Industry Voices

Get 30 in 30 to Maximize Marketing ROI

Industry Voices, Len Short

Chicago- May 17, 2016

Even with the array of technologies that drive traffic to dealer websites, an average of more than $600 is spent on marketing each new car sold. The problem isn’t digital marketing doesn’t drive views, it’s that it doesn’t provide the right distribution of views.

len-shortToday’s car shoppers do most of their research and decision-making long before they ever get to a lot.  In fact, a 2014 report by research firm McKinsey & Company found the average number of customer visits to dealers before buying a car has dropped from up to five to just one for some brands in some geographies over the past 10 years.  With the bulk of the path to purchase happening online, an effective digital marketing strategy is imperative to a car dealer’s success.  But even with the array of technologies that drive traffic to dealer websites and lots, dealers still spend an average of more than $600 on marketing each new car sold and those cars aren’t necessarily moving off the lot any faster.  The problem isn’t that digital marketing doesn’t drive views; it’s that it doesn’t provide the right distribution of views.  In fact, few cars in dealer inventory get the “magic” 30 VIN views, identified in CDK Global’s 2009 study as the sales lift benchmark.  According to LotLinx data, a quarter of a dealer’s inventory gets nearly 80% of all views. The bottom 50% of inventory gets a cumulative 7.4% of VIN views. This is even more surprising when you consider this doesn’t include inventory that gets absolutely zero views.

Of course, with an average carrying cost of $26 per day per vehicle, it’s not much help to a dealer’s margins if it takes 90 days to reach 30 views.  Just as there’s a “magic” number of views to sell a car, there’s a specific time period during which the dealer should get those views for optimal results. LotLinx research has shown this ideal “velocity” for 30 views is 30 days.  As you can see in the real-world example below, this ʼ16 Honda Accord got 26 VDP views and moved in 34 days. Meanwhile, another ʼ16 Accord had only 12 VDP views and spent more than double the time on lot (74 days).  What happens if the ʼ16 Accord gets more than 30 views? Not much. Even quadrupling VDP views only resulted in 25 days on lot compared with 34.

In order to show the impact days on lot can have on a dealer’s business, we looked into one particular market, Kansas City, and compared average days on lot for the fastest dealership against the average for that city.

As you can see from the chart below, 149 cars sold at an average of 18 days on lot compared with 89 days on lot results in a staggering difference of $275,054 per month in carrying costs.

These examples show that much of a dealer’s inventory remains “under-engaged,” which can obliterate margins, because every day a car is on the lot costs money. Additionally, with pay-per-click, dealers need to think about the expense of cars that are are “over-engaged.” For example, this Corvette:

The dealer VDP has gotten 720 views through PPC SEM in 60 days. This clearly is well outside the “30 views in 30 days” formula that should drive a sale. However the car is still on the lot and the dealer has spent $2,100-plus for “leads” that most likely are just aspirational views.  Ultimately, the lesson for dealers is that, as efficient and cost-effective as digital marketing can be, it also leaves gaps. What car dealers need to do is to focus on optimizing views across their inventory in the right amount of time.

Here are a few steps dealers can take to sure their search strategy is working toward the magic “30 views in 30 days:”

  • Monitor your VIN views to see if you have a distribution problem.
  • Create custom campaigns to address underserved VINs.
  • Leverage third-party advertising that drives clicks directly to the VDP on your site.
  • Use advanced analytics to set goals and track visitor engagement on your site.
  • Shift ad spend to the sources of traffic that are sending you the most engaged shoppers.

The car business today is strong, yet also is difficult and competitive with tightly-squeezed margins.  By increasing turn rates and focusing ad spend on the most effective channels, dealers can increase their share of earnings every day on every vehicle, giving them the resources needed to grow and scale their businesses.

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Len Short is the founder of LotLinx, a digital marketing company based in Chicago that helps dealers reach over 63 million unique car shoppers per month across more than 500 digital properties. For more information, visit