Using Performance Metrics to Evaluate Digital Advertising
Displaying the right ads to an in-market audience that is interested in the VINs a dealer is selling will always be more effective than producing many ads promoting a wide variety of vehicles.
September 5, 2023
The auto sales process is constantly changing and, alongside it, the digital advertising landscape evolves.
As dealers promote vehicles across an array of platforms, it’s important to understand metrics that are worth tracking and that no longer help the sales strategy.
The most successful dealers are those who think through the entire customer purchase journey and look to pull the levers that actually help sell cars. Dealers’ focus should be on metrics that tell them how quickly a vehicle will sell as opposed to metrics related to views and website traffic.
Dealer - used car banner_2
As dealers make the switch, it’s essential they understand the context of the metrics they traditionally tracked, as many are losing relevance due to changes in the digital realm. Dealers traditionally track the following metrics:Click-through rate is a commonly used metric but does not provide a picture of campaign effectiveness. Not all click-throughs are sales-related; sometimes customers click an ad because they like the look of a model or are trying to find services the dealer offers.
Leads are another metric many dealers focus on, but more leads do not necessarily translate to sales. Leads need to be nurtured. It’s more important for dealers to address each lead that comes in; understanding where customers are in their purchasing journey allows dealers to provide relevant information and create a positive touchpoint that customers will remember when they’re ready to buy.
Finally, not all advertising is created equal. Bigger budgets spread across a variety of platforms are not always the best solution. Simply tracking leads gives little to no indication about actual sales or return on investment. There are tools available that can help dealers identify where their target audience is most active as well as shoppers on these platforms who are ready to purchase.
Once dealers no longer focus on digital advertising metrics that don’t provide real insight, it’s time to adjust the ads themselves. The most effective digital advertising focuses on quality over quantity. Each vehicle attracts a different group of consumers. It makes sense, then, that different vehicles require different advertising approaches and budgets.
The most effective method is a strategic approach that goes so far as to adjust advertising based on each unique VIN. Displaying the right ads to an in-market audience interested in the VINs a dealer is selling will always be more effective than producing many ads promoting a wide variety of vehicles. Dealers who track shopper engagement and purchase readiness as key metrics can then use the data to inform their advertising decisions, saving time and effort by avoiding a blanket approach. Understanding this helps dealers promote the right message at the right time.
Keeping in mind the context of metrics and focusing on quality over quantity are great starting points when developing a digital advertising campaign. However, dealers can’t just sit back and wait for results to roll in. Successful digital advertising requires ongoing monitoring, optimization and adjustments.
Because the market can fluctuate quickly, it is important to constantly evaluate progress and shift accordingly. The beauty of digital advertising is that it can offer quick metrics and results; however, dealers must keep in mind that continuous improvement is necessary to achieve success in the long run.
These changes offer a new, more effective way to evaluate digital advertising and adjust it as needed. Every dollar is precious, and advertising plans need to be tracked diligently to be as effective as possible.
Suzanne Reimer
The changes also support a more holistic dealer mindset and highlight the importance of thinking through the entire consumer purchase journey. Eventually, artificial intelligence and machine learning tools will help dealers evaluate results, understand best practices and adjust as necessary.In the meantime, dealers who stay ahead of changes by updating their digital advertising strategy as opportunities evolve will ultimately see the most success.
Suzanne Reimer (pictured, above left) is vice president of customer acquisition and marketing at Lotlinx, a provider of VIN-specific solutions for inventory management in automotive retailing.
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