Three Questions to Ask to Better Understand the ROI on Your Digital Ad Spend

Three Questions to Ask to Better Understand the ROI on Your Digital Ad Spend

August 25, 2016 – by Traci Will, Senior Director of Media Sales Analytics, CoxReps / Gamut via Digital Dealer

The automotive industry is no stranger to advertising. Auto dealers, in particular, tend to allocate sizeable portions of their marketing budget to ad buys. With the rise of digital platforms and evolution in consumption habits of consumers, more and more dealers are looking to the digital landscape to engage with potential car buyers. This spend is, of course, a means to generate traffic into showrooms and ultimately increase sales. So at the end of the day, it’s no surprise that dealers want to know: “how many cars did I sell as a result of my ad campaign?”

Traci Will, CoxReps and Gamut

Traci Will, Sr. Director of Media Sales Analytics, Gamut

The answer to that question, however, tends to disappoint many dealers. It remains quite difficult to tie sales back to ads for a few of reasons: there is often a delay, measurement can be expensive and the ads in a digital campaign reach the same consumers as television efforts.

Despite these challenges, there remain meaningful ways to track the impact of a digital campaign. While digital is far more measurable and easier to track than TV is, it remains difficult to capture exactly what happens when a customer sees an ad. Despite common misconception, a simple click on an ad tells us almost nothing about the impact of the overall campaign. That is, unless the campaign is properly set up to track this metric.

To get a better understanding of just how impactful your digital ad dollars are, dealers would fare well to ask these three questions when reviewing the results of a digital automotive campaign:

How many people were exposed to my ad?
This question is very important simply because the advertising industry often reports in “impressions,” which is the number of times an ad was displayed. Depending on the campaign set-up, those impressions could all be delivered to a very small number of users. Requesting information on how many people saw the ads, known in the digital world as “reach,” will generate a completely different number. This metric goes hand in hand with “frequency,” or the average number of times the ad was delivered per person.

These metrics will paint a clearer picture of how many people actually engaged with your creative. Repetition to the same person can be helpful, but knowing the number of people will keep you in control. If it turns out that you do not like the number of people that received the ad (or there were too many per person) you can ask for something (here’s the jargon) called a “frequency cap.” Simply said, this means to cap the number of times a person can see your ad each day.

How many people that saw my ad, came to my website afterwards?
Another critical question, because often times there is too much focus on clicks. But clicks are not a meaningful metric because most people do not click on ads. Asking instead how many consumers came to your site post-view will tell you how many people were actually impacted by seeing the ad. Once they come to your website, you can create a path toward asking for an Internet sales associate to call them, or viewing the cars on your lot to find what they are looking for.

This point hits home when reviewing post-campaign statistics. Among all the automotive campaigns Gamut ran in 2015, 72% of the website visits were from people that saw the ad but NEVER clicked. Only 28% of the people that visited the website did so after clicking on the ad. Knowing how many people visited your site after the ad was shown to them, is a much better indicator of success than how many people clicked.

How many people did the ad drive to my store(s)?
This metric is perhaps most important, and there are several options to track it. Running ads with a “store locator” button is a great option, where consumers can click to find the closest location and directions. Another option is to request a brand lift study that asks people who saw your ad if they intend to visit, or if they intend to buy a car in the near future. This tracking method will provide insight into consumer behavioral habits outside of simply visiting the store. Finally, you can use a “mobile” campaign (that is a campaign that is delivered via mobile phones) and use a “click to call” feature. This will tell you how many people called your store in response to the campaign.

Asking these three questions will not only help dealers sort through their digital efforts, but will help them better prepare for campaigns based on their desired results. Reviewing digital ad spend through this simple lens will help cut through the jargon and get to the metrics that make most sense for, and have the most impact on, your campaign.