“How much should my dealership spend on Facebook ads?”
This is the equivalent of a person asking, “How much should I weigh?” These questions are a telltale sign of problems. Just like a person’s health is more important than his or her weight alone, your marketing strategy can’t hinge solely on a budget.
The truth is, Facebook ads can be a tricky thing to pin down – especially with so many options at your fingertips. Here are some important questions to answer before asking about the budget:
- What is the expected measurable goal?
- Who is the specific audience?
- How will this campaign fit into a larger strategy?
No matter how much money you give to Big Blue, you’ll need to form some healthy habits to reach your store’s digital goals.
Relate your ads to sales.
In order to move the needle on sales, you’ll need to reverse-engineer the process, which isn’t as hard as it sounds.
For example, let’s say that your dealership wants to sell 10 more new cars per month. Let’s also say that your VDPs (vehicle detail pages) convert at 1% (one lead per 100 views), and if your lead closing ratio is 25% (one sale for every four leads). The math would look like this:
(v x 0.01) x 0.25 = 10 sales
To get 10 sales, your dealership will need 4,000 new VDP views.
Get the right 4,000 views.
Now that you have your goal in sight, use your sales cycle model to hone in on your audience. It’s one thing to get 4,000 views on a VDP, but it’s another to get 4,000 of the right views.
“How much should my dealership spend on Facebook ads? This is the equivalent of a person asking, ‘How much should I weigh?’ These questions are a telltale sign of problems.”
Subtle nuances in targeting will make or break the success of your Facebook ad.
Luckily, Facebook has partnered with Polk and Datalogix to integrate vehicle ownership data along with buying trends. Both of these partnerships allow you to hone in on people who are most likely to be interested in a certain brand or type of vehicle today.
For example, if you’re encouraging someone to learn more about the new truck model at your dealership, you can focus the targeting on people who are actually in the market for a new truck. Furthermore, you could run your ad to an audience of current truck owners, or people who are friends of people who like your page, who are also in the market for your brand of truck.
Narrowing the audience will allow you to conserve your budget while ensuring the quality of traffic visiting your trucks online.
Of course, certain Facebook targeting parameters will have a big impact on the cost of your ads. For example, targeting people in the middle of the funnel is more competitive, since your competitors are offering their products head-to-head with yours. People who are considering competitive models are a valuable audience, so your cost per click might be higher than if you targeted people who currently own your brand of truck.
If your goal is VDP views, tailoring your ads to more specific audiences is always more worthwhile than blasting a generic ad to a generic audience – especially if you’re trying to stay within a budget.
Speaking of budgets, if you’re setting out to get 4,000 VDP views, and you have up to $1,000 to spend on your ads, that means your ads will need to average $0.25 per click. The cost per click is easy to find and track within the Facebook Ads Manager or Power Editor platforms. You can either set this bid manually as you launch an ad, or you can tell Facebook to spend up to $1,000 within a certain timeframe.
Fit the campaign into a cycle.
When it comes to Facebook advertising strategy, rotation is key. Not only do we suggest trying various iterations of an ad, we also encourage you to rotate the intent.
For example, your new truck VDP ad may drive a bunch of traffic to a certain VDP, but if the person has never been to your store before, how will they know the difference between your franchise and the one down the road? Our job as Tier 3 marketers is to answer the “why buy here” and, better yet, “why buy here right now” questions that arise as people consider their next vehicle purchase. This branding message is a great companion for product-centric ads, and they can both be shown together in one carousel.
In addition, a 1% VDP conversion rate would mean that 99% of your traffic will go unconverted on the first visit. At our agency, we use a piece of website code to track visitors who view certain pages. With this method, we can then retarget VDP viewers who leave a dealer’s site and go back to Facebook. Timing is everything, and remarketing will gives dealers more chances to convert more VDP leads.
Test the targeting. Craft the content.
Stepping on a bathroom scale every day is scientifically proven to make weight loss more likely. The same concept applies to your Facebook advertising. And while it’s easy to compare your own body (i.e. Facebook ad performance) to your neighbor’s, it’s easier to set your own benchmark and improve upon it over time.
If you cringed at the prospect of reaching 4,000 new VDP views in one month, remember that this is just a hypothetical example. Maybe you don’t need to reach 10 new sales in one month. Starting with a goal of one sale is better than not tracking your Facebook ad performance at all. Simply knowing your VDP conversion rate and your closing ratio is a great first step toward success.
After you pick a goal, build an audience and engage your traffic in a measurable way, make sure to track your progress over time. Checking the performance of your Facebook ads is just like stepping on a scale every day; it will allow you to find the right audiences and create more high-quality leads for your sales team.
Author: John Nelson
John Nelson is the Creative Director at 9 Clouds, an inbound automotive digital marketing firm based in Sioux Falls, South Dakota.