The amount of wasted spending on digital advertising can vary significantly depending on various factors such as the targeting accuracy of the campaigns, the effectiveness of ad creative, ad fraud, and the specific goals of the advertisers. Estimates of wasted spending in digital advertising typically range from 30% to 80%.
At Lotlinx, our data suggests that 80% of automotive dealership media dollars are wasted. A strong marketing strategy for your car dealership is critical to dealing with these issues and cutting down on wasted advertising money.
The Factors That Contribute to Wasted Ad Spending:
- Ad Fraud: This includes non-human traffic (bots), fraudulent clicks, and other fraudulent activity designed to inflate ad performance metrics artificially.
- Ineffective Targeting: Ads may be served to the wrong audience or poorly targeted segments, resulting in wasted impressions and clicks.
- Ad Blocking: Users increasingly employ ad-blocking software, which means ads are not seen by the intended audience.
- Ad Viewability: Not all served ads are actually viewed by users, leading to wasted impressions. Poor Ad Creative: Low-quality or irrelevant ad creative may fail to engage the audience effectively, leading to wasted spending on impressions and clicks that don’t convert.
- Attribution Challenges: Difficulty in accurately attributing conversions and sales to specific advertising channels can lead to inefficient spending.
How Can Dealers Shape Up Their Ad Spending?
Advertisers continually work to reduce wasted spending through better targeting, improved ad creative, fraud detection measures, and optimization techniques, including focusing on KPIs (Key Performance Indicators) for automotive dealerships. This requires a detailed analysis of outcomes and the application of AI and machine learning in automotive marketing software.
However, despite these efforts, some level of wasted spending is inherent in digital advertising due to its technological complexity. See our seven strategies below to optimize your automotive dealership marketing.
1. Define Clear Advertising Objectives
Set up specific objectives of what you are trying to achieve with your advertising. Is it for brand recognition, promoting sales, or improving a key performance indicator (KPI) for your automotive dealership?
2. Tailor Your Message for the Buyer’s Journey
Once you identify your objectives, ensure you have the right message for the right buyer purchasing stage.
3. Utilize Advanced Data Analytics
Leverage the partner that uses machine learning to help build the right audience. There is a lot of bad data out there. Make sure you are leveraging data that aligns with your desired outcomes.
4. Implement A/B Testing for Optimization
Set up A/B tests to test creative and targeting. Testing is vital to perfecting audiences and creatives.
5. Focus on Sales as a Key Metric
Measure against sales, not impressions or engagement.
6. Optimize Vehicle Detail Pages (VDPs)
Ensure your VDPs are optimized with high-quality images of the inside and outside of the car, have all features and pricing information, are mobile-friendly, are interactive, etc.
7. Enhance Lead Response Efficiency
Make sure to respond to leads quickly with personalization.
The Bottom Line
Misused advertising budgets can dampen return on investment. Yet, by employing the right targeting, optimization, fraud prevention, measurement, and technology strategies, digital advertising teams can greatly improve campaign performance. Adopting these tactics allows you to maximize your ad spend and achieve superior outcomes from all your automotive dealership marketing efforts.
At Lotlinx, we have harnessed inventory and media data for the last ten years. This means our machine-learning model has been optimizing and learning for over a decade. Our automotive inventory solutions approach inventory media at the VIN level to ensure that VINS that need exposure are getting it.