The average American spends nearly 24 hours a week online. Additionally, the daily time spent on social media worldwide amounts to 145 minutes per day. With consumers spending more and more time online, it is little wonder that businesses are taking notice and adjusting marketing strategies and ad spend accordingly.
For dealerships, having an online presence is about more than simply building an online showroom and gathering leads via a website form. It is about dominating every single channel, from Google search to social media.
However, dealerships face a particularly difficult battle when it comes to marketing their services and products online. Historically, ad spend has been extremely high for dealerships, making it challenging to expand reach without a large budget to spend.
If your dealership wants to increase your digital presence while lowering your ad spend, you can implement some key strategies. By lowering ad spend without sacrificing your reach, you can free up valuable marketing dollars to invest in other important areas of your business.
Additionally, when you optimize your ad spend, you can begin to outpace your competition, allowing you to gain higher amounts of revenue from the same marketing dollars.
Take a Look at Your Ads
If your dealership is running paid media ads, such as Facebook Ads and Google Display Ads, start your journey with an analysis of existing ads.
By starting with a deep dive into your existing strategy, you can begin to target common weaknesses that plague many dealerships.
What Are You Spending?
First, determine what your budget spend is on your ad campaigns. If you run your ads yourself, hop into each channel’s dashboard and pull the numbers. If an agency runs your ads, ask for detailed reporting on the past three months of spend.
Take note of not only what your total spend has been on ads but also on exactly where your money is being spent. This can help you home in on the areas where ad spend is highest and return is lowest.
Make key notes on the channels where you see the biggest drain and highest spend on leads.
What Is Your Messaging?
In some cases, the high cost of ad conversions is due to the content within your ads. Take notice of what your message is across channels. Are you consistent in branding? Are your ads clear?
If you haven’t done so yet, head over to Google’s Ad Preview tool and take a look at how your ads show up. Additionally, if you are running social ads, use Facebook’s Ad Library to see how your ads stack up against the competition.
Look for areas where your ads might be weak, and see if any of these observations match the areas where you noticed a high drain of ad spend above.
Who Are You Targeting?
A key to optimizing your ad strategy is to have a targeted approach to your audience segmentation. Rather than simply running an ad for a broad area and hoping it reaches the right people, you should use your existing data sets to inform your ad campaigns. Many dealers miss out on ad spend optimization because of skipping this step.
A great way to improve your audience targeting is to upload your DMS customer list. By implementing your customer list, you will be able to create audience segments and target your ads in a more meaningful manner.
For example, you should have a completely different strategy for marketing to your previous customers than to people who are just searching keywords online.
Additionally, your own customer list will help you recognize where you should increase your current marketing radius. While you might only target new customers within a nearby radius, you don’t want to exclude existing customers who fall outside of this radius.
By taking a deep look at your current target audience, you might be able to find some quick areas for improvement.
What Channels Are You Using?
Another important key in optimizing your ad spend is to look at what channels you are using to market to existing and potential clients. If your list is missing any of the following, it could be worth it to shift some of your marketing spend to reach a larger audience:
- Google Ads: Google Ads display after someone searches for a keyword or phrase via Google. For example, if you were to type BMW repairs into Google, the first listings might contain the word “Ad” to the side of the listing. These are ads businesses paid to display.
- Google Display Network: Google Display Network is an effective platform for retargeting. If you have ever searched for a product via Google and later felt that an ad for that same product was following you around the internet, this ad was likely placed via Google Display Network.
- YouTube: As of 2019, more than 500 hours of video were uploaded to YouTube every minute, making this an extremely powerful marketing tool. Here, you can pay to display video ads between viewers’ streaming choices.
- Facebook: As of the second quarter of 2020, Facebook has more than 2.7 billion monthly active users. Implementing a Facebook Ad campaign is a must for dealerships wishing to increase their digital reach.
Implement Intelligent Bidding
One of the number one reasons why dealerships waste ad spend is because they are not implementing intelligent bidding.
For every ad campaign you run, you should be using intelligent bidding to ensure you are optimizing your spend while increasing your reach. This is one of the most powerful methods for lowering your spend without sacrificing your online presence.
If you run your own ads, start using the following key strategies to bid more intelligently. If an agency is running your ads, take these key talking points to your next meeting with the team.
Ongoing Bid Changes
The easiest way to waste money on ad spend is to set a campaign, walk away, and return in a month.
Campaign bidding should be adjusted on a daily, weekly, and monthly basis. By constantly adapting according to the data you are seeing, you can improve your spend dramatically.
For example, over a month’s time, you might waste hundreds of dollars on a poorly performing ad. Conversely, if you were to notice over the course of a week that a particular ad was not doing well, you could lower your spend on that ad and increase it on another. By the end of the month, this can translate to huge savings while also improving your reach.
Consider all the Key Factors
Not only should bidding be adjusted on an ongoing basis, but it should also be adjusted based on a few critical factors.
The following should all be part of your intelligent bidding strategy:
- Location-based adjustments: While you might market to a wide radius, you should constantly adjust how much you are spending by location each day, week, and month. Changing your bidding based on location allows you to take over a market where you see that your competition is weak. Additionally, you might increase your spend one week to be higher in an area where your competition is outpacing you. Later, when you take back market share in that radius, you can lower the dollar spend.
- Device-based adjustments: Ad spend can also be adjusted based on the device where the ad is being displayed. Some ads will perform better on desktop search, while others will be ideal for mobile or tablets. Constantly adjust your bid spend based on what devices your campaign is best at targeting.
- Inventory-based adjustments: Inventory should play a role in your ad spend. If you only have three new Toyota Tundras in stock, you will likely want to lower your ad spend on that make and model until you have more ready to sell. Additionally, be sure you break your budget down to the specific make and model level, allowing you to better optimize this spend over the course of a month.
- Customer type adjustments: Marketing to an existing customer is a completely different game than marketing to a potential new client or a customer you are trying to win from a competitor. Make sure you have segmented audience lists and that you adjust your spend each week depending on your focus.
- Radius adjustments: One of the reasons it is critically important to upload your DMS customer list is because this allows you to change your bid radius based on where existing customers are located. For example, you might only be promoting oil changes to the neighborhoods nearby your dealership for standard keyword searches. However, if you know you have a customer who has recently purchased a vehicle from you outside of that radius, you will want to adjust your bid strategy to include that segment in the ad reach.
Adapt to Competition
Intelligent bidding is also important because it allows you to adapt to what your competition is doing. One of the key benefits of digital marketing over traditional marketing methods is that you can adjust your strategy in real time.
If your competition is stealing customers from a specific area, then you might need to adjust your bidding for a bit to win back that customer base.
You might increase your spend in one area to ensure you retain important customers, and later, when you see the strategy working, you might once again be able to lower your spend.
Pay attention to what your competition is doing, and constantly adjust your strategy accordingly.
While it is necessary to adjust ad spend every day, it is also important to step back and look at the bigger picture.
Each quarter, spend time analyzing your ad spend. Where were you successful? Where did you hemorrhage money?
A quarterly analysis can help you understand larger trends that might be taking place in your area. This can help you enter each quarter with a more intelligent strategy.
Learn More About Accelerating Your Digital Presence
If you are interested in learning more about how you can lower your dealership’s ad spend while increasing your digital presence, we invite you to replay a webinar we recently released — Digital Domination for Dealers.
In this webinar, we cover helpful marketing strategies. From how to retarget your competitor’s website visitors to information on pulling important competitor analysis reports, this webinar takes a deep dive into all things digital marketing.
Additionally, if you are interested in learning more about how our agency can assist you in creating a more strategic approach to your ad spend, reach out. We will be more than happy to discuss your strategy and help you target areas for improvement. With years of experience in the industry, our goal is to empower your dealership to make the most of the power of digital marketing.