By Bob Lanham, Head of Automotive Retail, Facebook
With advertising and marketing being one of a dealership’s top expenditures, what a dealer buys and how they buy plays a role in their dealership’s profitability. One of the biggest struggles for dealers today is understanding how their entire media mix impacts their bottom line. Anything that is standing in the way of a dealer fully understanding the impact of their entire media spend/mix on their bottom line is friction within the advertising and marketing process.
To dig into this more and better understand how to remove that friction, dealers should ask themselves:
1) Do you know everything you are buying across both your digital and traditional efforts? The first step in understanding the impact that your media spend/mix has on your bottom line is to gain visibility into everything your dealership is buying. This can be search, TV, direct mail, social, and even the software platforms used to execute your media. When a dealer gains transparency around their entire media spend/mix and the reasons why they invest in certain channels, the dealer is in a better position to be able to evaluate whether their media spend/mix is an expense, or an investment.
2) Do you know if the return of each platform you buy is worth the cost? Calculating the cost of what you are paying for each channel you buy against the return you think you are getting from that channel will help you identify waste across any high-cost/low-return mediums. Spending dollars on channels that do not deliver respective ROI against their cost is another form of friction that can negatively impact your bottom line. Understanding how each channel, and its true cost to its return, fits in with the rest of what you are buying will help to ensure your media spend/mix is driving business growth. We have been told by many dealers that after doing this exercise, they have been able to cut media that was not delivering the respective ROI, without seeing a dip in sales.
3) How are you measuring everything you buy back to profitability? Media plans do not perform in a silo. A great example of this is the relationship between Facebook and search. In a study from July of ’18, we found that when Facebook ads were run for a specific product or service, these ads were responsible for driving 19 percent more organic search clicks and 10 percent more for paid search clicks for those specific products and services versus when people didn’t see those Facebook ads.*
This is why it is important to understand how everything you buy works together, what the cost of everything you bought was, and how many vehicles you ultimately sold with that spend/mix. Friction in the advertising and marketing process is present when you have media expenses that are not driving towards your most critical business goals. Removing that friction and measuring your entire media spend/mix against actual vehicle sales will certify that your media efforts are aligned to what is most important.
Solutions across Facebook and Facebook’s Family of Apps and Services (Instagram, Messenger & WhatsApp) have helped dealers leverage paid digital and mobile ads as an investment opportunity for the future growth of their business. Visit our “Facebook Strategies for Dealers” website where you can download our new “Facebook Automotive Playbook for Dealers,” to learn the core dealer strategies most critical to your business, check out online courses and training videos customized to the automotive marketer, and sign-up for the auto monthly newsletter to stay connected.
About the Author
Bob Lanham joined Facebook in 2015 as an Automotive Retail Lead and has since become Facebook’s Head of Automotive Retail. Bob manages a small team that is responsible for the top 10 Dealer Groups in the US, working with Independent Dealers through the Manufacturers and Partnerships with the key DMS, CRM and Equity Mining Platforms. Previously, Bob was a Sales Director at Hulu where he opened the Detroit territory back in 2009 when Hulu was just getting off the ground. Prior to Hulu, Bob spent four years at Yahoo! and three years at Microsoft. Bob started his automotive career at Toyota of Sarasota selling cars as a commission only sales representative before becoming the Internet Sales Manager and F&I Manager. He’s a graduate of Elon University.
