Each week, the AutoSuccess Podcast invites automotive industry leaders to present ideas, tips, and strategies for sales success via podcast. This week, Thomas Williams sat down with LotLinx founder and Executive Chairman, Len Short, to discuss the changing face of social media and online advertising for dealerships.
Dealer advertising is ever-evolving from dealers experimenting with new strategies on a trial & error basis. As they improve, they keep only what works. Because online advertising has proven to be an effective form of marketing, dealers have moved the majority of their ad spend to digital.
As digital spending has grown, however, so has waste. As industry research has shown that the ideal amount of traffic to drive inventory turn is 30 VDP views per VIN, much of a dealer’s digital ad spend is being wasted on driving a “landslide” of traffic to a handful of VINS on the lot. A successful digital marketing plan involves a diversified spend amongst traffic sources, with the goal of all spending to be driving the right amount of traffic to each individual VIN on the lot.
Here are 6 essential takeaways from Len’s Podcast:
1. Maintain diversity.
Digital advertising is like buying stocks. You wouldn’t invest all of your money in one stock, would you? A successful investor would know that a portfolio needs to be diversified with different investments, each with its own calculated return. Just as an investor shouldn’t “pick stocks” by investing in only one, dealers would be ill-advised to put all of their money towards a single advertising platform.
2. Timing is everything.
Dealers don’t need to be selecting media placement. What will work best is to focus on buying actions and moments – getting the right message to the right person at the right time. With paid search, for example, dealers need to put money towards AdWords in order to capture the attention of shoppers in the discovery stage. As a potential car buyer begins their journey to purchase, they start searching on Google for car dealers in their area – and this is an important moment for dealers to buy. In contrast, once that shopper has decided on the car that they wish to purchase, entering the decision phase of their journey, they are not searching Google for the year, make, model. Shoppers go to more specialized vertical sites once they reach a purchase decision, and this is where dealers need to make sure they have budget left over to spend. These high-value moments when an in-market shopper searches for the year, make, and model of a vehicle are going to drive the best conversions to a VDP page. LotLinx is able to reach these low-funnel shoppers for dealers by applying our Deeplinking™ technology to highly optimized ad platforms like automotive inventory search sites, automotive review sites, and Facebook.
3. Shopper intent trumps behavior.
While many dealers have tried Facebook or worked with a vendor of Facebook advertising, few have experienced consistently valuable results, because the audience targeting is still based on behavior. This is great for some industries where similar people purchase similar products, but not so much for automotive. Think of it this way – do you drive the same car as your neighbor? Probably not. Although you may be behaviorally similar, your vehicle preferences differ. LotLinx has developed a technology that identifies shopper intent, and this core targeting is then layered over Facebook’s behavioral targeting to provide much stronger conversions.
4. Turn is the key to profitability.
With cars costing an average of $26/day to carry, they need the attention that will have the highest impact on turn. Getting your inventory’s VINs to that magic number of 30 VDP views requires a dealer to facilitate a Facebook strategy that works into their digital advertising plan. The biggest mistake being made on Facebook is buying a “landslide” of VDP views from a vendor who isn’t targeting specific VINs.
5. Beware of bundles!
Most agencies are just using some form of Facebook’s behavioral targeting and repackaging it to the dealers. You don’t need to be paying for a “bundle” that marks up costs. LotLinx allows dealers to buy Facebook media directly and pay only for the use of our proprietary technology, which a digital strategist implements. In fact, every dealer that uses LotLinx Deeplinking™ for Facebook gets their own dedicated digital strategist to manage their account.
6. Don’t just “set and forget.”
Your digital advertising needs to be actively managed. Keep this in mind for vendors as well. How often are you talking to vendors about your digital marketing ad spend? LotLinx digital strategists will discuss results however frequently the dealer needs – whether it’s daily or quarterly.
Because digital marketing is changing so rapidly, dealers can use these 6 tips to proceed with caution, pick the right partners, and evolve into better advertisers.