In a tight market, counting the pennies will pay dividends

As the market for new vehicles tightens and the economic outlook is uncertain, making sure that every pound spent on bringing customers to the forecourt should be the primary focus of every automotive retailer.

Digital advertising has boomed over the last decade thanks to a laser focus on return on investment from the previous recession. The accountability of search engine marketing and digital display advertising allowed a more direct correlation to be drawn from pound spent and vehicle sold.

Technology has moved on in the last 10 years and social media has become the primary media platform in most people’s lives. Advertising on social media allows the individual purchase journey to be tracked against the advertising pound.

According to the Internet Advertising Bureau mobile accounts for 43% of digital advertising with year-on-year growth of 38%. It now accounts for 57% of all display ad spend, 70% of video spend, and 83% of social media spend.

People love watching online video and advertisers have followed them. More money is now spent on video ads than banner ads. Video now accounts for 35% of all spend going on display advertising. Social media is at the heart of this growth with spending on social feeds doubling, accounting for £363m.

Digital ad spend rose to 13.8% to £5.56bn in the first half of 2017. The exponential growth looks set to continue as platforms like Facebook expand as media and shopping platforms.

Some recent research by us at Radar Video showed that 42% of the largest dealer groups are wasting budget on Facebook by not using the platform’s tracking capabilities.

The study shows that while most dealers have a Facebook page and advertise on the social network, only six out of ten use a Facebook Pixel, which allows companies to track individuals who click on ads and serve them bespoke offers.

Retargeting on Facebook allows brands to target buyers with tailored offers, which maximises sales and the return on marketing investment.

Dealers must engage one-to-one with social media audiences, and the dominance of video means it’s more important than ever to grab interest with impactful content. The cost of production is dropped to such a level that each dealership can personalise its content for local audiences, with real-time and highly targeted offers.

It’s estimated that by 2019, 80% of the world’s consumer internet traffic will be video, while Reuters predicts that video viewership will account for 70% of mobile network traffic, growing 14-fold within the next five years.

Is it time for a social media first advertising strategy?

Amazon and eBay report that adding a video ad increases the propensity to buy by up to 35%. And according to recent reports, Google and Facebook will account for more than 70% of all money spent on display advertising online in the UK by 2020.

Consumers of all ages live their lives on Facebook. They research their next purchase, ask friends for recommendations and watch videos of their prospective purchases. If a dealership doesn’t have a social media advertising and content engagement strategy at the heart of its marketing plan, it is missing opportunities.

Derek Blair is the founder of Radar Video

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