Digital Dealer - May 2019 - 31

TRACKING THE BASIC METRICS IS USEFUL, BUT THE
REAL VALUE COMES FROM EVALUATING THE NUMBERS
AND UNDERSTANDING WHAT'S DRIVING THEM."
dealership.
Today a dealership's
online presence is its
virtual front door. How
customers arrive at that
front door - and how much
it costs to bring them there
- are fundamental metrics
that today's management
teams must understand.

COST PER
CONVERSION

Vendors of digital marketing services employ
dozens of specialized
metrics to track their
effectiveness, but the most
basic measurement most
CFOs want to understand
is cost per conversion (that
is, cost per lead) or cost
per opportunity. In other
words, how much does it
cost to attract an online
viewer who is willing to
take an active buying step,
such as submitting an
online information request
or making a call to the
dealership?
Beyond the overall cost
per lead, it's important
to understand the cost
per lead by each online
channel such as search
engine, social media,
display advertising, and
online video. For example,
one benchmark reported
by Wordstream, a leading
search engine marketing
software company, found
the average cost per
action (comparable to the
cost per lead) in the auto
industry was $33.52 using

Google Search Network advertising and $23.68 on the
Google Display Network.
Bear in mind that search
advertising and display advertising perform somewhat
different functions in the
sales cycle, so direct cost
comparisons tell only part
of the story. Yet benchmark
information such as this is
useful in determining which
channels are driving lead

leads typically is determined
by tracking the impression
share - that is, the number
of times an ad was in focus
in viewers' web browsers
for more than two seconds.
A dealer launching a new
digital campaign in a large
urban or suburban market
generally should expect to
achieve total impressions
in the six-figure range
within a few days of launch.

A DEALERSHIP'S
ONLINE PRESENCE IS
ITS VIRTUAL FRONT
DOOR. HOW CUSTOMERS
ARRIVE AT THAT FRONT
DOOR - AND HOW
MUCH IT COSTS TO
BRING THEM THERE
- ARE FUNDAMENTAL
METRICS THAT TODAY'S
MANAGEMENT TEAMS
MUST UNDERSTAND."
or conversion costs down
and which are driving them
up. It's also important to
track these numbers at
each individual franchise or
location over time, so when
the numbers start moving
in the wrong direction the
BDM or other executive can
take appropriate action.
VOLUME OF LEADS

The total volume of leads
is another important figure
dealers must consider to
determine if they are getting
viable scale. Volume of

Reaching this benchmark
could take longer in smaller
markets.
CONVERSION RATE

A third critical metric is
the conversion rate - the
percentage of site visitors
who actually take an active
buying step and become a
bona fide lead. According
to Wordstream, the average conversion rate across
all industries is 3.75% for
Google Search and 0.77
percent for Google Display.
The good news is that
D I G I TA L D E A L E R . C O M

the auto industry significantly outperforms other
industries, with an average
conversion rate of 6.03%
for Search and 1.19% for
Display. Display campaigns
generally are more effective
at driving awareness rather
than generating leads or
conversions.
Tracking the basic
metrics is useful, but the
real value comes from
evaluating the numbers
and understanding what's
driving them. For example,
a lagging conversion rate
could be a sign of pricing
issues or a program and
product offering that is
not aligned with the target
audience.
Conversely, if a digital
campaign is generating
both a high volume of leads
and a strong conversion
rate, it's important to dig
deeper and learn how many
of those viable leads are
turned into actual sales. If
the sales team is understaffed or unprepared for
a boost in volume, it can
become overwhelmed
and start to cherry-pick
which leads get worked.
When that happens, sales
revenues can stay flat,
regardless of how effective
the digital marketing effort
has been.
ACCESSING TIMELY,
ACCURATE DATA

Whoever works with
the various digital media

Continued on pg. 32

M AY 2 0 1 9

31
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Digital Dealer - May 2019

Table of Contents for the Digital Edition of Digital Dealer - May 2019
