There is a lot of conversation regarding whether or not to cut or spend less on digital advertising. And while we are indeed facing unprecedented times, reducing ad spend is nothing new for dealers. If sales are down, one of the go-to reactions is "we need to cut spend." Cutting ad spend with the wrong form of advertisement can have an adverse effect. So before you cut ad spend, take the time to consider the below points. 

Put together a list of current vendors you are using. 

You would be surprised, but many dealers do not remember all of the various vendors they are paying monthly fees with. To start this analysis off on the right track, take a minute to compile a list of all of the vendors you are using. One of the easiest ways to do this is by using Google Sheets. You can quickly pick-up right where you left off without having to save it. Once you have compiled the list of vendors - log into their back-end tool and check the following: 

Is the dealer information correct? 

• When is the last time anyone used the tool (e.g., trade-in tools, video tools, texting tools, etc.)
• For third-party lead providers with a flat rate, what has been the average lead cost for the last sixty to ninety days? Is your inventory updated correctly? Do you have the price fields set for new - "WAS"/"NOW" - same for pre-owned?

Once you have compiled a list of vendors by type, name, monthly cost, put another column "ROI" on your Google Sheet, get on to the next step.

Look at the Analytics. Don't Rely on a Gut Feeling. 

Website traffic is down, but that does not mean that the ad source is not valuable. Do not just look at the last few months of reporting, either. Instead, review reporting from the previous sixty to ninety days. Be sure to review the CRM (including multiple lead source reporting for attributional data) for sales. If you find that you are not selling enough vehicles to justify the cost or the quality of leads are not good, then put that vendor on the cut list. 

What marketing should I focus on? 

Getting the customer to your website has and remains to be the most valuable way of getting higher quality traffic. But make no mistake, not all PPC campaigns (in this case, Google Ads) are created equal. You could easily be wasting thousands of dollars before lunch if your campaigns are not optimized correctly. 

For those with access to your Google Analytics and Google Ads, take the time to look at the following items: 

Impression Share: Out of how many times the customer searches the "phrase/keywords," is your dealership visible? If you are not visible for at least 70%+ of the time, then your campaign is not going to be as effective. 

What Zip-Codes are you targeting? From experience, if you are using a third-party company to manage your campaigns, they do not always take the time to make sure that the zip codes you are targeting are the most relevant. For example, why would you want to spend money on zip codes that are not in your primary marketing area? You also want to take a look at your historical sales data, looking to see what zip codes you sell the most vehicles from, which should be from your primary marketing area! Use these reports to have a meeting with your vendor to strategize which zip codes you need to focus on! 

To help with this effort, most if not all OEM's send your dealership "defector" reports that entail the top zip codes that purchased from you, and who is taking the most business - by model - from you as well. Having this data is invaluable when making the most of your Google Ad spend. 

Once you have selected the right vendors to cut, stand your ground! 

It is no secret that when you go to cut a vendor, they will often try and promise you the world—telling you that it will be a big mistake to cut ties due to the traffic they bring to your site. If they do bring that much traffic to the site, you would have seen that in your Google Analytics reporting -- "referral sources." If they are not even on the radar, then chop them! 

Bottom Line: it is not easy by any means to make these hard decisions. But regardless of the situation we are facing, it never makes sense to continue to spend money with a marketing vendor that does not yield results or pay for tools that your dealership is not using.  

Once you have removed the dead weight, and have spoken with your ad agencies (or your internal marketing teams), look to see if you are making the most out of your current spend. In doing so, you will get for your money, and possibly even increase spend on the campaigns that are performing well. All of which can have a positive impact on your fixed-ops and total sales! 

When is the last time you honestly spent any time reviewing your vendor's reports?