Don’t Question Where Your Budget Gets Wasted. Just Don’t Waste Budget.

By | December 4, 2018 | Automotive Marketing

What Is the Blog About?

Many dealerships are not fully embracing programmatic, so it’s important to have a complete understanding of this new channel and the ways it bests traditional media.

Why Should You Read It?

You may not realize the potential of programmatic and the ways in which it creates efficiencies that traditional media simply cannot.

How Are We Going to Help You?

We have a full breakdown, including examples that compare different channels, that equips you with a robust education on all things programmatic.

 

Before we answer the question that brought you here, let’s recap what makes traditional media wasteful.

The Limitations

Traditional media targets people outside your market’s most profitable areas. It can’t target shoppers by actual behaviors, which means it can’t answer the following:

  • What questions are they asking?
  • What conversion actions have they taken?
  • What are they doing on social media?

The Process

Indexing is hard: You need to calculate the percentage of the total audience in your market that matches your target audience. That percentage becomes an Index of 100.

If 20% of your total market matches your defined audience, any channel also with a 20% match receives an index of 100. That means:

  • A channel with a 10% match has an index of 50.
  • A channel with a 30% match has an index of 150.
  • And so on.

Even though your index consists of 20% of the total population and you may have channels that have up to 50% or 60% of a matched audience, you’re not paying for just those shoppers.

You’re paying for 100% of the audience. There are thousands of irrelevant people your ad dollars are used to reach. So the cost per thousand impressions (CPM) you negotiated with each network is not your actual CPM when accounting for that wasted spend.

Why Programmatic Media Is Your Solution to Wasted Spend

Programmatic advertising uses software and automation to buy ad space in real time that targets a highly specific audience. A few programmatic channels include video pre-roll, social media, and Pandora.

With a programmatic approach, there is no difference between the total channel audience and the total target audience reached. They’re the same thing. That means you can allocate every single dollar toward your target audience.

Geographic Targeting

You can target your dealership’s specific sales areas so you don’t have to pay for reach or impressions from people beyond the radius of shoppers who are likely to buy. The scope of your reach depends on how large your market is and the history of where your dealership’s buyers have traveled from — or any competitor’s market that you want to allocate some money for conquesting.

Audience Targeting

Just as with traditional media buying, programmatic ads lets you define an audience by characteristics like gender, household income, age, level of education, relationship status, and many others. The difference is that your spend goes exclusively to shoppers who fit within your target, so there is no waste.

Targeting Not Available for Traditional Media

Even though it’s important to focus much of your efforts on geographic and demographic audience targeting, programmatic advertising gives you the power to tailor the audience beyond those qualifiers.

Retargeting

Users will engage with your digital assets, such as your website. The visit drops cookies into their browser, which provides opportunities for programmatic buying within a large network of ad placement as they continue to engage with online content.

Behavioral

Users will take actions that demonstrate they are a likely buyer. This includes search history, websites visited, conversion actions that are taken, products viewed, and actions on social media channels.

Cross-Device

Users don’t use a single medium. They use their desktop, phones, and/or tablets at various times or stages of research. Programmatic ads can reach them regardless of the device.

Contextual

Users perform specific searches by typing queries into a search engine. This gives context for what their actual intent is: Are they exploring for more information, moderately interested and wanting to look at inventory, or highly motivated to buy and reading reviews?

Programmatic Advertising in Practice

Here’s an example to help clarify how programmatic ad buying eliminates waste:

You’re a Subaru dealership.

You’ve created your targeted audience with four qualifiers:

  • Demographics
  • Interests, habits, and activities
  • Active online searches
  • Interactions with your brand or in-market conversion actions

You’re considering whether to spend on television or video pre-roll.

You’re located in a midsize market. There are 1,000,000 people in the TV market. Your target audience includes:

  • High school graduate
  • Homeowner
  • Likes the outdoors
  • Visits national or state parks
  • Searches for “Subaru,” “hatchback,” and competing brands

A chart that breaks down the differences in cost and efficiencies between traditional and digital marketing.

When only 25% of the TV market is your targeted audience, you greatly reduce the impact of every dollar. After accounting for all the wasted spends, you’re essentially paying $60 cost-per-thousand impressions of your target audience.

With programmatic advertising, you fulfill the potential of every dollar because 100% of your spend reaches your targeted audience. That keeps the cost per thousand impressions of your target audience at $15.

Since the average consumer sees 10,000 branded messages per day, shoppers may need to see your ad multiple times before the message sticks.

Let’s take your Subaru dealership’s cost per thousand impressions to reach your target audience and apply it to a spend of $10,000.

How can you increase the number of times that car shoppers see your ad? A chart that shows the different value of television and programmatic

The benefits of programmatic channels are clear:

  • Better targeting
  • No wasted spend
  • Much higher frequency
  • No more budget needed

You can generate remarkable brand awareness and market stimulus by moving from traditional media to programmatic channels. This will also help prepare you for the eventual transition of “television” and “radio” to a more programmatic platform via apps and other advanced means of connecting with audiences.

If you want specific insights about programmatic for your dealership or to better understand the potential value of your website and digital marketing strategies, you can contact us today.

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