Digital Advertising Delivers Results

The pandemic shutdowns delivered some major blows to auto dealers, who had to figure out an entirely new way of doing business. Three years later, that transformation continues, says Lauren Donalson, chief operating officer of PureCars.

“The initial days of the pandemic were pure pandemonium, where dealers were scrambling to figure out how to keep the lights on and continue selling to customers,” she says. “That has ended now, but dealers now face post-pandemic pressures that present some unique challenges.”

Dealers are at work shoring up their inventories this year, though the worst of the pandemic inventory crunch is behind them. Used-car availability has tightened. Manheim reported that values fell 3.2% from May through the first half of June, down 9.4% year-over-year. Though demand has stabilized, Cox Automotive analysts predict it would fall if unemployment rises significantly.

In that environment, the ways dealers advertise and market their business and products must shift, Donalson says.

Shifts for Ever-Changing Market

In the early pandemic days, dealers advertised the safety protocols they had in place to prevent transmission of Covid-19. They started advertising things like take-home test drives, mobile service, or vehicle pickup and drop-off.

“The message was all about giving customers peace of mind,” Donalson says.

Fast forward to 2021 and 2022, and a critical parts shortage made buying new vehicles harder and used vehicles scarce. Suddenly dealers had to shift ad dollars to buying cars instead of selling them. Donalson says that was a first from a dealer’s perspective.

The shift prompted PureCars to develop solutions for dealers in online spaces that ranged from Google to Facebook and more.

“To better understand a positive-equity position, dealers will have to use their own first-party data,” Donalson says. “It’s not safe to assume that every customer coming due on their lease or about to pay off their vehicle is in a positive position to lease or purchase a new one.”

She says dealers must advertise their vehicles in the right places to get the right customers. They need to have ads on search engines, social media, online video platforms, television and streaming audio spaces.

“Three years ago, not all of these things were top of mind for dealers. But this industry is constantly evolving and shifting to meet dealers’ needs.”

What Dealers Need to Know

As a provider of digital marketing technology and services for automotive dealers, PureCars strives to become subject matter experts in the latest advertising and marketing spaces.

“Whenever new formats come out, we sink our teeth into learning everything we can about them so we can pass that knowledge on to dealerships,” Donalson says. “The traditional dealer might not have had access to digital advertising when they entered the business, so there is a lot to learn.”

Traditional advertising, such as print, radio and TV is still important. But she says, “digital advertising is where dealers need to put their dollars first.”

She suggests that dealers start with something they’re familiar with. Television has always been a place for advertising, but viewing habits have changed. According to Cloudwards.net, 85% of U.S. households have at least one video-streaming subscription, and streaming is up 21% since 2020.

When dealers reach potential customers on streaming services, their ad spend is more effective than traditional network television, Donalson says.

Mix In Audio Streaming

Audio streaming is the next step, she says. According to Cloudwards.net, 60% of households also have at least one paid music streaming subscription.

PureCars recently partnered with Spotify to launch streaming audio advertising services on the musical platform. The step allows dealers to reach Spotify’s engaged, young audience, Donalson says. Donalson says that listeners who hear audio ads on Spotify are 52% more likely to purchase the new vehicle being promoted.

Benefits of Advertising on Streaming Platforms

Whether audio or video, streaming platforms give dealers the ability to target specific groups. “Instead of blasting a message out to the masses with little to no understanding of who you are advertising to, you can actually target folks down to the brand and even segment level,” Donalson says.

Let’s say a Ford dealer wants to push the Ford F-150. The advertising can be tailored to target shoppers in the market for a truck. “Now we’ve eliminated a massive amount of waste and made your advertising spend much more effective,” she says. “This saves money, and by using these platforms, you can track what happens on your website after these folks are exposed to these ads, because it’s a digital medium.”

If a dealership chooses Google Display & Video 360 for advertising, they can leverage Google’s market-audience data, which drills down to the last click of every Google Chrome user’s website activity. “Google tracks the websites you are visiting and the behavior on those websites,” Donalson explains. “We can see if you are interested in a vehicle down to the brand level. We now can deliver highly relevant, targeted ads and eliminate a lot of waste.”

Amazon Garage is the second largest database of vehicle-ownership data, second only to the Department of Motor Vehicles. “There’s no predictability with Amazon Garage. We know what vehicle you own, and if you’re shopping around Amazon for parts and accessories, Amazon can predict what kind of vehicle you are in the market for, down to the finite degree,” Donalson says.

Using a mix of digital marketing opportunities presents a “vast improvement in cost efficiency versus their traditional cousins and broadcast media for traditional radio,” she says. “You get eight to 20 times the bang for your buck when you go with the digital cousin to TV and radio. That’s all based on being able to target the right people with the right message.”

Tracking Metrics, Conversion

PureCars places a 30-day conversion tag on anyone exposed to the advertisement, then monitors website traffic. The tag tells them when a person who heard or saw the ad visits the dealer’s website.

“We typically see an increase in a couple of things [after running an ad],” Donalson says. “No. 1 is brand awareness. We generally see a brand lift of 60% to 70%.”

But successful conversions are possible only with the right kinds of ads. Dealers can reuse advertising they already have on the platforms, but Donalson has some recommendations for what works best.

“Whether it’s a 15-second or a 30-second spot, you really only have about five seconds to reach the listener or viewer. It’s best to lead with the information you care about most, such as the dealer’s name and the value proposition. Go into more detail, then close the ad where you started, with the dealer’s name and expiration date for the offer.”

Note the website URL within the ad, even with audio ads. Donalson says that “it further increases the ability to measure and track direct traffic to the dealership website. That helps provide another layer of measurability and reporting on the conversion from these ads.”

Analyzing metrics monthly helps dealers see how ads perform. “They can see the highlights and lowlights of their advertising, which ads performed well, and which did poorly,” she says. “Then they can take the money they were spending on the poor performers and put it into the better performers. It allows dealers to fine-tune and ratchet down their ad spend for the best conversion possible.”

Dealers have an array of choices to market and advertise their business. Even with that variety, it’s still important to know which platforms work best for a market and to, when in doubt, get some help.