Do You Know The True Value Of Your Ad Spend?

Many dealers make advertising budget decisions based on what they believe has or hasn’t worked for them in the past.

Automotive dealers have well and truly embraced digital advertising in the last few years. The medium has grown so significantly that most high-performing dealerships are investing thousands of dollars or ringgit in media every month to have their adverts appear on all the major platforms such as Facebook, Google, and YouTube.

However, how many of those dealers know and understand the true value of their advertising spend? Are they aware of whether it resulted in vehicle sales? Did it deliver a worthwhile return on investment?

Most dealers tend to go on “gut feel” when it comes to their advertising results and make decisions about their budgets based on what they believe has or hasn’t worked for them in the past. This, however, is far from an exact science and is not the most effective way to run a business.

Our industry experience has shown that dealers who introduce leads matching into their campaign analyses are better able to understand which of their advertising is generating test drives and sales. This, in turn, empowers them to make more informed decisions about how they allocate their budgets – particularly during high spend periods such as the end of the financial year. Taking this one step further, by establishing an auto-feed of test drive and sales data into their marketing platform and matching it to their leads, some dealers are even making campaign decisions mid-month, enabling them to reallocate budgets toward advertising that is driving better results, and avoid unnecessary wastage.

Case Study

One of our dealership clients was spending SGD $2,000 per month on search engine marketing (SEM), however, they didn’t feel as though it was delivering the return that it should. Although their reporting showed that the campaign was receiving a good rate of clicks and phone calls, their gut feeling was that these weren’t turning into vehicle sales.

Our team undertook a full audit of the campaign, confirming that all the website enquiries and phone calls the dealership was receiving were feeding into their marketing platform. We also ensured that the system was identifying the source of each of the enquiries and where relevant, attributing them to the SEM campaign.

The final stage of our audit involved implementing an automatic feed of their sold vehicle data into their marketing platform. This allowed the dealership to match up, in real-time, each lead, the advertising channel it had originated from, and whether it had resulted in a sale.

What they discovered was that contrary to their gut feeling, they were in fact receiving 8-15 vehicle sales from their SEM campaign each month at a cost of SGD $133-$250 per vehicle sold – and these figures didn’t even account for walk-ins that had not enquired prior to visiting the showroom but may have seen the campaign.

So, instead of cancelling their search engine marketing campaign, this dealership has decided to significantly increase their AdWords spend in the subsequent months.

Leads matching is fast becoming an industry essential as dealers become savvier about the way they spend their advertising budgets. The technology around it also quickly developing, with some marketing platforms now automatically integrating with other dealership data systems, allowing users to see in real-time, how many test drives and sales their campaigns are generating. This information then gives dealers the ability to make adjustments to budgets mid-campaign, depending on the level of success throughout the month, instead of having to wait for their end-of-month results.

Our advice to dealers is, regardless of the type of campaigns they are running, to make decisions based on fact rather than guesswork.

Don’t wait until the end of the campaign period to find out whether your advertising budget provided the desired results. Instead, work with a marketing partner who can deliver tools and reporting that show you, in real-time, exactly how your advertising is performing on the ground, so that you can make adjustments throughout the campaign, to maximise your chances of success and get the most value for money.