How First-Party Data Can Revolutionize Advertising Strategy and Budget

You are not imagining it. Your dealership’s marketing ad budget is not stretching as far as it did just last month.

Ad costs have skyrocketed over the last quarter, with the cost per click (CPC) on Google SEM experiencing a 32% year-over-year (YOY) increase. May alone experienced a staggering 40% increase when compared to the same period last year. While there are a lot of conspiracy theories out there about why and how this happened, it all leads back to a need to change the way dealerships do their marketing.

As data collection and privacy regulations are becoming more prevalent, social and search platforms change their algorithms on a whim, and the long-awaited threat of cookie elimination continues to hang over our heads, it’s time we took a closer look at how activated data can help you push through the noise and continue to drive business success.

First Things First

When we talk about first-party data, we are referring to any data collected by your dealership directly from your shoppers and customers. This data can come from multiple sources in play at the dealership including the website, lead forms, ad activities, purchase history, chatbots, and more. Because it’s collected directly from the source, it is highly valuable and accurate, offering you the ability to leverage this information to target and engage them on a personal level with content that directly reflects their individual needs and preferences.

So what if the cookie crumbles?

Digital advertising is a must have for any dealership marketing strategy worth its salt. The benefits are many, offering you a way to engage shoppers online, where many spend a lot of their time. Truth is, anyone can do digital marketing, but to do it right, your dealership needs to be using first party data. Leveraging first-party data allows you to hone your advertising strategy with pinpoint accuracy, ensuring that your budget is spent wisely and effectively.

Typically, digital advertising includes a lot of guessworks, and broad, generic targeting tactics that reach uninterested or unengaged audiences, creating a lot of marketing waste. When you leverage first-party data, you can build granular lists of shoppers based on hyper-specific criteria to use on Facebook and Google to improve your targeting, ensuring your ads reach the right shoppers at the right time, maximizing efficiency of every dollar you spend.

Once you have started using hyper-specific audiences across your advertising channels, you can take it another step further to build a sophisticated retargeting structure. Take, for example, shoppers who clicked on one of your targeted ads and were redirected to a specific VDP on your dealership’s website. You can take any shopper who spent more than 30 seconds on that page and create a retargeting campaign specifically designed to re-engage bottom of the funnel shoppers and bring them back to your website, increasing the chances of conversions.

This sophisticated, next level digital marketing is not possible without the integration of first-party data. When you activate your data and use the information you have in front of you, algorithm changes and crumbling cookies become perfectly irrelevant.

Engage, re-engage, then directly engage

Let’s get real for a minute. While digital ads are non-negotiable in dealership marketing, in reality, your campaigns often result in you paying for leads that are already in your system. Retargeting, hyper-targeting, engagements, views and clicks - they all circle back to that same group of shoppers. So, how can you target those shoppers in a way that saves money while still engaging them with content that matters?

This is where smart, data-driven email marketing comes into play. Email allows you to reach your shoppers directly in their inbox with content that aligns with their interests and needs, increasing the chances of them coming back around to your dealership - all at a fraction of the price. Fact is, dealers using smart, data-driven email marketing see existing leads as one of their top traffic sources on their website for the simple reason that personalized engagements work.

Leveraging a smart email marketing platform that integrates with your data offers you the ability to create deeply segmented audiences and automatically generate personalized content for every shopper. You can then build a follow-up process using behavior based triggers which will ensure automated, timely, relevant follow up flows.

Think about it like this: a shopper in your CRM clicks on an ad, lands on your website and explores a particular car but doesn't make a purchase. You can follow up with an email that provides a special offer, or an invitation to schedule a test drive. Or, if a shopper who previously purchased a car from your dealership revisits your website, you can automatically engage them with opportunities to upgrade their vehicle, offering options that reflect the vehicles they explored - no digital ad spend required.

Taking it beyond email, we can create similar experiences using SMS or direct marketing campaigns, which offer opportunities to engage your existing customers and leads in an up close and personal way without the added price tag that comes with digital advertising.

Last things last

While digital advertising will always be the key player in a dealership’s marketing strategy, the next few years will see a steady shift in focus towards data activation. The way we do digital advertising will transform as data driven audiences prove to drive better results. We are also likely to see a shift in budget allocations as dealers shift their attention towards tools that can help them engage existing leads, rather than increasing spend for more ad campaigns.

Algorithms and cookies are not the insurmountable obstacle the advertising bigwig platforms want you to believe they are. In the not-so-far-off future, data activation will become the factor that determines not only dealership marketing but business success.