COMMENT: Advertising prices are falling on social networks – Are you taking advantage of this to gain market share?



The limited supply of vehicles and increased consumer demand does not mean dealerships should opt out of advertising.

Dealers should stay focused on a few key strategies, such as changing ad spend to make it easier to acquire inventory instead of acquiring customers – or identifying which cars stay on the lot longer than others. It also means they need to focus on eliminating unnecessary spending, especially as digital advertising prices in key areas have started to drop.

It’s easy for dealerships to see an increase in demand and think, “OK, this worked; Now we can stop our ad spending. All of this will only give their competitors a significant advantage in running the whole business.

Advertising dollars are getting more competitive, so think smarter

Over the past decade, dealers have steadily increased their spending on digital media such as paid search, social media, and video. As more and more advertisers competed for the same “digital real estate,” the cost of advertisements also steadily increased.

Everything changed as the pandemic set in and dealerships closed; the costs, especially on Facebook / social media, have dropped significantly. However, in the summer of 2020, when the bottlenecks started to lift and dealers felt a rapid rebound, advertising rebounded again and as a result costs started to rise again.

However, with inventory issues from the chip shortage lingering through 2021 and beyond, advertisers have once again pulled out, opening the door for those enthusiastic resellers who can once again benefit from falling advertising costs on social platforms.

Successful dealers are seizing this opportunity and have identified areas of digital advertising where their money can go further, such as social media. The main difference is that these dealerships are changing their messaging to focus on service and repairs, as well as inventory acquisition offers (we’ll buy your car).

Many dealers who did not seize this opportunity fall into the trap of sticking with traditional advertising strategies, and this unnecessary expense is a blind spot for hundreds if not thousands of dealers across the country.

Overcoming Blind Spots: Eliminating Media Waste

Reducing advertising waste is a key element in increasing dealer profitability. It is estimated that the auto industry will spend around $ 13.4 billion on digital advertising, and nearly 40% of that spending will be ineffective due to bad strategy, bad data, or both, as reported in “Blind Spots : A Guide to Eliminate Today’s Automotive Digital Media Waste ”, by PureCars Founder and CEO Jeremy Anspach.

When applied to cost per sale, this often leaves dealerships paying hundreds of dollars more to sell a car than their competitors online and leaves them handicapped in their ability to compete effectively.

Today’s advanced advertising data and marketing technology help dealers track and capture demand by identifying vehicles they need to aggressively market, target markets to market to, and media channels who will be most effective in reaching those markets, all with the goal of optimizing at the lowest cost per sale and RO, rather than vanity metrics like cost per click and volume of impressions.

Focus on the right marketing investments

The exploitation of advanced data and marketing technologies can help dealers make the right marketing investments in the sale and maintenance of new and used cars, but also in identifying and acquiring the right vehicles from them. opportunity directly to consumers, where they can better maximize their profits.

Data mining helps dealerships easily identify – on a daily basis – which new vehicles in inventory require more or less marketing investment, as well as provide insight into the right media mix models to generate the most effective returns.

Automotive groups that identify and adjust their media mix across search, social media, streaming TV, and traditional media channels can often realize millions of dollars in efficiency gains that go directly to profitability.

Today’s most progressive dealerships are activating creativity, a new way to source used cars, and with auctions at a high price, buying directly from consumers who live in their neighborhood has become a way attractive to build relationships with customers and surpass the acquisition of competing vehicles in a sustainable manner. manner. This strategy is here to stay.

By first leveraging the supply of market days, field market days, and scarcity information, dealers can determine which vehicles are most likely to sell quickly and at a higher price on the market. their market. Dealers then activate multi-channel ads with the message “We will buy your car” or “$ 1,500 more than the book value of Kelley Blue for your business” to attract more consumers.

Today’s successful dealers are leveraging a more scientific approach with sophisticated marketing technologies to more closely align their strategies with those of retailers who have perfected the art of digital advertising. This combination means that dealers are looking at their advertising strategies in a unique way, reallocating investments rather than relying on traditional practices.

Jeff Allen has worked in the automotive industry for over 20 years and has been at the forefront of transforming buyer data into insight on all three levels of the automobile. Prior to joining PureCars, Jeff was chief analytics officer at 22Squared, working directly with Southeast Toyota and major retail brands to improve their bottom line. Today he is the vice president of CX for PureCars, working internally and externally with customers to remove blind spots in order to achieve performance. For more information, please visit


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