Dealership lowers advertising budget 21% and nets an extra $1.56 Million in 12 months! Pacing an ADDITIONAL $1.2 Million in 2020!

PSA: I CARE A LOT ABOUT DEALERS GETTING WHAT THEY DESERVE.

THIS ARTICLE IS WRITTEN WITH OUR OWN EXAMPLES TO SHOWCASE HOW AND WHY. LETS MAKE SOME MONEY!

Advertising budgets get inflated over time, especially in the automotive industry. 

Fountain Forward takes an objective approach to managing our client’s marketing budgets to optimize a dealership’s advertising dollars and increase return on ad spend. 

Our client decreased their advertising by 21% and made an extra $1.56 million dollars in just 12 months.

THE PRIMARY GOAL OF YOUR MARKETING BUDGET: GENERATE DESIRED OPPORTUNITY AT SCALE.

The world moves fast for automotive dealerships. Every month seems like a new year that brings about different challenges. 

It’s common for dealerships to spend more on marketing, especially when having a slow month… It only takes a bad first week to have what we call, “SPAZ” moments of vulnerability and we do our best to prevent them.

Normally they go a little like this:

  • Call the direct mail company, blame the PPC campaigns, Facebook doesn’t work, on and on.
  • Traffic at the dealership is down, sales are down, so dealerships spend more money to make up for that bad week and to lift the rest of the month.
  • Regardless of the medium, money is being thrown around. 

Repeat that a few times a year, and you have 10’s of thousands of dollars in miscellaneous spend that isn’t attributable due to the lack of planning and therefore tracking.

As a partner to our dealers, we want to prevent this. 

The goal of your marketing budget is to find in-market consumers, convert them into leads, and give your dealership an opportunity to do business with said consumers.

It sounds so “standard”, but to do it well takes a lot of time and effort.

If you’re just checking boxes with tactics as I mention below, please take into consideration that you’re thinking tactically, and not strategically. It’s HOW and WHY that makes you money, not just doing it.

It’s ideal to have every single ad setup in a sequence based on triggers and events. It’s a contingency plan! 

Humans are unique, so follow them! 

As they don’t convert, hit them with something different, like increasing the urgency for example.  

Another example is correctly using dynamic retargeting (where every ad is customized and unique to each individual at scale – and they see vehicles they personally looked at on the site and “like” vehicles but didn’t become a lead), and targeting based on different actions on the site as they hit time triggers, page triggers, and previous browsing triggers. 

How about carousel based ads showing inventory based on what is currently available on the lot, and based on audiences they fall into (ex: if they shopped for a Ram 2500 on a different site, liked an image related to a Ram 2500, or if they match one of 17,000 different data points the Facebook targeting algorithm uses to identify audiences with the propensity to want to buy a Ram 2500 – then they will see a carousel ad of current Ram 2500 ads that are at your lot right now). 

Stop showing them the same OEM ad over and over when you can segment these people based on their actions. 

The final piece is how you’re measuring “Offline Events” from your ads. 

Which ads are making you the most money and why? 

If you don’t know, let’s find a way to get you in the know. Let’s figure out which ads are making you CASH MONEY.

Nearly every dealer I talk to is doing “SEO” and when I ask the GM what their strategy is the, answers are astonishing. “Increase my organic traffic” is the answer 95% of the time. Pardon me if I’m being too assertive, but I give a LOT OF SH*** about you getting a return on your money. 

    1. We know that the vast majority of a dealership’s sales come from users within 15 miles of the dealership.
    2. On average our SEO Campaigns bring our clients an additional 6,496 LOCAL visitors to their website every year. 
    3. The increase in traffic results in an additional 295 leads coming in through the dealer’s website strictly from SEO efforts.  
    4. On average, this results in an additional 51 cars sold per year. To add, it brings in drastically more GROSS profit. Grosses from organic leads average around $3,000 per car across our dealerships.
      • That’s a cool $153,000 into your pocket every year. Call me crazy, but that’s insane. 

In addition to bringing in more users, visitors brought in through the SEO Program are much higher quality than paid.

    1. SEO users bounce 84% less than SEM users. 
    2. SEO users visit 26% more pages than SEM users.
    3. SEO users fill out 2.73x the amount of forms SEM users do.
    4. SEO efforts result in a 62% CPC (Cost Per Click) reduction compared to SEM. 

For Bayshore CDJR, our SEO efforts resulted in increased organic traffic that converted into increased leads on our clients website. 

What if you already have these services? After all, doesn’t everyone say they can get you more leads for less money? 

I sound like a broken record, but it’s how you put all the tactics together, not that you’re doing them all. A basic SEO package that is available through website providers should be viewed as a bare minimum. You have it, the dealer down the road has it, and so do the surrounding dealers to them. 

How do you plan on earning more business by simply checking a box? 

You need to be equating effort to cash in your pocket and you need to have these tactics tied into a strategy. Measure them OVER AND OVER AND OVER AND OVER….

    1. Through the first 6 months of 2020, an automotive dealership of ours has received an ROI of over 18 to 1 through Facebook advertising. A cost per car of under $150. Facebook alone can be attributed back to over 35% of all sales that have occurred this year.
    2. Through the first 6 months of 2020, a different automotive dealership of ours has received an ROI of over 13 to 1 through Facebook advertising. A cost per car of under $200. Facebook alone can be attributed back to over 42% of all sales that have occurred this year.

SEEING IS BELIEVING

EXAMPLES OF REAL DEALERS THIS YEAR 

When you cut a budget drastically, the only way it will be successful is if you can effectively cut your cost per car and continue to drive sales. 

Our social media advertising and search engine optimization teams are able to better allocate your capital by cutting the cost per car and more efficiently reaching in-market consumers.

We are able to cut excess spend since we can consistently and effectively reach in-market consumers for a lower cost than other lead providers and agencies. 

Between multiple different dealerships, our clients have averaged a cost per car of less than $200 with a comprehensive Social Media advertising campaign.

In addition, our clients have averaged a cost per car of $301 selling cars using search engine optimization.

This doesn’t take into account the numerous consumers that use SEO and do not convert in any of our tracking, which we know happens through not only sales, but service as well. These services allow us to sell vehicles at a fraction of the cost from other lead providers. 

  1. When comparing against top 3rd party lead providers, our Social Media advertising results in a cost per car of 14x lower than traditional 3rd party providers
  2. When comparing against top 3rd party lead providers, our SEO results in a cost per car of 8x lower than 3rd party lead providers. 

Similarly, our social media advertising strategy allows us to bring more, in market consumers to the website that are ready to convert at a fraction of the price other lead providers can. 

Despite cutting their budget, our client saw a huge increase in website traffic, which in return, yielded a higher amount of quality leads and total opportunity for our client to do business. 



The increased traffic resulted in more lead volume and opportunity for our client. 

  • We also measure CORE leads that come to our dealer’s site. These CORE leads are conversions that happen through our client’s actual website that we have found to be of higher quality than other lead sources.
  • These leads best reflect a dealer’s marketing strategy. Marketing efforts bring users to your website, who then convert into leads on your website, and can be measured as CORE, organic leads. Note: this is completely different from Offline Events. 
  • Our client saw an increase in both CORE leads, and total leads which has led to the dealership pacing to make an additional $1.2 million dollars more in gross profit in their second year. That’s an increase of $2.7 Million in two years!
      1. 1635 additional leads in the first 6 months of 2020
      2. 983 of those leads being CORE leads

CAN YOUR DEALERSHIP AFFORD TO DO THIS? CAN YOU AFFORD NOT TO?

Can this really work for your dealership? Like seriously, it’s all the same right? All of you say you’re top of the line so what does it matter?

  • We see the problem as very black and white. You have X amount of money with the goal of getting X amount of leads to sell X amount of cars. 
  • By keeping the problem simple, we can evaluate your current budget and spot inefficiencies and truly identify:
    1. What IS selling cars
    2. What IS NOT selling cars

Once Fountain Forward does a deep dive of your dealership, we’ll confirm those results with your dealership and work towards a solution of better allocating your dollars. 

What do you really have to lose? In fact, we would happily take the time to understand who your customer is, evaluate the competitive landscape, and audit your marketing budget for free. Our analytics department will provide you with a comprehensive dealership overview audit custom to your dealership. 

Chances are, if you have made it this far in the article, you want and believe your dealership can grow. We want to grow WITH you. We can identify where those areas for growth are.

Fountain Forward can help optimize your budget, track your spends, and lower your cost per car to make sure your dollars are spent efficiently. 

With a comprehensive plan, you can work on assuring you have the right inventory, pricing, and focus your attention on your sales process to close more business. 

We want to grow with you so we can move FORWARD, together.

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