A while back, my teammates looked into performance reports from various vendors and agencies, trying to assess the industry standard. I’d love to say we were surprised by the number of vanity metrics used by some agencies, but truth be told - it’s becoming more and more common to embellish reports with meaningless statistics, or manipulate data to imply positive results, especially when the performance is subpar.
Take online advertising for example. Most vendor reports consist of numerous data points, graphs, and charts. It’s easy to get lost in the midst of all these overwhelming stats, especially when the most flattering ones are usually front and center, distracting the reader from what’s really important.
Not all agencies use these tactics, but it’s a common enough practice that dealerships need to be more involved when it comes to their marketing efforts. This doesn’t necessarily mean all marketing activities need to be brought in-house, but rather that GMs, BDC managers, and other employees would benefit from familiarizing themselves with basic marketing concepts and lingo so that they can demand what they deserve from vendors, and get their money’s worth.
In this article, we’ll talk about online advertising, the different ways to assess the performance of an ad campaign, and which metrics matter most. But before we dive into best practices, let’s go over a few basic marketing terms:
When creating an ad campaign, one of the first things to think about is your marketing goals, or, in other words - what do you want people to do when they see your ads? There are many types of ad objectives, but the most common ones are impressions (how many people will see your ads), clicks (how many people will click on your ads), traffic (how many people will reach your website after clicking your ads), and conversions (an ambiguous term we’ll expand on later).
Optimization is the continuous process of adjusting certain aspects of ad campaigns to increase performance and align with the campaign’s objectives - this can be changed to the ad copy, the images used in the ads, the audiences targeted, etc.
Any time a prospect sees one of your ads (on search engines, social media or any other online platform), it’s considered an impression. This might seem like a great way to assess the performance of your ads, but in truth - advertising to a large audience is rarely useful, as many of the people viewing your ad may be irrelevant (are these hundreds of impressions looking to buy a car? Do they even have a license?) Impressions are the easiest metric to fall back on when nothing else works, so be wary if this stat is front and center.
‘Click-through rate’ is a metric that measures the percentage of clicks on a certain ad, out of the overall impressions (for instance, if an ad was seen 100 times and clicked on 20 times, the CTR would be 20%).
Generally, the higher the CTR, the better the ad campaign is performing, since it’s an indication the ad was targeted at a relevant, in-market audience. But high CTRs don’t necessarily lead to an increase in sales. In theory, many people can click on an ad, and yet none will end up converting and buying a car. Alternately, an ad can generate far fewer clicks but ultimately lead to more sales.
‘Cost per click’ is the average price you’re charged whenever someone clicks on your ad. A common misconception is that a lower CPC is always better, but quality clicks (that generate quality leads) generally cost more than clicks that get you nowhere.
Website traffic refers to the number of online users that visit your website at any given time. While it’s a common way to measure the effectiveness of an ad campaign, it isn’t necessarily the best metric to rely on if your goal is increasing sales.
‘Conversions’ is the most elusive metric, since each agency defines it differently. Some will consider any type of interaction on your website as a conversion, even if said interaction doesn’t generate a lead (these interactions can include reaching a certain VDP, interacting with chat, or clicking any type of button on your website). This is an easy way for vendors to embellish a marketing report, but you have to ask yourself if these interactions generate enough value for your dealership.
So, when it comes to online marketing - which objectives really matter? The answer to this question differs between industries, but when it comes to automotive - dealerships should concentrate first and foremost on advertising that increases sales. Any other objective falls somewhere between ‘nice to have to a waste of time and money.
Making sure your ad campaigns are geared towards sales can be done by connecting your CRM to your online advertising platforms. This way, you can measure which ads increase sales, and optimize accordingly. Not all agencies and vendors support CRM linking, as it requires more resources and high-end automation, but it’s definitely worth the effort.
If you can’t support CRM linking, the second most important objective to focus on is lead conversions (sometimes called “lead generation”). This means your ads are geared towards converting visitors into leads through fill forms on your website. Optimizing for leads is, yet again, more complicated than other objectives, as it requires more tracking and measuring and a connection between your ad platforms and the form fills on your website.
Impressions, clicks, and traffic are good supporting metrics, but they can’t be the only stats your vendors focus on. Getting people to see your ads, click them, and browse your website is nice, but we’re in the business of selling cars, and at the end of the day, optimizing for leads and sales is what will help you move metal faster.
So dealers - next time you’re wondering where those marketing dollars went, remember what really counts. Don’t let the vanity metrics slide, numbers stay embellished and demand what you deserve from vendors. Keeping them accountable one report at a time.
Ilana is an expert in sales, digital marketing, and business development. She is constantly thinking about how to perfect conversion funnels to build brand awareness. As Director of Marketing, Ilana works to engage audiences and expand market share. She contributes thought leadership for tech companies in and out of the automotive industry including Dealer Refresh, Dealer Marketing, and for the DrivingSales community blog.
Join our newsletter and get news in your inbox every week! We hate spam too, so no worries about this.