TV and Radio Ads are Burning a Hole in Your Marketing Budget

TV for most dealers isn’t an efficient use of advertising dollars anymore and it is burning a hole in your marketing budget. 

Our client, Winnie CDJR cut out TV and reallocated those marketing dollars towards paid Facebook Ads and they became the top CDJR dealer in their respective area and increased sales by 144 units year over year. 

This wasn’t because TV was bad, it was because it cost more to convert via TV than it did via Facebook. We’re not anti-TV, we’re anti-wasting money! 

Prior to cutting TV, Winnie Dodge struggled to compete with other dealers in the area. They were consistently out-sold by one or two other dealers, depending on the month. They were lacking an edge over their competition.

Per our recommendation, Winnie Dodge cut TV from their budget in September of 2018. The dealership then used these funds to run paid facebook ads to reach in market consumers that are in the decision phase of choosing where to buy from. Another key point here is that we believe in only changing one thing at a time, to truly see the cause and effect of that change.

NOTE: This was a massive ordeal and not something to be taken lightly. TV/Radio/Newspaper has been a mainstay in car dealership budgets FOR A LONG TIME. We personally built our ad budgets allocating 40-60% of spends to TV/Radio/Newspapers for many years. 

Since cutting TV and starting paid facebook ads, Winnie Dodge has: 

  1. Became the top CDJR store in the area.
    • NOTE: They are still the top CDJR dealer in the area
  2. Increased total sales by 144 units (19%) year over year.
  3. Increased total profit by 17% 
    • $279,323 in additional profit year over year

Who doesn’t want to increase your sales and add cash to your bottom line? 

In addition, the dealership saw this happen at the dealership after cutting TV. 

  1. Increased ups at the dealership by 42% year over year 
    • 544 additional ups year over year
  2. Increased total leads by 52% 
    • 981 additional leads year over year
  3. Increased organic leads coming from the dealer’s website by 75% year over year
  4. Increased website traffic by 62% year over year
    • 27,496 additional users year over year
  5. 45% of Winnie CDJR’s 2019 sales were attributed back to paid Facebook ads

Your market has a limited amount of car sales each month. 

The market, YOUR MARKET, isn’t going to get bigger so you can sell more cars. 

That means each month, there is a limited amount of people who are buying cars. 

If your advertising dollars are focused on convincing those consumers in the decision making phase of the sales process, you can then start to convince more consumers to buy at your dealership and sell more cars. 

Good news for you, you can specifically target those buyers using paid Facebook advertising, IF you do it the right way of course. Let’s put a really large IF. Like reallllllyyyy large. 

Doing Facebook Advertising is not the same as doing it well, unless of course you think you can pick up a tennis racket and beat Roger Federer tomorrow… That would be sick! 

We measure our franchise dealers by pool percentage. The economy (pool) can change at any time, but you always want to have the biggest piece of the pie. 

Winnie CDJR was able to take market share from their competitors by being able to consistently reach these in-market consumers by starting paid Facebook ads. 

Those buyers are there. They need to be reached at the right time with the right messaging.

Facebook Ads allow your dealership to do that more effectively and efficiently than TV.

There are benefits to TV such as the following:

  1. TV increases the legitimacy of your brand
  2. You can reach an older audience that may not spend much time on the internet
  3. TV is great for branding

Paid Facebook ads have many of the same perks PLUS MORE

  1. More cost effective
  2. Advanced targeting and remarketing
  3. More action-oriented ads (you can’t click or call a TV ad)
  4. More flexible (multiple devices)

Although TV has tried to keep up and evolve with the times with new reporting and analytics, TV is still behind and by the way, way too expensive. WAY WAY TOO EXPENSIVE. 

The attention bought from TV is of low quality as a fraction of the people reached most likely are not paying attention or out of the market.   

In addition, TV is easy to get emotional about. 

When you see yourself or your dealership on TV, your emotions get tied to that. You’re on TV! 

Who doesn’t want to be on TV? 

Bold 2020 Statement for Tier Three Dealers: TV is for vanity and adds emotional ties that are hard to cut.  

Decisions that are made with emotion tend to stay even though they aren’t the best use of your dollars.   

Advertising budgets get inflated over time. This is normal across most service businesses. 

Throughout the year, different expenses get added to your dealerships marketing budget. It happens at essentially every dealership.

Fountain Forward takes an objective approach to managing our client’s marketing budgets by evaluating them on a quarterly basis. 

Every quarter, we optimize our dealer’s marketing budget to maintain their cost per car and to eliminate inefficient spending that results in inflated budgets. 

Quarterly budget audits are meant to maximize your dollars to minimize your exposure. 

We have worked with 50+ auto dealers moving over $3.5 billion in sales over seven years.  Don’t take my word for it, you can call our dealers and they will tell you.

September 29, 2020 / 5 minutes of reading

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