Optimize Your Digital Spend—Maximize Your First Party Leads

In today’s economic climate, it’s important that the budget you determine for online marketing is allocated properly. That means putting your money into cost-effective first party leads—this is, your own website—rather than more expensive third party leads.


Here are two realities the automotive industry is going to have to live with for some time to come:


·         The landscape is going to get more competitive and we’re all going to have to continually search for more innovative ways to generate leads.


·         The age of traditional media being king is over.


One need look no further than the state of the newspaper business—with Denver’s Rocky Mountain News shutting down and the San Francisco Chronicle contemplating following suit—to see that advertising has changed forever. The writing is on the wall and it’s clearly not written in newsprint.


Where smart money is being spent


As you know by now, the smartest, most cost-effective marketing dollars you can spend are in interactive media, like SEM and SEO, backed by a content-rich, intelligently designed website. These techniques generate more leads, ensure greater accountability, and allow you to track your ROI to an extent that print, radio, and TV never could. So if you’re smart, you’ve been reallocating your marketing budget from traditional media to digital media. And if national sales figures are any indication, you’re far from alone. But that may not be enough. Because the fact is that not all digital media buys are the same, not even close. So in a world where ROI is everything, the question you need to be asking yourself is, “Is my digital media budget being spent as intelligently as it could be?”


The great debate—first-party vs. third-party


Many dealerships looking to get into the game have taken the path of least resistance and have hired a third-party lead generator to drive traffic to the sites, the logic being that this is what they do best and when it comes to the internet, the smartest thing you can do is trust the experts. And the truth is, using third-party lead generators is a better option than print. But is it the best option? That depends on how closely you look at how third-party lead generators go about their business and how much you trust your own capabilities.


First, think about how third-party lead generators create leads for you. They bid on keywords in your market, they create SEM campaigns, then they sell you the leads. Sounds great, right? But wait a minute. That sounds a lot like what dealers do who are generating their own leads. In fact, it’s exactly the same. The only difference is that if you did it yourself you could be doing it far more cost effectively.Here are the facts: third-party lead generators don’t do anything different than you could be doing on your own. On the contrary, they’re actually paying more to generate the same results that you could be generating, and intercepting traffic that should be yours to begin with. Who pays for that cost difference? You, of course. It’s all part of your sales contract. What it comes down to is that you’re paying someone else to steal leads from you. Not the best business model.


In contrast, think about leads generated by your own internet marketing efforts, otherwise known as first-party leads. Because you’re only working in a single market—your own—you can be much more targeted, and can potentially dominate all the other third-party lead generators at a fraction of the cost they’re paying. Also, because a first-party lead comes directly from your listing, potential customers naturally already feel a connection to your dealership from the outset. This is why first-party leads tend to close at rates that are astronomically higher than third-party leads. And finally, remember that because you’re not paying a commission or a mark-up for services you could easily be performing on your own, first-party leads tend to cost far less, usually about three to four dollars per lead, as opposed to upwards of $20 for a third-party lead.


Mike DeCecco is the director of industry relations for Dealer.com. Please visit www.dealer.com for more information.




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