How do you determine your advertising budget?

Timothy Martell
SO many factors play in to determining an appropriate ad budget. I think this would be more a conversation to have privately where you could lay out the specifics of your brand, market demographics, current business levels IE NET, GROSS, Volume (N/U) PMA competition figures, etc. You really need a solid grasp on all the variables and then determine how much you should be able to grow your own market as well as how much incremental business you can pull from your competitors markets. Work backwards from there to determine the steps to the budget. I'd love to discuss anytime. 978-212-9454 ext 504
Steve Humphries
There has been a tremendous shift in dealership advertising channels overall. Just 5 years ago a dealer could still dominate a market and his competitor by outspending on traditional media (radio, television, direct mail, cable, print, etc.). That is no longer the case. With digital, even a small single point store can compete with a mega store, provided the proper digital processes are in place. We are seeing dealers take 50-75% of their traditional dollars and moving over to digital, with great results.
Mike Fox
There are several sources out there to see what percentage of revenues  should be spent on advertising per industry but we have always given a little  different advice to clients. While that information is valuable and gives you  a starting point, its also important to analyze the competition on your  target ads to determine what they are spending annually on advertising and  what market share they currently have. If the industry as a whole is spending  roughly 8% on marketing and your top two competitors have 80% combined market  share, then your 8% isn't going to do too much...
Steve Humphries
Most dealers have a per car sold allocation for advertising. We see that vary from a low of $250 to a high of $375. It also depends on where the dealership is in it's "life cycle". Is the dealership a new point or is it an established store with historical sales. Hope this helps.

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