As dealerships try to recover from the effects of coronavirus restrictions, data is becoming more crucial than ever, particularly when it comes to marketing. Having clear visibility on your business’ digital metrics empowers you with the knowledge of which advertising is and isn’t working, therefore allowing you to spend your budget more wisely at a time when every dollar counts.
As we are well aware, digital advertising is an ever-changing beast. Just when we think we understand it, something changes and we need to re-educate ourselves. Back in the early days of Facebook Advertising all focus was on click throughs and impressions (how many people can we get our ads in front of). Today however, such measures are deemed merely “vanity metrics” with emphasis now being firmly placed on quality of engagement over quantity.
You decide to run a sale event at your dealership. You spend thousands of dollars on advertising, promoting the event to every man and his dog – enticing visitors to your showroom with promises of free food, activities for the kids and celebrity appearances.
When the big day arrives, you get hundreds of people through your doors – taking advantage of what’s on offer. Your sales staff however, are dealing with patrons who are not currently in-market for a vehicle and occupying the time they should be spending with genuine buyers.
How would you rate the success of this campaign?
If you were counting the foot traffic, the number of sausages eaten or the happy smiling faces, you’d say that your event had been a roaring success. Your bottom line, however, would tell a different story. The fact is, you would have spent a lot of money, for little return.
Parallels can be drawn between this scenario and digital advertising. Some dealerships spend thousands of dollars on, for example, social ad campaigns aimed at very broad audiences with generic messaging. Their goal is to get their advertising in front of as many people as possible, based on the theory that the more times their ad is displayed (impressions), the more likely they are to get click-throughs to their website and in turn, the more sales they think they will get.
The issue is that the impressions and click-through rates for these campaigns, are like the people who attended the event – no matter how many of them come, a high percentage of them are merely there to kick tyres.
Instead, digital advertising needs a more targeted approach if it’s to have a significant impact on your revenue, with focus placed on engagement levels and, most importantly, conversions.
We had a client run a campaign for their service department where, against our advice, they provided us with their full, unfiltered databases for targeting. Although this campaign delivered over 100,000 impressions, they had a low number of conversions which resulted in minimal service bookings and a high cost-per-conversion. This is due to the fact that their scattergun approach was reaching customers who weren’t even due to service their vehicle, so had no reason to convert.
Conversely, when our clients deliver an enticing message in their advertising, and run more refined targeting to in-market customers over a longer period of time, their return on investment is far greater.
The same client ran a separate, well-targeted website click campaign for their service department on Facebook. Advertising the right message to customers who were actually due to service their vehicles delivered about half the number of impressions of the previous campaign, however, gave them 250 percent more conversions. This resulted in an 80 percent drop in their cost per conversion, and a far larger number of service bookings.
This goes to show that, if you target the right customers at the right time, with the right message – even if there aren’t huge numbers of them – your business is going to have far greater advertising success than if you merely focus on the quantity of people who are going to see your ad.
So, in the current climate, our advice is simple – for the best return on investment on your social media advertising and search engine marketing, you need to give up on the scattergun approach of the past and focus on investing both time and money in targeting in-market customers. In doing this, you will notice a decrease in your impression and click rates because you will have less “timewasters” seeing your ads. However, you will see an increase in your online conversions and sales because you will be reaching a more refined group of legitimate prospective customers who are actually likely to purchase a car from you.
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