Optimizing ad spend for dealerships
There’s a simple truth when it comes to dealership marketing: You will not see sustained long-term growth in car purchases if you are depending only on walk-ins, large advertising banners, radio ads or television commercials. Lead generation is different for marketing strategy targeted towards digital natives. The battle for your customers will not be won with grand gestures, but with customer micro-moments and touchpoints.
According to Google, on average, customers engage in over 900 digital interactions with a dealership before they make a purchase. On average, car buyers are conducting 139 Google searches while researching their next purchase (here’s a guide to rising in Google search results. And of those who spend their time researching online, 71 percent are researching car prices, while 68 percent are finding actual cars listed for sale. 22 percent of automotive internet shoppers use social media for research when shopping for a new vehicle. On the other hand, 76 percent of location-based searches result in a business visit within a day.
If you are beginning to deploy a marketing attribution strategy, or if you need to update your current approach, take some time to review the tools and techniques you should be using:
1. Attribution modeling
Attribution modeling is the practice of analyzing which touchpoints receive credit for a conversion. Once you’ve assigned values to the marketing touchpoints that are driving conversions, you then need to develop a systematized way to implement these values.
2. First-Touch VS Last-Touch Attribution
‘First-Touch’ and ‘Last-Touch’ are two of the most well-known attribution models. For first-touch, the credit of the conversion is assigned to the first marketing touchpoint between a user and your dealership. For last-touch, credit is given to the action that directly precedes the purchase or conversion.
3. Google Analytics
To truly get the most out of your marketing attribution strategies, Google Analytics is a must-have tool for your dealership, with features including acquisition tracking, goal-setting, and a comparison tool for multiple attribution models.
4. Measuring ROI
Before you begin the marketing attribution process, it’s crucial to measure your marketing ROI. It’s almost impossible to assign values to your marketing channels without first understanding the returns they are bringing to your dealership. Pay attention to your marketing budget, and track all the expenses involved in executing your marketing plans.
5. Call Tracking
Call tracking, using software like CallRail, is a holistic attribution method for tracking inbound calls and form submissions, along with built-in attribution modeling.
Strategic digital marketing for the automotive industry
What does a successful online ad campaign consider for an auto dealership? Once you’re comfortable with the tools that optimize your attribution and know how to rise in Google search results, it’s time to refine your content marketing strategy. Maybe auto dealerships are moving away from the traditional jingle and banner, but Facebook ads, social media, and email marketing can bring brand awareness to your target audience.
Auto shoppers engage in over 900 digital interactions with a dealership before they make a purchase, so make sure that you are the auto dealership in mind when it’s time to buy. Brand awareness is especially important to auto dealerships, because potential customers often distrust the stereotypical used car salesman. Positive relationships with potential customers can be built through digital marketing.
Trust is incredibly important to auto dealerships. As far back as 1994, potential customers were clamoring for more transparency and simplicity from the industry. In fact, the now defunct Saturn became the 3rd best-selling car model in 1994, largely due to its simplified retail experience (i.e. no price negotiating).
Beyond just serving as a platform for purchase or information, web design influences customer psychology. Two thirds of adults claimed that website design influences their trust in a company. A user-friendly and effective website can contribute greatly towards your auto lead generation goals. SurveyMonkey found that only 18 percent of survey respondents had ‘a great deal’ or ‘a lot’ of trust in a company that did not have a website on top of social media accounts. The website should also reflect sophisticated branding.
Continuously updating your online presence is important as shoppers look online. When 92% of consumers visiting a retailer website for the first time aren’t there to buy, make sure that yours invites them back. If you’re engaged in email marketing, let them know when you have promotionals and make it easy to get involved.
However, lead generation can only be driven in the right direction with attribution, otherwise you’re wasting money.
The importance of attribution for auto dealerships
Attribution can provide efficiency gains between 15 and 30 percent, so if you aren’t utilizing tools to track the strength of your ad campaigns, you’re leaving money on the table. A reported 84 percent of marketers say associating conversion events with marketing is very important to the growth of their business, but only 10 percent of marketers believe they have a strong capability to do so.
Strategic marketing may be more important for the automotive industry than any other. Car shoppers take time to deliberate on their purchases. Dealers can expect to pay anywhere from $350 to $500 in advertising and lead-acquisition per car sold — a significantly higher up-front cost than most other industries.
When buying PPC ads on Google Ads, auto dealers can also now purchase specialized placements that are designed to be more robust for an automotive PPC campaign: Model Automotive and Dealer Automotive Ads. Google reports that Model Automotive and Dealer Automotive ads show 30 percent greater engagement rates over regular ads. Toyota’s US branch took these new formats for a test drive and saw a 45 percent increase in conversions, along with a 30 percent decrease in Cost Per Click.
When purchasing customer journeys, it’s important not only to focus on your content marketing but also to optimize your budget. By focusing your ad spend where it matters most, you can improve ROI and attract potential customers while growing your business.
What is ROI?
ROI, or return on investment, ensures that you’re putting your budget in the right place. There are three main reasons why analysis of your automotive marketing ROI is crucial to your overall business strategy:
- Compare your performance to competitors: There are a variety of software tools out there that reveal what your competitors are spending on marketing, as well as their ROI. Understanding your own ROI gives you a standard through which you can compare your performance to your competitors’.
- Gain a deeper understanding of your marketing spend: Regardless of whether you think a marketing campaign or strategy is a good idea, your boss cares about the amount of revenue created from your marketing spending. Knowing your automotive marketing ROI means you can better justify your budget.
- Learn how to better leverage touchpoints: If your marketing touchpoints and organic content are not leading to conversions, then it’s time to re-evaluate your strategy. A deep analysis of your ROI will ensure you’re only investing in high-value marketing channels and touchpoints that consistently drive conversions.
Ultimately, understanding your ROI keeps both you and your team accountable. It can also aid with setting goals and selecting the right KPIs to track, which in turn helps you get better at tracking, analyzing, and improving your marketing.
How to analyze your automotive marketing ROI & enhance attribution
ROI analysis allows you to attach values to your various marketing channels, depending on the revenue these channels are generating for your dealership. Call tracking is a great way to properly attribute leads (here are four ways to measure ROI with call tracking).
However, an in-depth calculation of your ROI will provide you with a more accurate view of a marketing channel’s real value and influence.
(Sales growth – Marketing Cost) / Marketing Cost = Marketing ROI
Determining your revenue and plugging in numbers to this equation is the easy part; knowing exactly what figures to include is where the challenge begins. This is why it’s critical to track every single dollar you spend on advertising and marketing campaigns.
So while promotional emails may drive customers to your inventory pages, a retargeted paid ad may actually lead to more purchases.
On the other hand, you may find that a marketing channel is successful at getting your customers from the ‘interest’ to the ‘decision’ stage of the customer journey, but it is eating up most of your budget. In cases like this, careful ROI analysis may reveal a more cost-effective way to accomplish your goals, while also optimizing your ad spend and sharpening your keyword research for better SEO results.