Digital Dealer - March 2020 - 36

MARKETING & ADVERTISING

Ad Spend

By
Jim Boldebook
Founder,
CBC Automotive Marketing

Marketing for Profit!

>

When I surveyed dealers at the end
of 2019, these were the two comments I heard frequently: 1) "We've
got to get our marketing/advertising costs in line!" 2) "Advertising
expenditures are eating us alive!" Virtually
every dealer and GM I spoke with had a
shared sentiment that marketing spend
has spiraled out of control during the past
several years, eating dramatically into EBITDA. Not only in terms of actual spend but
as an increasing percentage of gross due to
increased industry pressure on grosses as
well as labor costs.
In 2007, many dealers I interviewed reported overall marketing costs between 15
and 20% of total front and back gross. Those
same dealers say it's now well over 25%.
Here are some thoughts on the 'battle of
the bucks' with one of the biggest lineitems:
„ Make a budget and stick with it!

There must be a hundred salespeople at
your door, on the phone or in your email,
vying for a piece of your profit pie with
a promise of guaranteed attribution. No
matter which accounts you expense it to,
these costs come out of the advertising/
promotion category. No advertising or sales
gambit is so critically important that it can't
wait a month or two or even a year. Don't
make hasty changes adding dollars to the
budget that will do nothing more than drag
down profitability. Get a solid game plan,
and stick with it for at least a full quarter.
„ Have a conversation with all of
your team members on ad spend. Ask

the salespeople, the service drive and office
personnel for feedback. Don't just rely on
'metrics' pitches from folks trying to sell
you something. Remember, every marketplace is different. Your ADI (area of dominant influence) may vary differ dramatically
from national, even regional key influencers, especially if you are on the outskirts of
a major metro.
„ Do your research. Your dealership
should be conducting at least a one-page
media habits survey or interview at the time

36

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of purchase. The highest quality accuracy
return on this research is within hours of
actual delivery. With every passing hour,
accuracy and response diminish. We can
no longer count on, "What brought you
in today?" We have to get buyers sharing
actual media habits to best determine the
hierarchy of influence.
„ Balance your 'deal' messaging with
brand messaging. Branding builds famil-

iarity and trust (think Carvana). When was
the last time you saw this company hawking
a price or a payment on TV? Carvana is
using broadcast effectively, promoting
volume, convenience, guarantee, trade appraisals, and delivery. What is your unique
marketing message? What do you better
than anyone else in your marketplace? Why
aren't you spending time talking to potential buyers with that message?
„ Send more emails, but do it the right
way! Emails are powerful tools, especial-

ly when your company is a trusted name
(branding). And when your message is
timely, personal, and relative, email effectiveness increases. Twilio SendGrid just
announced a benchmark study that outlines
what elements impact a recipient's choice
to open and click, as well as what frustrates
recipients, and makes them memorable.
„ Buy broadcast... radio & TV! Several dealers have told me they abandoned
broadcast in favor of all digital and are
now returning to a balance. If you are truly
interested in increasing your profitability,
keep in mind that the lowest grosses are
produced by the highest digitally inclined
shopper. Customers that have spent half
their lifetime researching pricing, incentives, and availability are often willing to
drive 100 miles to negotiate a deal down to
a tissue. If you're only interested in selling
the absolute highest number of vehicles at
the lowest possible gross, spend 100% of
your money on the internet. A customer
that is within 15 miles of your dealership,
who has previously purchased from you,
who is likely to tether to your service
department, and is comfortable with your

brand reputation, is most likely the customer that will let you earn enough money
to pay the floor plan, a sales commission,
and maybe a few dollars of profit. Two
dealers that I spoke with in my survey,
both high volume, highly profitable dealers, have stopped soliciting out-of-state
business in their advertising.
„ Hire better. Train better. Profitability (gross) increases when the right
salespeople get the best training for
customer-centric relationships. If you
don't have the right people and the best
training, shift some of your advertising
dollars to training until you do. Reams
of research demonstrate that a customer
will knowingly spend 'a little more' if they
are treated right, feel that you really want
their business, get the information they
are seeking, and are happy with the overall
sales process.
„ Hire the best used car manager
money can buy. A good used manager

raises both new and used grosses by knowing what a vehicle is truly worth in your
particular market. Too often, a dealership
will put too much into a trade because the
computer metrics say its right. There are a
lot of overpriced sleds out there that will
ultimately end up at the auction as a loss
because of 'computerized metrics.'
„ Advertise used vehicle specials on
Facebook Marketplace. Many dealers

are getting great results with the medium,
especially with unique vehicles. It's quick,
it's cheap, and those ads get seen by the
folks in your backyard zip codes.
„ Spit shine your website. Ensure
your website is user-friendly, up-to-date,
and easily navigable so that users can
find advertised specials, directions, and
contact information. Chat windows are
losing ground because they are too impersonal, so display your telephone number,
address, and email prominently on the
homepage. And optimize for mobile too. A
map finder/direction button is a great tool
to have so that one-click leads them right
to your door.

March 2020


http://www.digitaldealer.com

Digital Dealer - March 2020

Table of Contents for the Digital Edition of Digital Dealer - March 2020

Digital Dealer - March 2020
Up to Speed|Tech, Dealer News, & People on the Move
Culture Three Tips to Improve Retention
Strategic Planning Strategic Planning for Sustainable Future
Leadership Five Lessons From Fearless Female Leaders
Spend Management Best Practices to Reduce Costs & Drive Profit
Fixed Operations What to Charge? How About a Little More Big Boss
Buy/sell a Generational Shift Is Boosting Buy/sell Activity
Meet the Speaker|q&a With Marketing Mastermind Phillip Stutts
Exclusive Interview With Jay Feldman of Feldman Automotive Group
Social Media q&a With Facebook
Speaker/session Spotlight|a Quick Look
Social Media Social Media Spring Cleaning
Ad Spend Marketing for Profit!
Cpo Toyota Led Record Cpo Growth
Fixed Ops Every Service Department Should Have a Salesperson Running It!
Fixed Operations
Digital Dealer - March 2020 - Digital Dealer - March 2020
Digital Dealer - March 2020 - Cover2
Digital Dealer - March 2020 - 1
Digital Dealer - March 2020 - 2
Digital Dealer - March 2020 - 3
Digital Dealer - March 2020 - 4
Digital Dealer - March 2020 - 5
Digital Dealer - March 2020 - Up to Speed|Tech, Dealer News, & People on the Move
Digital Dealer - March 2020 - 7
Digital Dealer - March 2020 - Culture Three Tips to Improve Retention
Digital Dealer - March 2020 - 9
Digital Dealer - March 2020 - Fixed Operations
Digital Dealer - March 2020 - 11
Digital Dealer - March 2020 - Leadership Five Lessons From Fearless Female Leaders
Digital Dealer - March 2020 - 13
Digital Dealer - March 2020 - Spend Management Best Practices to Reduce Costs & Drive Profit
Digital Dealer - March 2020 - 15
Digital Dealer - March 2020 - Fixed Operations What to Charge? How About a Little More Big Boss
Digital Dealer - March 2020 - 17
Digital Dealer - March 2020 - Buy/sell a Generational Shift Is Boosting Buy/sell Activity
Digital Dealer - March 2020 - Meet the Speaker|q&a With Marketing Mastermind Phillip Stutts
Digital Dealer - March 2020 - 20
Digital Dealer - March 2020 - 21
Digital Dealer - March 2020 - Exclusive Interview With Jay Feldman of Feldman Automotive Group
Digital Dealer - March 2020 - 23
Digital Dealer - March 2020 - 24
Digital Dealer - March 2020 - 25
Digital Dealer - March 2020 - 26
Digital Dealer - March 2020 - 27
Digital Dealer - March 2020 - Social Media q&a With Facebook
Digital Dealer - March 2020 - 29
Digital Dealer - March 2020 - Speaker/session Spotlight|a Quick Look
Digital Dealer - March 2020 - 31
Digital Dealer - March 2020 - 32
Digital Dealer - March 2020 - 33
Digital Dealer - March 2020 - Social Media Social Media Spring Cleaning
Digital Dealer - March 2020 - 35
Digital Dealer - March 2020 - Ad Spend Marketing for Profit!
Digital Dealer - March 2020 - 37
Digital Dealer - March 2020 - Cpo Toyota Led Record Cpo Growth
Digital Dealer - March 2020 - Fixed Ops Every Service Department Should Have a Salesperson Running It!
Digital Dealer - March 2020 - 40
Digital Dealer - March 2020 - Cover3
Digital Dealer - March 2020 - Cover4
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