This little write up expands on our recent “mention” in Adweek thanks to the Head of Automotive for Facebook, Bob Lanham.
Please allow me to set the scene:
NADA is forecasting 2022 will be the most profitable year ever for dealerships, as inventories remain at near-record-low levels.
There is money POURING into your dealership’s bank accounts. You’re making stupid money.
You are literally running a money press in your finance office.
I get it – there’s not a lot of pain when you’re making more per copy than EVER before.
BUT – Even though you’re printing money, my question is the same…
“Do you think you SHOULD be making more? Not could… Should.”
I think you should. You should make more now AND in the future too.
AND you don’t have to spend more time or money to do so.
“Working with its agency Fountain Forward, Bayside implemented an MMM (Marketing Mix Modeling) approach that looked at the auto dealer’s marketing mix holistically—rather than at each siloed channel… [as a] result, the dealership increased new sales by 55% in a matter of months.” – Bob Lanham, Head of Automotive Retail for Meta (Facebook, Instagram, and WhatsApp).
What is Media Mix Modeling and why in God’s name should I care?
“MMM is a statistical analysis tool that has long been used by advertisers to understand how marketing tactics impact sales, and it has proven to be effective in producing accurate insights about traditional media.” – Bob Lanham, Head of Automotive Retail for Meta (Facebook, Instagram, and WhatsApp)
Marketing’s impact on sales should be measured with consistency. I realize that is easier said than done but please allow me to elaborate.
Putting all of your marketing in separate “silos” is for the birds. Sure, it’s important to measure how individual tactics are doing, but what if measuring everything from 10,000 feet is actually more profitable?
If a dealer is willing to devote an hour a month to using a Marketing Mix Model, they will have consistency. Practice now, while it’s sunny. It’s worth millions of dollars and that’s not an overstatement.
Use your MMM to find your baseline and use your dealership’s data as the primary navigation tool.
By measuring separate “silos” you are missing how marketing is actually impacting sales.
The Ad Week article touches on updates to how user information is collected on iOS and Android platforms and how that will impact results. Much of what used to be trackable is gone forever or has been significantly diminished.
Standard agency reporting is already bad enough.. Imagine what these changes to user privacy are doing to it.
Dealerships that fail to adopt a Media Mix Model for their dealership will lag behind and eventually put themselves in a vulnerable position when acquiring a custom becomes much more expensive.
Lately, dealerships seem to be wondering about the same things.
I copied a few transcripts from client calls and my actions after those conversations:
“Most of the dealers in our “20 Group” are scared of changing advertising right now because things are going so good. Don’t rock the boat. With that said, most mentioned they aren’t paying as much attention as usual…”
Simply put, do whatever you can to remove the emotion when matching marketings impact on sales.
- “Google Ads are getting crazy expensive and yall have mentioned reallocating that money. Should we look back at that?”
- Not only did we look back at it, we no longer have money devoted to Google for this particular dealership. Small market dealer and the cost to acquire on FB/IG versus Google is 50% less at a minimum.
- “I had no clue what the hell you meant when you said MMM but when you compare our spend, lead mix, traffic mix, etc. to all the other dealers I’m glad I know what it is.”
- I’d say out of 200 dealership strategy calls in 2021 I think 10% knew what MMM was and once they found out, 100% expected to have one for their dealership.
- “My real concern is when all this (gross per car) ends. It’s going to normalize, and I have no interest in panicking when it does…”
- Put the MMM in place and when things change, use all of your previous data to guide you. It costs you nothing and is easy enough to do.
Don’t wait for rain, repair your roof while it’s sunny
Get a real grasp of your traffic, conversion of the traffic, and the effects on your sales system at your dealership.
Measure that regularly.
When you see something out of whack, don’t change everything at once.
Change one piece of your marketing mix at a time, and see how that impacts the model.
Know exactly how much you’re spending to acquire warm bodies. I don’t just mean your lead sources, etc. Get the whole lay of the land and use that as your north star.
Here is the link to our basic Marketing Mix Model.
Regardless, I encourage you to use the 10,000 foot view as your guide to more sales and more profit now.