driven sales volume.”

The majority of the direct marketing campaigns are geared toward consumers with more than three-quarters of direct mailings aimed at buyers. During the third quarter Toyota, Ford, Chrysler and Dodge sent the most direct mailings.

The report predicts that by 2012 auto retailers will spend more than $9 billion on direct marketing efforts and will see their revenue from those ad dollars reach $108 billion. That is a slight decrease in ROI to about $33.67.

The best way to convert via direct mailing is to include an offer - a percentage or dollar amount off or some kind of free offer.