In today’s competitive automotive market, marketing has become a balancing act for dealers. On this episode of Inside Automotive, John Fitzpatrick, CEO of Force Marketing, joins us to discuss how dealers are grappling with rising media costs, prolonged consumer decision-making processes, and the ever-present challenge of getting more from their marketing dollars.
Key Takeaways
1. John Fitzpatrick explains that media costs have risen 10-15%, impacting dealer profitability. A single click in digital marketing has jumped from $6 to $8. This inflation means dealers pay significantly more to reach and convert buyers, making every marketing dollar more critical than ever. Additionally, the rise in costs is not just a result of increased competition but also the inflationary environment affecting all sectors.
2. Consumers now spend more time in the buying process, tripling the traditional purchasing timeline. Factors like new EV options, fluctuating interest rates, and external economic uncertainties have made car buyers more cautious, increasing costs for dealers who must engage them longer.
3. Many dealers are debating whether marketing should be considered an expense to be reduced or an investment to be increased. Fitzpatrick emphasizes that marketing should always be seen as an investment, particularly during challenging times. Dealers who maintain or even increase their spending during slowdowns are more likely to gain a larger market share. This contemplation of marketing budgets is crucial, especially when profitability is down. Dealers who resist the temptation to reduce marketing during downturns can gain an advantage, as they can capture more demand from less aggressive competitors.
4. Furthermore, Fitzpatrick advises dealers to review their marketing spending and utilize data to optimize their advertising budgets. He urges dealers to assess each line item for its return on investment (ROI) and recommends reallocating funds from underperforming channels to those that yield better results. With increasing costs, dealers must delve deeper into their marketing analytics. Fitzpatrick emphasizes the significance of moving money away from channels that do not provide good ROI and redirecting it into high-performing areas – such as adjusting funds between Google and Meta ads based on performance.
5. Nevertheless, Fitzpatrick advises that it’s important to integrate marketing data with the dealership’s Customer Relationship Management (CRM) system. This integration allows dealers to monitor which marketing efforts are generating leads that convert, providing more accurate attribution and better decision-making regarding ad spend. While many dealers concentrate on vanity metrics such as cost per click, bounce rate, or click-through rate, these metrics don’t always reflect the true effectiveness of a campaign. By linking marketing activities to the CRM and focusing on closing percentages, dealers can better understand which leads are valuable and which campaigns are worth pursuing.
“One thing we're realizing is that the consumer is looking for a monthly payment more than they're looking for a vehicle... it costs marketers more money to connect with that consumer because they're staying in the market longer.” – John Fitzpatrick.
