Don’t Be Average. Build Your 2017 Around the Now Buyer.

As the end of the year approaches, most owners and managers use these remaining days in 2016 to prepare their plans and goals for next year. Within our company, we are busy setting different initiatives and creating monthly, quarterly, and annual objectives as we continue our push towards greater and greater success for our partners and ourselves. This is the time of year when marketing budgets are heavily reviewed and the primary goal is often the same.

Trim the fat.

In 2017 Don’t Be An Advertiser Who Wastes Half the Budget

Perhaps the most famous marketing quote and heavily used cliche when building an ad plan is the John Wanamaker quote: “half of the money I spend on advertising is wasted; the trouble is I don’t know which half.” This is an age old adage that goes back more than 100 years but has largely held true since it was first stated. In 2017 it doesn’t have to be. The level of data and targeting today has given the marketer much more power to go after the right audiences and eliminate the waste that has for so many years cut into margins and hurt the bottom line.

For this concept, let’s jump into the automotive industry to look at some specific examples while knowing that these ideas hold true in many other verticals. I always like talking about automotive because of the many years I have spent helping dealerships build marketing plans and the excitement that comes with the intense level of competition within auto’s 30-day sales cycle. There are few businesses that compete with the same tenacity that is seen each day in auto, and because of that, it has been really fun watching the growth of marketing sophistication over the past decade within the industry (don’t let the naysayers fool you, automotive is not as far behind as other industries with similar sized companies, at least for the dealerships who are doing it right).

Any Given Month, Just 0.4% of the Market Is Buying a New Vehicle

To build the ideal plan, it’s best to start with what’s happening in the industry.

  • What does the average budget look like?
  • What are consumers doing when purchasing a vehicle?

Most people are expecting that 2016 will look a lot like 2015 in terms of sales. Last year, according to NADA, 17.5 million new vehicles were sold in the United States. This is the greatest number of sold units — EVER. It even surpassed the 17.4 mark in 2000 and favorably outpacing 12.6 million in EU and just 1.3 down in Mexico. We buy more cars in the United States than most other countries across the world. But when comparing to our population (318.9 million) that means that just 5.5% of the population bought a new car last year. Breaking that up by month, that’s just 0.4% of the population is in-market to buy a car any sales cycle.


The Average Dealership Budget Just Doesn’t Add Up

That 0.4% is a very interesting statistic, considering that the majority of a dealership’s budget is allocated to go after the entire market using traditional media. Consider this breakdown in advertising expenditures in 2015 by medium for the average dealership, according to NADA statistics.

  • TV – 23.7%
  • Radio – 16.1%
  • Newspaper – 13.9%
  • Direct Mail – 9.8%
  • Other – 8.7%
  • Internet – 27.8%

There are a couple things that bother me about setting up a budget in today’s world with this kind of spread.

FIRST … They lump Internet into just one category. It would be much more informative to break it out into several different categories (search engine optimization, search engine marketing, social media, third party websites, online reputation management among others).

BUT MY LARGEST FRUSTRATION … The significant portion of this budget is going towards the more than 99% of the population who is not in-market any given month through traditional media.

I’m certainly not saying that traditional media does not have its place in Tier 3 and local businesses. In many cases with the some of the higher volume dealerships, it can be a very effective channel to create mass awareness and reinforce brand images. Building an advertising plan with these percentages and not putting the focus on creating unique and personalized experiences for the people who are raising their hands and telling us they are looking to purchase now means that many dealerships en masse are likely wasting dollars.

There is a tremendous potential to decrease overall spends to much more heavily target (“introducing”) the Now Buyers.

Dealerships across the country have seen gross margins fall from 14.5% in 2010 to just 13% in 2015. One of the best opportunities to reverse this trend is to trim the fat and put a greater percent of their marketing spend towards these Now Buyers.


Introducing the Now Buyer

What do I mean by the Now Buyers?

I’m talking about the 0.4% of the population that is in-market any given month to buy a new car, of which only a portion of that are open to purchase the specific brands that dealers are offering.

Let’s take a look at how they are shopping and build a marketing plan around their behaviors and how we can best influence them. A Millward Brown Digital and Google study from 2013 shows that, on average, consumers are using 24 different touch points; a 2015 study showed shoppers spending 16.75 total hours online as they make their decisions.

In 2005, consumers went to 5 different dealerships to kick tires and decide what to buy, but the vast majority are now going to just 1 or 2 dealerships because they have made their decision online. This is where the opportunity lies to best focus your marketing efforts at the local level: targeting these people with tailored messaging and much heavier frequency than can be afforded through traditional channels as they make their way through their long research journey.

Even further reinforcement for this can be seen in a recent eMarketer study that projects the average person spends 5:43 hours online each day, compared to 4:03 on TV, 1:27 listening to the radio, and just 0:16 reading the newspaper.


Build Your 2017 Marketing Plan Around the Now Buyer

So how can owners build out a plan that capitalizes on this philosophy? Let’s look at a step-by-step process for how to best build out a plan that will create growth and success moving into the New Year by influencing the Now Buyers as frequently as possible and in every step of their shopping journey.

These are the steps I would recommend to all dealership decision-makers when building their 2017 plans.

  1. Start with your website. Spend the money here to build a highly converting and effective site and use the data generated from your site to ensure it’s working. What are the goals of your website? In Google Analytics, be sure that you are measuring not just clicks to the site, but the number of people who are performing shopping behavior actions – mobile phone calls, lead submissions, inventory viewed (vehicle detail page views), chats and texts initiated, finance and trade appraisal forms, service appointments scheduled and more. If you don’t know or have a purpose for your website, then all of the other activities driving traffic there will never be as effective.
  2. Drive traffic to the site. People are going into Google and searching for the many products and services that you offer and that data is readily available. Using tools from Google,, SEMRush, SpyFu and others you can determine what people want in your market. Use this information, create specific content around those types of things through an aggressive content marketing strategy and drive traffic to it through SEO and SEM. Be sure that you are measuring site conversion through all channels driving traffic to your site.
  3. Couple your SEO with your content marketing strategy. If you are not doing this, then you are likely losing out on many of these Now Buyers because you are often not showing up in the types of searches where people are looking for your vehicles or services. Gone are the days where SEO meant that you would build up your homepage with a ton of words and just hope it would rank for in-market searches. Technical SEO is still just as important as ever. Create consistent online directories, acquire links from other websites, update the copy, meta and H1s on your site, fix broken links, and (especially with some of the mandated websites in the automotive industry) work on your page speed. Make your website experience unique to all the different types of people who are potential buyers and either hire designers, content writers, developers, and SEO specialists or find a digital marketing agency who can help you grow your presence here. Focus on organic traffic growth, keyword rankings and content opportunities.
  4. Couple your SEO efforts with SEM (paid search). You can use the same in-market data that powers your content strategy, and you can send people through paid search directly to the same types of pages you have created. Done correctly, you should convert this traffic with the same level of success as SEO. Be sure that your SEM strategy or provider is building hundreds of ad groups and keywords to be as specific as possible towards matching the customer’s intent with the messaging. Quality score significantly impacts your spend efficiency as paid search is an auction, so be sure that you are not creating wasted spend here by deep-linking directly to associated content and use as many extensions and multiple ads to generate higher click-through-rates (these two things make up about 80% of that quality score). The higher your quality score, the less you have to pay for your position, one of Google’s most ingenious strategies to reward the best marketers and also generate more trust and clicks from consumers. Focus on cost-per-shopping-engagements, impression share, and quality score.
  5. Be found on third party sites. People are using them to shop for vehicles, but be sure to measure the results and be wary of some of the aggressive sales tactics often used to pit dealers against one another. Just like on your website, the biggest opportunity here is to measure your vehicle merchandising and ensure that all of your cars have photos (new and used), are properly priced, and have descriptions showcasing all of the value elements of each car. Focus on merchandising key performance metrics, cost per vehicles viewed, percentage of inventory viewed and cost per lead.
  6. Stimulate interest to in-market shoppers. Using social media and video preroll, you can target your budget around prospects who lie within your customer database or are in-market based on a number of different data points (like Polk). Target sedan shoppers versus truck shoppers, target the brands that you are selling or create conquest messaging to drive people to your brand, or go after people within your database who haven’t serviced in months or have expiring leases. The data points are endless, and where so many fall short is in not creating campaigns unique enough around specific types of people. Focus on audience targeting, frequency, engagements and cost per shopping behaviors.


There is a lot to consider here, and I will close with perhaps the most compelling case yet to build the 2017 marketing plan around Now Buyers …

The average person sees more than 10,000 ads per month and actually takes note of approximately 4,500 of those. Consider the frequency of message that the traditional media spends often create on the local level. Both in my former days as a Media Buyer managing millions of dollars annually for a large 33-store dealer group and currently as I work with dealers on their budgets, I often see traditional media spends hitting the majority of the market costing tens of thousands of dollars creating a frequency of 3.0 to less than 10.0.

How effective is a TV spot that hits someone 3 times in a month compared to 10,000 ads in that time to an audience of which 99% are not readily in-market?

Most local dealers have brand messaging reinforced by manufacturer buys that create brand awareness for the core series makes and models. Those budgets are, in most cases, so much larger and are in programming the highest ratings and audiences. Most dealers build TV campaigns largely in the local news and in syndication, where truly achieving a reach and frequency that will create stimulus and impact is difficult — and those dollars can be much more effective focusing on the Now Buyer.

The average dealer spent 27.8% of his or her budget around these in-market shoppers last year. Moving into next year, I challenge all decision-makers to move past the average dealership marketing plan and focus on the true opportunity in today’s digital first world.

A Final Callout to Our Dealer Friends to Grow Your Business in 2017

We are always interested in helping out potential partners and are very happy to give feedback on 2017 budgets, and we always offer a free digital marketing analysis to anyone interested. As  you allocate your 2017 advertising know that your entire budget is being utilized to its fullest efficiency. In 2017, focus more of your action plan around the 0.4% of the population that are in-market and buying vehicles. In 2017 build a robust marketing strategy around the Now Buyer.

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