Are Car Dealers Spending Enough on Internet Marketing?

Internet Marketing vs. Traditional Marketing

When it comes to making the most out of your advertising budget, there is one key metric to look at: return on investment (ROI). ROI is a direct performance measurement of your advertising budget in terms of sales generated from various advertising media. Advertising on the Internet using a dealer website, Google Adwords, Craigslist and email marketing gives you a higher ROI on your advertising budget. These forms of marketing have low costs, are performance based, and come with powerful analytics to help you fine-tune your strategy. It also allows customers to interact with your online ads at any time of the day, so you can reach more people at a lower cost, compared to traditional media, which often requires higher costs to advertise at fixed intervals of time. With 90% of car buyers now turning to the Internet first to search for a car, it's shocking that the average car dealer allocated only 24% of their advertising budget for online marketing in 2010.

Measurable Performance: Get Powerful Metrics and Analytics Data

The main advantage of Internet advertising is the availability of measurable performance metrics and analytics data. Google Adwords, for example, gives you objective data on how well your search engine marketing campaigns are performing across different time scales and targeted locations. With Adwords, you only pay a "cost per click". when a person clicks on your ad displayed on the Google search network. You have complete control over how much you want to pay per click, and you can generate a lead for as low as $1. Listing cars on Craigslist and sending out emails to potential car buyers are two other advertising channels that cost nothing, yet come with precise analytics data to help you understand what works and what doesn.t so you can tweak the way you advertise to car buyers online.

The Paradigm Shift to Internet Advertising

With more people starting their car shopping online, car dealers are steadily shifting more of their marketing budget to the Internet. In 2001, auto dealers on average spent 3% of their ad budget for Internet marketing. This percentage rose to 11.5% in 2006 and 23.7% in 2010. Car buyers are obviously turning to the Internet to look for cars, and car dealers are gradually increasing how much they allocate to online advertising. A presentation by Morgan Stanley projects that advertising expenditure for Internet ads will overtake print ads by $2.9 billion in 2012.

As more customers are going online to shop for cars, dealers need to rapidly adapt to new Internet marketing opportunities. You can effectively strengthen your dealership brand and broaden the reach of your inventory by advertising on search engines, Craigslist and car buyer websites like AutoTrader. These sources have significantly lower costs, yet generate higher advertising budget ROIs. This is mainly because Internet marketing is scalable. When you advertise through traditional media like radio, television and newspapers, you face higher costs every time you want to make and distribute a new ad to potential customers. If you work with an Internet marketing provider to create a scalable online marketing campaign, you can easily update your new and used vehicle inventory, automate your Craigslist postings, and change your website within the day to reflect new special offers, all at very low rates.