No you’re not dreaming it. It is getting more expensive to attract the same amount of in-market shoppers as last year. What happened? As a digital marketing professional, how is it your budget gets bigger every year but the amount of in-market buyers you attract don’t grow by the same margin?

Actually it’s pretty straightforward - Everyone else is now using similar tactics to get valuable in-market shoppers and the field is getting saturated.

Yesterday your dealership was one of the pioneers in the digital game and you were reaping the rewards of fairly open playing field. Today, anyone who has the budget can easily achieve what you have with a handful of vendors. Dealerships are competing with the guy across the road, across town, and across their own dealer groups and these guys are all using the same tactics you are.

You used to be able to invest a good chunk of your budget into listings sites online, a little bit extra for top spot on SEM and BOOM! your showroom was the top seller in your area and your team thought of you as their “Digital Guru” (PS - don’t ever call yourself a digital guru). But now everyone is using the exact same tactics.

That was then, this is now. You can’t just go out and throw more money at the problem and expect to be back on the top of the heap. Dealership advertising has moved way past the “good ole days” listings and search solving all problems and the sooner you realize these problems the better.

Cookie-Cutter Dealership Websites and SEO won’t separate you anymore.

You have a dealership and you list your cars on your web site. Great! It’s vital to be online, having your inventory online is a big part of the search engine game.

Tell me, does this scenario sound familiar to you?

You decide to spend a whole bunch of your annual budget on SEO optimization so you can be found on the first page of any relevant search and at the end of the year, after you’ve spent tens of thousands of dollars, your competition across town is still ranking higher than you! Crap - better start looking for that new gig.

Let’s face it, there are only a handful of vendors that make really great dealership websites and unfortunately many of you are required by your OEM’s to work with the usual suspects like DDC or CDK. Therein lies the problem. In order to “separate yourself from the pack” you’ve got to find something new but you're forced to use the same vendor that offers the same services to your competition.

How is it possible for your Ford dealership be more competitive than the other two Ford dealers in the same city that use the same vendor for their websites and SEO? Ding Ding! - it’s not.

Listing Sites are Over-Saturated

Many dealerships start their digital marketing here and the appeal is simple: These listing pages are designed to get your cars in front of interested buyers close to your dealership. Exactly what you need! Plus - you’ve been working with the Orange guy and the Purple guy for the last 15 or 20 years, so why not keep doing it?? Right… Wrong!

Don’t forget, that same listing site is making the same guarantee to all the other dealerships that compete with you. If your ads need to be showcased at the top of that listing page, you have to buy the “Premium Positions” which cost more than what a basic listing costs but displays at the top of the list with a minor color splash that says something quipy like “Prefered Listing”.

Worse yet, your Ford Explorer is top of the list with your main competitors Ford Explorer and both of your ads look identical! How does this differentiate you? Once again, you’re back to spending money to maintain the same results rather than increasing results. Double crap!

The Inevitability of Diminishing Returns for SEM

No you’re not dreaming, the average CPC is skyrocketing year over year. A study by  AdGooroo.com has found that the average automotive CPC has increased a staggering 83% from 2012 to 2014. Our own internal study completed at the end of February 2016 has the current average CPC, for Tier 3 Automotive spending in AdWords, at $2.65. This is right in line with that growth figure. Ouch.

This means that you will HAVE to increase your SEM budget next year just to maintain the same returns you saw this year.

When you were one of the only few dealerships in a city, it was easy to stand out in the crowd. As more dealerships moved in and increased their digital savviness, the competitive landscape became more saturated, the ad space became more crowded and listing pages more competitive (and expensive).

What comes next?

As with many things in life, the strategy is straightforward, but the execution is difficult. In order to get ahead of your competition you need to focus on what your competition doesn’t do rather than keeping up with them.

This means experimenting with your advertising and marketing dollars on the new digital technologies and techniques that will not only get your inventory in front of more in-market buyers but also in a channel that isn’t already saturated with the rest of your competition.

The key to surviving in today’s ultra-competitive digital marketing landscape is to be in front of the advertising trends. A savvy digital marketer will know what will be competitive tomorrow, today.  

What have have you seen that not many dealerships are doing? Leave it in the comments.