A Pathway to Save Money on Advertising Costs for Every Car Sold
Dealerships spend more on digital marketing than ever before. As reported in NADA’s 2017 Annual Financial Profile of America’s Franchised New-Car Dealers, 55.4% of a dealer’s advertising spend is on the Internet.
Yet, the advertising cost per car sold has remained largely unchanged:
- $762 per new luxury vehicle sold
- $630 per mass-market vehicle sold
This demonstrates that too many dealers have internal teams or partner with agencies who aren’t implementing strategic digital marketing plans.
Your Advertising Cost Per Car Sold Should Drop with Digital
Let’s look at the digital channels where you’ve invested more than half of your advertising costs.
Your Website: The Land of No Competitors
Okay, let’s dive into the details.
Your dealership’s website is the only place where car shoppers won’t see or engage with your competitors.
So it’s important for you to build a site that satisfies local consumer searches, focusing on keywords that indicate a strong motivation to buy (e.g. “for sale”). When those keywords are part of a user search, the engines, like Google and Bing, deliver a list of websites that can provide answers.
You can use tools like Search Console and Google Ads (formerly AdWords) to know what those searches are.
- Search Console helps you see what organic searches are getting the clicks to your site, impressions on the results page, and your average position.
- Google Ads tells you which ad groups create the most conversions.
When you effectively use these tools, you’ll take up more real estate on a search engine’s results pages and push competitors down in the rankings. So, you need to marry your website’s content with car shoppers’ intent, prioritizing content creation by search volume, your rank in the results for the search, and relevance to your dealership’s business objectives.
With the right pages built around keywords that match shopping intent, you can focus on delivering a better user experience. Providing easy navigation, limited pop-ups, and clear calls-to-action lessen the workload for a car shopper to get where he or she wants to go.
User experience starts the moment car shoppers hit your homepage, which should streamline their ability to get to your highly valued SRPs — and you can perform an audit to see how effectively your homepage accomplishes that.
You, of course, could not track, measure, and benchmark traffic or conversion data without Google Analytics. It’s your foundation for every digital marketing strategy that you’ll implement.
Despite that, you could be saying, “Reunion, the headline was about how to save money on advertising costs-per-car sold, not just make more money by making more sales from leads that digital marketing delivers.”
You’re right. In addition to converting more shoppers into leads, your website can save you money on your paid search campaigns:
Making your landing pages relevant to your SEM ads can save you money on every single click.
Paid Search: Where Quality Affects Cost
Now here’s an in-depth explanation.
Paid search is one of the best drivers of lead generation in digital marketing. In order to make your ad campaigns as successful as possible, you need to make sure of a few things:
- You should have hundreds of keywords …
- That create hundreds of ads …
- Comprising dozens of ad groups.
Meeting these criteria will ensure that you satisfy a variety of car shopper searches, which creates ad relevance. And ad relevance is one factor that helps build a better Quality Score (QS). So why do we need to worry about QS?
Ad Rank is where you’re listed in the ads that sit above organic search results. So, the way to lower your bid price while maintaining a high Ad Rank is to increase your QS. In fact, a QS of 3 pays nearly twice as much as a QS of 6.
So, we said relevance is one factor. What are the other factors that build a better Quality Score?
This Score is affected by your clickthrough rate, historical Google Ads account performance, and relevance of your landing pages, keywords, and ad text. It’s not know how much each factor “weighs,” but we do not that CTR is the most important.
If you don’t know what your SEM campaign’s Quality Score is, you need to find out. Imagine the dollars saved if your QS sits at a 3 or 4 and could be raised to a 6 or 7 — maximizing your spend by doubling the power of each dollar.
You don’t stop at Quality Score. Right now, the automotive industry’s average paid search click-through rate (CTR) is 4%. By focusing on crafting original ads and using all of your applicable extensions, you can dramatically increase how many shoppers click on your ads.
(Bonus Insight: The higher Ad Rank you can maintain, the more likely your extensions will show up. That means you’ll potentially push competitors off the screen without scrolling.)
Social Media: A Channel to Target Exactly Who You Want
You want to cast a wide net to stimulate interest. At the same time, you want to precisely target consumers likely to buy from your dealership based on a variety of factors.
In marketing, your only option to accomplish both is through social media advertisements on Facebook. You can utilize their internal targeting and your CRM data.
Facebook’s Internal Targeting
The ability to target on Facebook is divided into three categories:
- Car Shopper Qualities
- e.g. demographics, interests
- Custom Audiences
- e.g. look-alike audience
- e.g. radius, zip codes
Your dealership has collected emails for years. This organically grown list can be leveraged across channels but is particularly effective on Facebook.
First, you can segment out your potential buyers who came to the dealership but did not make a purchase. When you import it to Facebook, it filters out all invalid emails to gift you a new connection to these buyers via advertisements. When you couple this with good creative concepts, you can significantly increase your CTR.
Best of all, Facebook advertising is a fraction of the cost of television, radio, mailers, and other traditional methods.
Next, you can take all of your contacts and import them to create a look-alike audience (referenced above). When Facebook does its filtering, it examines the interests, demographics, and other features of the valid contact, then sets up an audience that mirrors them. And you deliver creative advertisements to that audience.
Reinforcing the Moral of the Digital Story
If you’re investing in digital marketing strategies, the savings are there — if your marketing vendor knows how to appropriately structure and execute them.
After creating a great website that helps maximize the investment of your paid search spend, you’ll be able to:
- Drive more qualified traffic, get more leads, and sell more cars (without spending more).
- Work on raising your Quality Score to save dollars on every single click across hundreds of ads.
- Leverage your CRM and internal targeting, which are both free, to start working on brand awareness.
- Create stimulus and awareness around your brand and inventory to push consumers through the mid-funnel at a fraction of television and radio costs.