Digital Budget Vs Traditional

[Tori Flavell]

I'm currently discussing advertising budgets with my general manager and dealership owner. In order to help validate my point that we need more funds allocated for our digital budget I was wondering if anyone could give insights on their budget. I'm mainly looking for TV, Radio, Newspaper VS Digital spend.

 

[Alexander Lau]

Are you looking for a reason to switch or actual %'s? The articles below I had saved to try and convince dealers of their need to switch the majority of their budgets to digital. Granted, this is a generalization. You might be a dealer that supports an older demographic and traditional might convert through the roof. Most budgets I see are at the very least 75% digital and 25% traditional, with digital on the rise.

Change in digital marketing spending and traditional advertising according to CMOs in the United States from 2012 to 2018
https://www.statista.com/statistics...arketing-budget-change-according-to-cmos-usa/

Shifting to Digital, Mobile
http://streetfightmag.com/2016/08/15/automotive-marketing-is-experiencing-a-massive-digital-revamp/
The heavy shift to digital — dealers already spend over 60% of their media budget online — will be a blow to publishers who aren’t participating. Borrell’s survey of auto dealers reveals they’re cutting back on traditional media far faster than other local businesses.

As with most digital marketing, mobile is playing an increasingly dominant role in car sales. The location analytics company Placed did a study showing that eight out of ten car shoppers used smartphones while researching, and over 60% did so while physically at a dealership. In response to this trend, auto site Cars.comintroduced in March a Lot Insights Report for advertisers that uses geo-fencing to better understand shopper behavior at and around dealerships. Cars.com readers who opt in are tracked before and after lot visits, contributing data in aggregate to help with media planning and buying.

Digital Advertising Strategies On The Rise For The Automotive Industry
http://www.v12data.com/blog/digital-advertising-strategies-on-the-rise-for-the-automotive-industry/
The US Automotive industry is in the midst of robust spending on digital advertising and marketing. In a report by eMarketer, consistent double-digit growth in digital ad spending is forecasted for the auto industry through 2020.

 

[Jeff Kershner]

I'm currently discussing advertising budgets with my general manager and dealership owner. In order to help validate my point that we need more funds allocated for our digital budget I was wondering if anyone could give insights on their budget. I'm mainly looking for TV, Radio, Newspaper VS Digital spend.

@Tori Flavell - first off, thanks for joining the DR community. We welcome you.

Secondly, to help us better answer your question, what's your current budget allocation between Traditional and Digital?

Some items you may want to consider...

1. Location/GEO
2. Manufacture/Ford
3. Popular models

All in all, it's a loaded question. It's easy to lean more towards digital, but without knowing your true Demo and Geo, it's not always black and white. At least, not yet.

 

[Tori Flavell]

Are you looking for a reason to switch or actual %'s? The articles below I had saved to try and convince dealers of their need to switch the majority of their budgets to digital. Granted, this is a generalization. You might be a dealer that supports an older demographic and traditional might convert through the roof. Most budgets I see are at the very least 75% digital and 25% traditional, with digital on the rise.

Change in digital marketing spending and traditional advertising according to CMOs in the United States from 2012 to 2018
https://www.statista.com/statistics...arketing-budget-change-according-to-cmos-usa/

Shifting to Digital, Mobile
http://streetfightmag.com/2016/08/15/automotive-marketing-is-experiencing-a-massive-digital-revamp/
The heavy shift to digital — dealers already spend over 60% of their media budget online — will be a blow to publishers who aren’t participating. Borrell’s survey of auto dealers reveals they’re cutting back on traditional media far faster than other local businesses.

As with most digital marketing, mobile is playing an increasingly dominant role in car sales. The location analytics company Placed did a study showing that eight out of ten car shoppers used smartphones while researching, and over 60% did so while physically at a dealership. In response to this trend, auto site Cars.comintroduced in March a Lot Insights Report for advertisers that uses geo-fencing to better understand shopper behavior at and around dealerships. Cars.com readers who opt in are tracked before and after lot visits, contributing data in aggregate to help with media planning and buying.

Digital Advertising Strategies On The Rise For The Automotive Industry
http://www.v12data.com/blog/digital-advertising-strategies-on-the-rise-for-the-automotive-industry/
The US Automotive industry is in the midst of robust spending on digital advertising and marketing. In a report by eMarketer, consistent double-digit growth in digital ad spending is forecasted for the auto industry through 2020.

 

[Tori Flavell]

Thank you! This helps a lot. I'm in the process of trying to convince them that we need more money in our digital budget and any information I can get from other people in the industry will help back my claims.

 

[Tori Flavell]

@Tori Flavell - first off, thanks for joining the DR community. We welcome you.

Secondly, to help us better answer your question, what's your current budget allocation between Traditional and Digital?

Some items you may want to consider...

1. Location/GEO
2. Manufacture/Ford
3. Popular models

All in all, it's a loaded question. It's easy to lean more towards digital, but without knowing your true Demo and Geo, it's not always black and white. At least, not yet.

I have tried to get exact numbers on what we are spending for traditional, but have not received them. What I do know is that we are spending at least 250% more on traditional (radio, TV, newspaper) compared to our digital budget which is under 1500 for a 200+ vehicle dealership.

 

[Alexander Lau]

I have tried to get exact numbers on what we are spending for traditional, but have not received them. What I do know is that we are spending at least 250% more on traditional (radio, TV, newspaper) compared to our digital budget which is under 1500 for a 200+ vehicle dealership.

They're making a mistake, not that it's an uncommon one. Here's another article to support you.

Traditional Versus Digital: The Debate Stops Here
http://www.autosuccessonline.com/traditional-versus-digital-debate-stops/
This is especially true given the fact studies show it costs approximately $150 of digital marketing to sell one car compared to $1,581 — more than 10 times — in traditional media spending.

Commit 80 Percent to Digital, 20 Percent to Targeted Traditional Campaigns
Commit the bulk of your annual marketing budget, about 80 percent, to digital and third-party leads. When done right, it’s affordable, effective, easy to measure and helps you reach local customers beyond your efforts right where, and when, you want them — online, while they’re researching their next vehicle purchase. Dedicate roughly 20 percent of your annual marketing budget to strategic traditional campaigns, such as sports broadcasts (where local viewers tune in live at the same time) or ever-popular live and local news broadcasts. Lulls in regional dealer association advertising campaigns are opportune times.

 

[Tori Flavell]

They're making a mistake, not that it's an uncommon one. Here's another article to support you.

Traditional Versus Digital: The Debate Stops Here
http://www.autosuccessonline.com/traditional-versus-digital-debate-stops/
This is especially true given the fact studies show it costs approximately $150 of digital marketing to sell one car compared to $1,581 — more than 10 times — in traditional media spending.

Commit 80 Percent to Digital, 20 Percent to Targeted Traditional Campaigns
Commit the bulk of your annual marketing budget, about 80 percent, to digital and third-party leads. When done right, it’s affordable, effective, easy to measure and helps you reach local customers beyond your efforts right where, and when, you want them — online, while they’re researching their next vehicle purchase. Dedicate roughly 20 percent of your annual marketing budget to strategic traditional campaigns, such as sports broadcasts (where local viewers tune in live at the same time) or ever-popular live and local news broadcasts. Lulls in regional dealer association advertising campaigns are opportune times.

Thank you! These articles are very helpful for my case!

 

[Rick Buffkin]

@Tori Flavell Have you reached out to your OEM and asked for their recommendations yet? That may give you more bargaining power with the GM & DP. Most of the OEM's have purposed budget allocation recommendations. Most domestic OEM's have a digital marketing CO-OP program as well. I would research that and then build out a marketing plan using those recommendations to start with. Contact some of your local listings providers (AT, Cars, Cargurus, etc..) and get some of their projections they can offer you with diff budgets and what they offer in terms of CO-OP benefits. Give the GM & DP some type of forecast numbers. Do your homework with the data from your website. Look at your site conversions %. Lead closing % from your CRM. Look at the the total site visits and compare that to logged traffic in the CRM. See if you can see common trends between website traffic, floor traffic and sales.

There's two ways you can approach this:

A) Boss, we need to increase our Digital marketing budget because these automotive websites say we should be spending this much on Digital marketing.

B) Boss, we need to increase our Digital marketing budget because, looking at the data thats available to us, x month we had xx site traffic and xx floor traffic. The site traffic, floor traffic and monthly sales trends are in sync. Speaking with our OEM rep, our Manufacture actually recommends to allocate this % of advertising $$$ towards our Digital footprint. Also, by spending x % in digital the OEM is going to match that spend by x % to help us. Speaking with our local listings providers, we can spread our Digital footprint in our PMA by spending $$$ here, $$$ here and $$$ here. For the Fixed Op's side of the house, we can also increase service drive revenue as well by casting a dedicated digital net in that area as well. This % is what the Manufacture recommends spending on Digital for Fixed Ops.

(Sorry, I kinda got off on a crazy ass wild tangent in example B. LOL)

I'm sure you get it. Another really simple way to prove your point is to simply do an advertising average Cost per Sale. Break it apart for digital and then traditional. That should be able to tell them really quick where to allocate marketing $$$.

With the articles above. Trying to get someone who is big on traditional to go 80% digital and 20% traditional is gonna be darn near impossible. Me personally, I would shoot for something more like 40 - 60. 40% digital and 60% traditional to start. You gotta remember to, the traditional media partners your dealership has isn't going to let those funds go with out a fight! You need to be prepared for that argument!

 

[john.quinn]

#1 rule of advertising is: Fish where the fish are.

If the dealership is already catching fish, then the trick here is to show that you can save money on bait; you can reach the same audience, impact the same eyeballs, for less money. The "everyone else is doing it" argument isn't going to work.

I'd concentrate on your ad budget per-vehicle-retailed, find some solid examples where dealerships have been able to get that traditionally high $500ish per vehicle number down in the $300's or even lower. They're out there.