#TipTuesday: 3 Tips for Optimizing Your Dealership’s Digital Advertising

By March 5, 2019 March 8th, 2019 No Comments

As the digital marketing space has continued to grow, so have the options for car dealers when it comes to determining what channels to allocate spend to. Google, Bing, Facebook, and even Amazon are all vying for a stake in your advertising dollars. A common misconception is that you need to be utilizing every marketing channel in order to be successful. While it’s certainly advantageous to be utilizing multiple channels, for the vast majority of dealers it typically leaves their ad budget overextended, resulting in stagnant growth and mediocre performance.

When it comes to allocating your digital budget, you need to be measured and strategic in how you allocate funds. Every channel isn’t always relevant to your business nor will all channels be relevant to your dealership’s marketing objectives.

Outline Your Dealership’s Goals

It’s important to express what your main objectives are if you want to allocate your digital advertising to spend appropriately. In its simplest form, most digital advertising strategies can be broadly summarized into two main areas: Sales and Awareness. From there, you can work with your provider to segment these into smaller items that are both actionable and measurable.

For example, a dealer group that just opened a new point in a promising market would want to focus on Awareness and measure performance by KPIs (Key Performance Indicators) such as YouTube Video Views, Google Display Impressions, or % New Visitors to the website. However, a more established business struggling with Sales would benefit more from focusing spend on lead generation and conversion optimization, along with expanding keywords via Paid Search in Google and Bing.

Be Realistic With Your Spend

The most common question we get from new and existing clients is “How much should I be spending on digital marketing?” or “Are we spending enough?” For current clients, it’s an easier question to answer since there are existing datasets to rely on to project potential areas that are stagnant due to budget. For newer clients, it’s a far more difficult question and to be truthful, not one that has a simple answer. Any digital marketing provider that says otherwise isn’t putting your best interests in mind.

Spend is highly unique to each dealership and tends to depend on several external factors – gross profit, internal store processes, and inventory, just to name a few. However, it’s not impossible to determine a benchmark to see if you’re at least on par with what a similarly sized dealer might be spending on digital. The below formula is just one approach to determining a monthly budget:

[((Total Gross) x (Ad Expense as % of Total Gross))*55.4%] / Months Elapsed

The table below contains averages from the 2017 NADA Data Report:


Domestic Dealer Avg. Import Dealer  Avg. Luxury Dealer Avg. Mass Market Avg.
Advertising Expense As % Of Gross 8.4% 8.6% 5.6% 9.2%


For example, an Import Dealer looking to determine an ad budget with 196 New Vehicle Sales Over 4 Months at a New Gross of $514,000 would, using the above formula, need to spend roughly $6,000/month to be on par with a similarly sized competitor.


Evaluate Against Your Prior Digital Advertising Spend Efforts

Quite simply, you don’t know where you should go next if you don’t know where you’ve been. Getting a clear picture of past performance can sometimes be a struggle, especially if providers are hesitant to provide access to the data via Google Analytics. Be hesitant of working with any provider that isn’t open to being transparent as over time you’ll lose the ability to effectively evaluate future efforts.

With consistent data, you can better work with your digital provider to identify areas where spend may have been wasted on campaigns that neither generated leads or had a meaningful impact on site traffic, as well as underfunded channels that saw positive performance, and digital channels that were driving the right visitor traffic.  By working with your digital marketing provider to measure if the new strategy is providing better results you’ll be able to leave your marketing meetings with a clearer performance picture.

The goal for every dealership is the same – move cars. The differences lie in the specific business goals and objectives each dealer defines to get there. Coming prepared with an understanding of how much you might expect to spend allows you to better allocate that money to the channels that will support the goals you’ve set. To learn more about our award-winning Digital Marketing and to grade your current PPC, contact Dealer eProcess today! You can also check out the infographic below!

  • This field is for validation purposes and should be left unchanged.