High-Value Users: The Key to Maximizing Dealer Ad Dollars

The marketing and advertising game has changed for dealers. It wasn’t all that long ago that many of you bought airtime on local TV, sent out a few radio spots and perhaps even took out an ad in the Sunday paper to bring people into the dealership. One dealer recently told me, “All I had to do was open the doors and wait for car shoppers to show up.”

And, more often than not, they did.

Mass marketing worked. There were fewer media options — a handful of TV stations, one or two daily newspapers, and a local radio station were enough to reach an entire town.

It came down to a simple principle: Outspend the competition and you’d likely outsell them too. You never had to ask, “Where did the car shoppers come from?” They just did.

But as media has become more fragmented and people have shifted the way they consume information, it’s become more important to be strategic with ad dollars to reach car shoppers more efficiently. You need to deliver relevant ads through the right channels that appeal to potential car shoppers.

But with so many different channels to interact with people, which are the most effective for your purposes? Are you even reaching the right consumers?

In order to determine the right marketing mix, you need to start asking, “Where did the car shoppers come from?”

Quality Beats Quantity

Attribution — knowing where high-quality sales leads come from — is the new holy grail for the industry. It provides the answer to the most important question you can ask: What drives sales?

If you can understand what messages were most impactful and prompted a person to head into the dealership and drive off in a new car, then you can likely replicate that approach with similar car shoppers. You’ll know which campaign elements resonate with audiences, and which ones you may need to optimize.

For instance, you can identify the best prospective car shoppers — those we like to call high-value users or HVUs. These are audiences that exhibit behavior of those most likely to make a purchase — typically those whom visit your website more than three times, spend more than six minutes on the site, look at more than eight pages and view at least one vehicle details page.

High-value users tend to buy at a 34% higher rate than overall online shoppers, even though they only account for 11% of traffic.

For our 2018 Attribution Study, we conducted a nationwide survey to provide empirical data about what advertising is most influential in an online shopper’s path to purchase. One insight gleaned revolved around new make-and-model paid search campaigns. This tactic accounts for only 2% of all online traffic. However, it accounts for 12% of all HVU traffic.

Embracing the Change

While make-and-model search doesn’t drive a mass audience, it does drive a high-quality audience. It should be a bigger part of the advertising mix than most dealers would realize intuitively.

Branded search also drives a high level of HVU traffic. In fact, 12% of all HVUs come through branded search. We recommend you engage in branded search as a way to drive a higher-quality online audience.

Other key takeaways included:

• Technology has evolved to provide more precise measurements tying advertising to sales results. All dealer marketing programs should strive to make this link and better understand what truly drives sales.
• Shopper behavior is a better measure than traditional website metrics. It’s far more effective to deliver the right online traffic rather than a mass audience that isn’t really ready to buy.
• Dealers must optimize paid advertising around the best source of sales, not traffic. It sounds intuitive, but dealers often fall short of this goal in practice.
• Third-party sites drive activity that converts to sales, but conversion effectiveness can vary by individual retailer. It is important for dealers to know the complete metrics behind their online lead sources and not rely solely on the information provided by any vendor’s sales teams.

Advertising and marketing have changed radically in the past two decades. Simple tactics that used to work have evolved into multifaceted strategies attracting smaller, but more on-target audiences.

Don’t be intimidated. Change can be good. Taking an approach that deeply focuses on what drives sales is an important step in the right direction. Utilizing today’s technological advancements to attract an audience that is more likely to buy will make marketing efforts more efficient and ultimately contribute to higher profits.

Amy Hughes is senior director of dealer intelligence for Experian.

Originally posted on Auto Dealer Today