3 Ways to Cut Your Dealership’s Marketing Cost Per Car Sold

NADA reported in 2017 that the average dealership spends 55.4% of its budget across digital marketing channels. This increase reflects the industry’s understanding of the consumer’s shift to the internet for the purpose of car shopping. Despite allocating dollars to digital platforms, the marketing cost per car sold has remained nearly the same: $762 for luxury vehicles and $630 for mass-market vehicles. Dealerships that have fully embraced their digital strategies can break these industry averages. By focusing on the relevance of website content, Google’s Quality Score of paid search, and the efficacy of CRM for social media, there is a clear path to significantly reduce marketing cost. The following three considerations will help make that path clear.

1. The dealership’s website needs relevant content to satisfy consumer search

Search engine results pages (SERPs) and third-party sites will deliver competitors’ inventory to local car shoppers. A dealership’s website is the only place where shoppers will not view or engage with any other dealer. It’s vital to build pages that satisfy local search queries across the customer journey, starting with keywords that imply that a person is highly motivated to buy (e.g., “for sale”). Search Console and Google Ads, formerly Google AdWords, provide information about local searches, including impressions, clicks, average position, and conversions. These tools are essential to prioritize content production by marrying it with search volume and search intent. This yields less friction while website visitors navigate across the site to a dealership’s high-value pages, such as search results pages and VDPs. This improved user experience coupled with other SEO tactics like page speed keep reduces bounce rate and increases opportunities for conversion.

Our agency recently analyzed a sample of our dealership network’s Search Console data, totaling 10,000,000 local queries. We found that search queries two to four words in length comprised approximately 76% of all impressions. Upon closer examination, the majority of these short-tail queries included intent qualifiers: “for sale,” “near me,” and “2018.” This information can help dealerships understand how to develop and structure their sites’ metadata and content. By focusing on these searches that offer low-hanging fruit, dealerships inherently optimize their website for paid search and social media campaigns with more-relevant landing pages. Then they can broaden their efforts to acquire more traffic higher in the sales funnel by producing content around long-tail searches where car shoppers are seeking more information about a make or model.

As you expand upon these SEO strategies, you’ll want to leverage Search Console to ensure your site shows up for a greater number of search queries, first with intent modifiers, which are measured by impressions and clicks. Google recently updated Search Console to offer insights from up to 16 months of historical data. The cost savings come in two forms:

1. By creating a frictionless, relevant experience across their site, dealerships maximize the investment through generating more leads that can be parlayed into sales.
2. By having pages that match consumer search, the site will better align with paid search ads and, thus, lower bid costs.

2. The dealership needs to understand the value of Quality Score

Quality Score multiplied by Bid Price equals Ad Rank. Paid search — PPC, SEM, or whatever you refer to it as — remains one of the automotive industry’s best lead generators. As competition grows and market share becomes tighter, it’s vital that dealerships focus on bolstering their Quality Score (QS). Did you know that a dealership whose ad has a QS of 3 pays twice as much as a dealership whose ad has a QS of 6? One key factor, again, is relevance.

The best ad campaigns are broken up into dozens of ad groups that host hundreds or even thousands of ads. This score is also determined by landing page experience and expected click-through rate. These latter two are weighted to equal 78% of what influences QS. When a website is built correctly, as explained earlier in this article, the landing page experience will match better with the ad and searcher’s intent.

At this moment, the automotive industry’s average click-through rate is 4%. Crafting original ads that leverage all applicable extensions and offering a great landing page experience can dramatically increase clicks. Here’s a bonus insight: The longer a dealership can maintain a high Ad Rank, the more likely all extensions will show up. These include price, click-to-call, location, promotion, call-outs, message, site link, and structure snippets. This enables the possibility of pushing customers below the fold on mobile when this strategy is properly executed.

3. A dealership’s CRM has real potency for social media ads

At this point, the majority of dealers have collected customers’ emails and other contact information. They now have an ideal organically built list that can be leveraged across channels that also has particular potency on Facebook. That’s because the social media giant filters the contacts to ensure their validity. Dealers can create segments, such as buyers who haven’t visited the dealership in months or years for service or purchase and prospects who came to the dealership but didn’t purchase, among others. These lists can be used to reach out to previous buyers as well as to create a lookalike audience — at a fraction of the cost of television, radio, mailers, and other traditional methods.

Facebook lookalike audiences come from examining the valid contacts’ interests, demographics, and other features to create a brand new audience that mirrors the original. By coupling these strategies — and implementing them effectively — dealers have the potential to save tens of thousands of dollars per month while providing an increase in website traffic, website conversions, and leads by pursuing more qualified buyers and delivering a more seamless experience.