The Market
The Basics
Before the first ad is placed, it is important to establish the geo-targeting of your advertising. The geography in which you serve your ads across all mediums is critical. Running ads outside of your market will burn through your budget without results. Being effective in any digital medium requires identifying the area where you will get the highest return on investment. Typically, that is the area in which you have historically done the most business.
Advanced
Marketing agencies can identify your ideal market by downloading your dealership’s transactional history from your DMS and locating the ZIP codes that have been the most effective for your sales and service business historically. You can also provide that data to them directly. The advanced vendors will be able to see what percentage of the market you already do business with, which becomes an important factor in the cost effectiveness of your campaign.
If you sell 20 cars in a year in a ZIP with 10,000 people and 19 cars in a ZIP that has 1,000 people, you should prioritize the ZIP with 19 sales first as it has a better ROI. Chasing ZIP codes with a large amount of same-brand owners without understanding your own penetration can actually cost you more money by decreasing your CTR and in turn increasing the CPC on your entire campaign.
Most digital marketing platforms have the ability to serve ads at the ZIP code level. This is the most efficient way to ensure you are targeting in the most precise area possible. Rather than drawing a single radius around your dealership, you can maximize your spend by narrowing down your marketing area. Google and Bing allow you to target by ZIP code in addition to radius, which is a best practice because consumers aren’t always identifiable by both.
Your marketing area can vary by medium, audience, or campaign (new model vs. service). Dealers often obtain service business from consumers located closer to their dealership, and therefore can spend their money more efficiently by serving ads in a tighter geography closer to their store. Conversely, sales consumers will travel from further away to purchase the vehicle they are looking for if they can get a better deal. Therefore, sales campaigns can be expanded out further to a larger geographical marketing area.
Keys to Success
- Work with a vendor that can download your transactions and compare them to the market or provide the vendor with your market details by ZIP code.
- Do not draw a big circle around your store and call that geo-targeting. You will run a more efficient campaign by targeting more precise areas via specific ZIP codes and small radii.