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Ahmed Elbortoukaly

Ahmed Elbortoukaly Digital Advertising Specialist

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Direct Response vs. Branding: What’s the right approach for your dealership?

Direct response and branding are two very different types of advertising communication. Let’s take a look at the two, because knowing which one to use can mean the difference between targeting a client ready to buy (direct response) and one who is only aware of your business (branding). For that reason, certain tactics and approaches are more efficient at achieving one goal than the other. Bottom line, it is crucial to determine your goals before you start an online Ad campaign.

Direct Response

Direct response advertising is used by dealerships to generate leads or to drive traffic in short periods of time. Auto dealerships commonly use it to build a customer base, to launch new specials, or to encourage users to fill out finance applications. Direct response advertising typically includes what is called “calls to action” that implore customers to take immediate action, such as “Limited Inventory”, “Apply Now”, or “Call Today”.

How to measure success?

In direct response, we use Click-Through Rate (CTR) leads, and Return on Investment (ROI).

To manage your online advertising strategy and costs, it’s useful to define a Cost-Per-Acquisition (CPA) that you’d like to achieve per conversion.  For example, if your focus is leads, then you need to figure out the CPA for each lead and not pay more than that amount. You will then be able to monitor the performance of your ads to ensure that they’re meeting your CPA goals.

Branding

If you are aiming to raise the awareness and visibility of your dealership, and service and parts, then you want to place your ads in front of as many people as possible within your target audience. This is branding. Using Cost-Per-Thousand impressions (CPM) means that you set a designated amount (what is it worth to you) on how much you are willing to pay per thousand impressions and then are charged only for every thousand impressions, not the clicks. Utilizing Google’s Display Network allows you to show ads on other relevant websites using contextual keywords from your keywords list.  The Display Network uses various ad formats to achieve this: text ads, banner/image ads, mobile ads, and video ads.

Brand management includes an ongoing communication of brand benefits. Direct response marketing is usually about sales incentives to drive demand; however long-term brand building focuses on driving up the perception of worth of the product or service. In essence, brand management is used to increase profit margin over time so the company earns more on each sale.

Which approach is best for your dealership, you ask? We definitely recommend both approaches. You cannot ignore one and expect to compete in the digital world, however, depending on your goals you can put more emphasis on one more than the other.

 

Chris Costner
Great post Ahmed. Regarding the branding side, are CPM's the most effective way to accomplish this? What other approaches would you suggest to compliment this approach, if any?

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