What Should My Car Dealer Be Spending On Facebook Advertising?

So while Facebook has been taking some heat lately over data sharing issues, it’s not going away. In fact Google and Facebook’s advertising are growing quickly (+103%!) at the expense of other digital platforms. They have the largest audiences and in a world of limited time and resources advertisers can only manage so many locations. The inevitable duopoly of Google and Facebook controlling content and advertising audiences is here to stay for a while so if you’re not on Facebook now, you should be.

According to NADA the average dealer spends about $64,000 per month on all advertising. Depending on your market, you should be spending at least half of that now in digital advertising (latest Google stats say 45%-75% should be digital).

Google search is still one of best places to spend your ad dollars, but it’s suggested that you migrate about a third of your digital ad budget to Facebook. So if you are spending around $25-30K think about migrating around $10K to Facebook. This will help your brand touch those consumers once a day. This will help lower your acquisition costs as there is less competition on Facebook for audiences so the click rate costs (CPCs) are lower.

A secondary budgeting tip is to allocate $1 per day per 1,000 audience you are trying to reach. For example if your dealership wants to expose its brand to 50k consumers near your dealership you’d need to spend about $50 a day or $1500 per month. This is a good place to start while you are setting up, and optimizing your marketing campaigns.

Wait … 50k consumers is a lot but there’s 500k within a 15 mile radius of my dealership. This is going to get expensive!

This is where the magic of digital advertising targeting really kicks in. Your dealership doesn’t need to reach everyone in your area. Just the consumers that are interested in buying a car and fit the targeting criteria your campaign specifies.

Utilize your own customer data to setup your audience in Facebook. This is known as a “lookalike” audience. Go to your CRM, export the data on your customers and then load it into Facebook’s ad manager. This will help you target only the consumers that are similar to your own customers.

Next Up The Ad Funnel

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Interstate National’s 360-degree solution leveraging dealer development, technology, reinsurance administration and product development maximizes a dealer’s profitability. Interstate deploys a proven sales approach to increase product performance & overall profitability of dealers while leaning on technology for streamlined efficiency and administration. At Interstate, our mission is to build and preserve relations with our community to protect every driver’s journey ahead.


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