Understanding and identifying areas of inefficiency within your marketing strategies can unlock potential savings and significantly improve your return on investment (ROI).
Key takeaways from this article include:
Marketing waste becomes particularly pronounced when digital strategies fail to allocate resources efficiently across inventory. This issue is often the result of an over-reliance on algorithmic approaches that might favor a narrow set of options—like a few specific cars—thus neglecting a broader and potentially more strategic exposure of inventory. The kicker, it’s often the few vehicles in inventory that would be popular organically that consume a large portion of your digital marketing budget leading to significant financial drain and missed opportunities. This can mean the difference between a thriving inventory with high turnover and one that stagnates with overlooked potential resulting in aged units with deep unnecessary discounts.
Key components of marketing waste include:
By pinpointing where resources are misallocated, marketing budgets can be realigned towards more efficient and productive marketing efforts that ensure a balanced exposure across all inventory.
Increasing Inventory Exposure
One notable example involves a dealer that uncovered during their free custom marketing analysis that a majority of the paid traffic was allocated to the same handful of cars in the inventory and that two specialty vehicles were drawing most of the paid traffic on every campaign. Reallocating some of the marketing budget to VIN-optimized campaigns resulted in a 23% increase in VDP traffic and a 43% improvement in the efficiency of marketing spend in just 60 days.
Reducing Discounts
Analysis of a dealer group showed a number of used vehicles lingering in inventory over 100 days with reductions ranging from $700 to a staggering $10,000. Of those aging units, many were popular vehicles, recent model years, with very few VDP views. This lack of visibility was costing the dealer group an average of $3,380 per vehicle, demonstrating that discounts alone don’t translate to higher visibility.
Leveraging Data-Driven Targeting
A third example features a dealer that discovered that 73% of their paid campaign marketing traffic landed on an SRP and never looked at a VDP. Of the $42,000 invested in this one campaign, $11,200 of it was unnecessary and inefficient spend. Overall, this dealer discovered that 59% of their monthly budget was marketing waste.
These examples underscore a crucial lesson: by identifying and addressing areas of marketing waste, businesses can significantly enhance the efficiency and effectiveness of their marketing efforts. Whether through smarter inventory exposure, optimized traffic allocation, or data-driven targeting, the path to reduced marketing waste is clear and attainable.
By integrating these strategies dealerships can navigate away from the pitfalls of marketing waste towards a more efficient, profitable future. This transition not only reduces costs but also enhances the overall marketing strategy, driving sales with precision and intelligence.
As you consider the future of your dealership's marketing efforts, remember that the shift towards data-driven, targeted strategies is not just a trend but a fundamental change in how automotive sales are achieved. If you're ready to focus on VIN-level analytics, real-time data, and strategic ad campaign optimization begin with a quick discovery call with a member of our Dealer Solutions team.