Should I Cancel all Advertising? Marketing in An Uncertain Environment

Should I Cancel all Advertising? Marketing in An Uncertain Environment

(This post is an updated summary of advice I provided my clients last month.)

I’m getting a lot of questions from clients about what to do with marketing budgets during the current crisis, so I thought I’d share with you what I would do if it was my money and my business on the line.

That is, what would I do if it was Stauning Motors?

From what we know today, every dealership sales organization is likely to be closed or semi-closed (home delivery only; appointments only) for weeks… some, maybe months.

Given this, the question on every dealer’s mind is what to reduce, what to pause, and what to eliminate? (To be clear, keeping more advertising than I recommend is not a dumb choice. If you can afford it and if you have staff to adequately address prospects who may be months away from purchasing, then feel free to keep whatever you choose – it’s your money. However, cutting more than I recommend – unless you stand the chance of closing for good by spending today – will hurt your chances of coming out the other side as a market leader.)

To help answer this, I’ve provided four scenarios below with my thoughts on what I would do with my marketing budgets in each – again, if this was Stauning Motors.

Quick caveat: I’m not considering Co-Op in these scenarios. Because every OEM is different, consider this advice weighed against your available OEM programs. However, if something is not truly 100% Co-Opable, I would not let it sway my decision on where to spend and where to cut.

The goal for all these scenarios is to ensure I come out of the current crisis positioned to take a leadership position in my market.

SCENARIO 1: Service and Sales Fully Open:

1. Used car classifieds. I would consider canceling classifieds vendors – keeping a close watch on the ROI. Certainly, if I had multiple vendors, I would likely reduce to just one… and only if this vendor was offering a significant discount while still providing an acceptable ROI.
2. TV, Radio, Newspaper. Mostly gone. This includes OTT (over-the-top) Television and Pandora/Sirius; unless I could negotiate significant discounts (or the overall cost per valid impression was low) and I felt I could craft a message that made customers feel comfortable to do business with me during these trying times. (With consumers spending more time at home, services like OTT and Pandora are seeing increased audience sizes.)
3. Search Engine Optimization. If I’m using a trusted SEO company (Customer Scout, Hartenstine, and Venture Automotive are the only ones I can recommend), I would keep my SEO in all scenarios, as the content/work they provide during any market will benefit me now and in the future.
4. Search Engine Marketing – PPC. I would reduce my PPC budgets significantly and no longer bid on competitive names or my own name (unless there is a city in my name like “Atlanta Toyota”). I would also not bid on fixed ops keywords (unless I run a collision center). Finally, I would instruct my PPC partner to focus the entire budget on low-funnel keywords like “Ford Dealer” and stop bidding on vague searches like “Ford.” Other examples of this include stopping bids for “Ford F150” while increasing bids on something like “Ford F150 Prices.” This will require extra work from the PPC vendor, but this is what they should be providing.
5. Search Engine Marketing – Google Display. If I am buying display only from the Google Network and paying Google directly (both highly recommended), I would continue this. If you are not paying Google directly for display, I would cancel immediately. You are likely being overcharged and there is a higher likelihood of ad fraud. When you pay Google directly, you generally receive 1,000 ad impressions for every dollar you spend – that’s a $1 CPM. Most dealers are paying $13-$18 per thousand impressions solely because they’re not paying Google directly for this display.
6. Facebook. If I’m using a Facebook partner who has access to and uses the Oracle data for targeting, I would either keep this ad spend going as is (if the budget is relatively large) or increase it (using some of the cuts from PPC to cover this increase). The bulk of my ads/messaging wouldn’t change from what I was doing last month; except that if my OEM had special incentives or payment relief programs, then I would change the bulk of my ads/messaging to reflect those.
7. Third Party Leads. Unless it’s a true pay-per-sale model, I would consider dropping this service for now; or, at the very least, tracking the ROI to the penny. If this service can provide an acceptable ROI when sales are down 30-50%, it can stay. Otherwise, it must go.
8. Website Add-Ons. I would evaluate each website add-on individually and ensure these were still driving leads and sales. These include trade forms, quick credit apps, pop-ups/pop-unders, payment tools, chat, and automated specials. Those where the ROI is not acceptable or unknown, I would cancel. (Of course, you should be doing this every month; not just when we face a market slowdown.)

SCENARIO 2: Service Fully Open and Sales Remote Deliveries Only:

1. Used car classifieds. Gone.
2. TV, Radio, Newspaper. See SCENARIO 1.
3. Search Engine Optimization. See SCENARIO 1.
4. Search Engine Marketing – PPC. I would reduce my PPC budgets to almost zero and only bid on keywords focused on home delivery of vehicles. I would not bid on fixed ops keywords (unless I run a collision center).
5. Search Engine Marketing – Google Display. See SCENARIO 1.
6. Facebook. Provided you’re using a Facebook partner who has access to and uses the Oracle data for targeting, I would keep this ad spend unchanged. All my ads/messaging would be focused on “Buy from Home” and payment relief programs.
7. Third Party Leads. Unless it’s a true pay-per-sale model, I would drop this service for now. Managing these extra leads with a reduced staff likely diminishes your team’s success with the lower-funnel leads.
8. Website Add-Ons. See SCENARIO 1.

SCENARIO 3: Service Open and Sales Closed:

1. Used car classifieds. Gone.
2. TV, Radio, Newspaper. Gone – except for truly cost-effective branding via OTT.
3. Search Engine Optimization. See SCENARIO 1.
4. Search Engine Marketing – PPC. Gone, except for my collision center, if open.
5. Search Engine Marketing – Google Display. Gone.
6. Facebook. See SCENARIO 2.
7. Third Party Leads. Gone.
8. Website Add-Ons. Gone, unless these are fixed ops-related like Chat and Service Schedulers.

SCENARIO 4: Service and Sales Closed:

1. Used car classifieds. Gone.
2. TV, Radio, Newspaper. See SCENARIO 3.
3. Search Engine Optimization. See SCENARIO 1.
4. Search Engine Marketing – PPC. Gone.
5. Search Engine Marketing – Google Display. Gone.
6. Facebook. See SCENARIO 2.
7. Third Party Leads. Gone.
8. Website Add-Ons. Gone, unless you have someone from your team available to manage the chat tool to answer customer questions. No need for outsourced chat in these scenarios.

So, what’s my rationale for keeping Facebook marketing, trusted SEO, and OTT going at some level in all scenarios? It’s simple:

1. People continue to use Facebook as a primary source for their news/social content – and they’re spending more time on the platform when complying with stay-at-home orders.
2. Facebook ads get viewed and messages get across better than Google Display, PPC, or billboards.
3. Facebook ads are extremely cost-effective and highly targeted.
4. The branding you do on Facebook and OTT during this crisis will be akin to what you did on television 30 years ago. That is, people will put you first in their consideration set when they’re considering a vehicle purchase. (Because they saw you “everywhere” during the crisis.)
5. Consumers are watching more OTT than ever; so, we’re seeing lower costs per valid ad impression (when you’re using a trusted source).
6. Trusted Search Engine Optimization (SEO) is a long-term play. The work your SEO vendor provides today will benefit you for years. Going dark with trusted SEO is foolish… and it will cost you sales in the future.

Finally, if you don’t believe traditional branding is important in the digital age, then you’re not paying attention to what drives the bulk of your business. Look at your Google Analytics from the pre-coronavirus days and examine the top keywords that drove traffic to your website.

What did you find? Yep, consumers typed YOUR NAME into a search engine to find your site.

This begs the question: How did they learn your name?

The two primary ways consumer learn your name come from driving by your dealership and seeing/hearing your advertising. Your branding has had a compounding effect for as long as you’ve been in business.

They saw your billboards and newspaper ads, heard your radio spots, saw your commercials on TV, or viewed your display ad on Facebook or via the Google network. In other words, your branding worked… and it kept you in their consideration set when they were ready to buy.

Soon… many of the people in your market will be ready to buy again. However, if you go dark with your marketing, there’s a very good chance you won’t be in their consideration set.

Good selling!