How To Create More Efficiency In Your Advertising Strategy
While a showroom may be full of shoppers and potential leads, dealers shouldn’t cast their advertising to the side. The market for consumers is ever evolving in not only issues but in competition. It is pertinent for dealers to grasp as well as implement several key advertising strategies to continue a successful business.
Whether it's shifting advertising spending to help with inventory instead of customer acquisition or figuring out what merchandise is no longer in demand, these advertising strategies are affected heavily by the financial practices of a company. Dealers need to be conscious of their spending if they wish to successfully implement advertising strategies, especially as digital advertising prices continue to increase.
How To Combat Price Volatility
Advertisements are one of the most effective ways to reach consumers in the current trend of high media exposure. The demand is high and the cost of ads across retail-focused channels is expensive. Recent evidence supports these claims as reports show a spending increase of 60% on paid search, 41% on paid social channels, 34% on the average cost-per-click (CPC), and 41% on CPM prices for paid social.
Such inflation, measured from last year to the second quarter of 2021, has happened over a short period. Often unaware of such statistics, dealers continue to obliviously spend the routine amount on advertising instead of efficiently eliminating wasteful spending.
More commonplace than expected hundreds if not thousands of dealers across the country deal with the lack of knowledge and the unsuspecting trap of advertisement cost.
Reducing Wasteful Media Expenditures
To be a profitable dealership, it is key to reduce advertising waste. Currently, it is estimated that around $13.4 billion on digital advertising will be spent by the automotive industry. Out of approximately 13.4 billion, 40% of digital advertising will be ineffective due to the wrong strategy, bad data, or both.
The solution is to leverage advanced advertising data and marketing technology from leading providers such as PureCars. Dealers can take full advantage by distinguishing the best vehicle to aggressively market, the best target audience to cater toward and the best media channels to reach that target audience. With tactics such as these, dealers can focus on the goal of optimizing the lowest cost per sale and RO, instead of vanity metrics such as cost per click and impression volume.
Similar to true e-commerce retailers, dealers can market with attention to target cost per sale as well as available inventory. If there is inventory available and the cost per sale targets are accurate, marketing budgets are unlimited! Overall, dealers are at an advantage if they can successfully create a predictable cost per sale, demand, conversion path and inventory to sell!
Making The Right Marketing Decisions
Dealers can leverage advanced data and marketing technology to help them make the most suitable marketing decisions when it comes to selling or servicing new and used cars. Moreover, it can be used to properly identify and acquire properly used vehicle opportunities. In either case, however the technology is used, dealers have the resource to maximize profits.
Dealers can also utilize this technology to determine if a new vehicle in inventory needs more or less marketing attention as well as the most appropriate media mix models. The proper identification or adjustment of something as simple as a media mix can open a dealer up to millions of dollars in efficiency and profitability.
Now, more progressive dealers are thinking creatively of new ways to source used cars at a premium in auctions or by buying directly from consumers in their vicinity. Both approaches have become an attractive way to build customer relationships and outpace competitors’ vehicle acquisition in a sustainable way.
Leveraging Data for Better Payments & Offers
Dealers, along with their lender and manufacturer partners all need to be seamlessly tied together in a comprehensive system necessary to build, offer and transact. They’re now leveraging solutions from companies like Market Scan that mines, analyzes, and manages the billions of combinations and iterations of all lender and manufacturer programs available in the marketplace and finds truly superior, scientifically perfect solutions for all stakeholders: consumers, dealers, lenders, and manufacturers.
Furthermore, today’s best and most comprehensive solutions enhance the consumer experience and the showroom process by electronically presenting all payment and purchase options to customers with full compliance and transparency – on any computer, tablet, or mobile device – at any/all points along the consumer’s shopping journey. As a result, the process can dramatically shorten transaction times, raise dealership efficiencies and margins, and elevate customer satisfaction as a result of a more streamlined process.
The market for consumers will always evolve. To stay current, successful dealers are leveraging a more scientific approach with the help of marking technologies to better align their strategies to retailers who have mastered digital advertising and payment solutions.
John Sternal is a Partner and Director of PR & Social Media at Merit Mile, where he oversees strategic client programs for PR, social media, and communications research. He has been writing about the automotive industry since 2005 and has more than 25 years of experience in building brands and creating brand awareness through PR, communications, and media strategy.View full profile