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In the ever-evolving world of auto dealership marketing, understanding and managing advertising expenses is vital. Chapter 14 of the Senior Management’s Guide to Automotive Digital Marketing provides an in-depth analysis of marketing expense management, highlighting the seismic shifts in budget allocations and offering actionable strategies for today’s dealerships.
A Look Back: Marketing Spend Trends (2016 vs. 2023)
Between 2016 and 2023, auto dealerships experienced a transformative shift in their marketing strategies. According to data from the National Automobile Dealers Association (NADA):
2016: Average marketing spend per dealership was $588,000 annually.
2023: Despite inflation, this figure dropped to $529,000, showcasing improved resource efficiency.
This decrease signals a shift towards more cost-effective, measurable marketing methods.
The Digital Transformation in Marketing
One of the most notable changes is the pivot from traditional advertising channels (TV, radio, and print) to digital marketing. In 2016, only 34% of marketing budgets were allocated to digital efforts. By 2023, this number had skyrocketed to 72%, leaving legacy channels with just 28% of the pie.
Why Digital?
Consumer Behavior Shift: Most car buyers now start their research online, comparing prices, reading reviews, and exploring financing options before visiting a dealership.
Precision Targeting: Digital platforms enable dealerships to reach specific audiences through behavioral data (e.g., search history, interaction with auto content).
Measurability: Digital campaigns provide clear data on click-through rates, conversions, and ROI, allowing managers to adjust strategies dynamically.
Key Strategies for Managing Marketing Budgets
To make the most of their budgets, dealerships should consider:
First-Touch Attribution: This approach credits the initial marketing channel that introduced a customer to the dealership. It simplifies ROI analysis but may undervalue the role of subsequent touchpoints in the buying journey.
Integration of Data: Utilizing tools that connect marketing analytics with CRM systems allows dealerships to track customer interactions across channels, providing a clearer picture of campaign effectiveness.
Regular ROI Analysis: Monitoring expenses and returns on platforms like Google Ads, Facebook, and third-party listing services ensures that every dollar spent contributes to lead generation or sales.
The Balance Between Digital and Legacy Advertising
While digital marketing dominates, legacy channels still play a role. For instance, local TV or radio spots may help reinforce brand awareness in communities. Dealerships need to assess the ROI of each channel continually and strike a balance based on their target audience and market conditions.
Conclusion
Chapter 14 underscores the importance of adaptability in dealership marketing. The rise of digital platforms is not just a trend but a necessity. By prioritizing measurable, customer-centric campaigns, dealerships can optimize their budgets and achieve sustainable growth.
As marketing landscapes evolve, staying ahead of trends and leveraging data will ensure that your dealership not only survives but thrives. Are you ready to reimagine your marketing strategy for a digital-first world?
This blog post was just a short summary of a much more detailed chapter from the Senior Management’s Guide to Automotive Digital Marketing. This guide is a one stop shop for all things digital marketing in the dealership. Click below to see the full table of contents.
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