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Solving the Automotive Digital Marketing Puzzle

Part 1 of the 3 part series

As a kid, I remember it taking me about an hour and a half to solve the original Rubik’s cube.  It was deductive “if-then” reasoning that got me through that task then and still guides me today. Although, I admit it sometimes takes me longer than an hour and a half to solve some of today’s automotive digital marketing puzzles. (wink, wink)

I think we can all agree that all advertising messages are going to inspire online research.  Depending on which study you read this morning, consumers are visiting 18-24 online touch-points prior to making a purchase.  How do you influence them during their online journey? How do you become part of their consideration set? Let’s examine one of the greatest digital marketing challenges dealers face today; Budgets.  All dealers I work with have a limited budget; therefore the efficiency of spend is critical to produce the highest ROI. More important than “how much” you should spend is how and where you allocate your digital marketing dollars.  Most dealers I speak to mistakenly distribute these dollars evenly among the traditional sales funnel opportunity and their inventory mix.


Sales Opportunity.  The typical sales funnel is comprised of three sections and the search parameters are different for each category. Consumers at the top of the funnel are considered “Researchers.” This category is defined as people starting their broad search for a vehicle. New vs. Used? SUV vs. Minivan, Brand vs. Brand, etc.  The middle of the funnel is comprised of “browsers.” This category is defined of people who typically have narrowed their search to a specific condition, make & model (plus competitive set) and GEO (location). The smallest part, or bottom of the typical funnel, is the “buyer.” This consumer is ready to purchase and is now comparing offers, incentives and dealers. With a limited budget in mind, would you evenly distribute dollars towards each category, knowing that there is one category that has a higher conversion rate?


Inventory.  If you were back in the 90’s where every dealer spent ten thousand dollars for a full page newspaper ad, what vehicles would you need to place in the ad to get people into the showroom?  You wouldn’t advertise low inventory, high demand, or poorly merchandised vehicles, would you?  So why would you digitally advertise them now?  If you have a high demand vehicle, i.e. a new BMW i8, or used Range Rover, you wouldn’t need to spend one dollar in advertising because they are hard to find vehicles and the consumer will find you. You certainly wouldn’t need to share budgets equally with core vehicles. How about if you had one new Honda Fit in stock and two hundred Honda Accords, would you equally share the advertising budget amongst each model?

What if you just took in a vehicle in trade, and it hasn’t gone through recon or detail, would you put it on the showroom floor next to a ninety day old same vehicle?

If you’re looking to provide a higher ROI and create a more efficient digital marketing spend, I recommend you focus on your stocked inventory of core vehicles that have the highest probability of reaching the low funnel buyer who is typing in the exact search terms for that vehicle.  Then work backwards to distribute budgets from the bottom of the sales funnel, upwards.

Next month, Part 2, will examine several other challenges including “Round Radius Deficiency,” Google’s limitations and KPI’s.

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