Car dealerships benefit from nimble advertising partners


As the government attempts to contain inflation by raising interest rates, many in the auto industry are caught between strong consumer demand and the “what if” of an impending economic downturn.

Even though consumer spending fell slightly, car buyers continued to scroll through dealership lots, keeping vehicle inventories extremely tight. This has led auto executives to believe they are still confident that consumer demand will remain strong through the final quarter of 2022, in hopes that supply chain disruptions will finally ease. in 2023.

Recent history has only added to this mood. A backlog from customers, low dealer inventories and car buyers paying higher prices for vehicles led to several profitable quarters for most automakers and dealers. This protracted cadence of profit remained even as the United States suffered two consecutive quarters of declining GDP, the technical sign of a recession. All of this has fueled an aura of optimism that the industry will weather any potential economic downturn over the coming quarters.

However, will times change in the coming months?

In terms of gross volume, September’s sales of 1.11 million represent a 1.0% decline from August’s 1.12 million, according to data from Wards Intelligence. Based on daily sell rates, September – with 25 selling days – rose 2.9% to a DSR of 44,490 from August’s 43,231 (26 selling days).

Industry watchers are seeing the first signs of increased incentives for buyers — something automakers haven’t had to increase in recent years due to strong demand. August premiums were up 9% from July premium activity.

Combined with the Fed’s continued interest rate hikes and growing concern over a tightening labor market, consumer spending could slow, dragging auto sales down with it.

Better data to make smarter advertising decisions

Today’s dealerships and OEM brands have the luxury of leveraging advanced data, real-time tools, and sophisticated resources to make faster, more informed pivots in their advertising strategies. The days of “set it and forget it” advertising are long gone, where dealerships worked with partner advertising agencies to set their advertising strategies to run continuously for months at a time. , taking advantage of economies of scale from buyers and mass advertising packages.

The advertising industry is smarter and more competitive these days. Dealerships need a trusted advisor to navigate and succeed in this complex environment.

Focus on the right marketing investments

Leveraging advanced data and marketing technologies can help dealerships make the right marketing investments, like making quick pivots in messaging from inventory acquisition (when consumer demand is high) to customer acquisition (when the economy cools and incentives kick in).

Data review helps dealers easily identify – on a day-to-day basis – which in-stock vehicles need more or less marketing investment, as well as provide insight into the right media mix for models to deliver 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 efficiencies that go directly to enhanced profitability.

Smart dealerships and partner agencies leveraged technology to make quick, smart and efficient pivots when the pandemic hit, quickly adapting advertising messages to emphasize cleanliness, contactless shopping and messages of service and repair. The same technology and decision-making should be reviewed at the first signs of a downturn (such as increased incentives and slowing sales activity). And this messaging can be monitored and moved weekly or even daily in some markets.

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

Stephane Ferri (photo, top left) is the CEO of PureCars, an Atlanta-based provider of digital marketing technology and services for automotive dealerships.


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