Marketing cost per vehicle sold?

John  Swanson

I'm very curious about this...what is your dealership's average marketing cost per vehicle sold? Let's not count CRM costs because...why would that be included in Marketing?

So this should include website, third party listings, social media, Direct Mail campaigns, radio, TV, etc. Add it all up, divide it by an average vehicles sold per month and list that number. 

Derrick Woolfson

@John, I am with you on that one! I have never understood why dealers put the CRM in marketing costs? It is a cost of doing business, not to mention not sure why just sales pays for it when both service/parts use the CRM in some capacity. For us, we take the vendor cost; for example, for OEM leads, we take the total invoice and divide it by the number of units sold. And do that for each endemic site, as for other costs; we take the dealer website marketing costs (AdWords & Remarketing), and divide that by the number of units sold off the website. After breaking it down that way, we then add the marketing costs together and divide it by the total units sold. For us, it is more important to understand the cost per vendor, and what our profit margins are individually and collectively. Wherein, we find that our website obviously has the lowest cost per unit vs. endemic sites. 

John  Swanson

100% agree, it's more important to know the cost per sold unit for each vendor. My goal with this post, however, is to get a better grasp on exactly how much everyone is spending, in total, on marketing. I feel as though we are heavily under-spending in the Marketing Department, and was hoping for some numbers from other dealers to get an idea on what a "marketing dollars per vehicle sold" looks like. 

Dane Saville

John,

NADA recently issued its annual 2017 financial profile. 

Page 19 shows advertising cost per unit told. It actually ticked down from the high of 2016 and even 2017 -- looks closer to $623 as opposed to $629/$630 of last year. 

Page 20 shows an uptick in the spend in digital: 56.3% compared to 55.4% last year.

If you look at an aggregate of the data in recent years, there's definitely a clear correlation (that smacks of causation) between the drop in marketing cost per car sold with the switch in spending from traditional to digital media.

Page 20 also shows that total advertising averaged $562,575 for the year.

Here's the link for your full review:

https://www.nada.org/WorkArea/DownloadAsset.aspx?id=21474857318

Dane Saville

Typo in my response: released the 2018 data.

Mark Rask

this data would so helpful

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