By Jon Torrey, Dealer.com Senior Product Manager
Digital video advertising has proven to be an effective channel for reaching audiences and converting new customers. Given its track record for success, there is a surprising shortage of companies taking advantage of the medium. The reason why is simple—they do not have the video assets or production capabilities to do so. This hurdle means video advertising is a historically underpriced advertising channel, but is it right for your dealership?
Of course, no advertising channel is right for everyone. Every dealership has unique qualities, markets, tactics, challenges, and goals. But the current opportunity is too good not to explore, and your dealership should at least consider leveraging these channels. The following list of questions can help determine whether it’s an investment worth pursuing.
- Where are you currently using video advertising? Traditional television, connected TV, YouTube, or other(s)?
- For the channels that you are using, why have you chosen to invest in it? Why have you chosen not to invest in others?
- How do your current advertising channels perform? What KPIs are you using to evaluate their performance, and are the metrics different across the various channels?
- Based on your evaluation of performance, how are you making decisions regarding where to lower budgets, where to increase budgets, and where keep them the same?
- Have you considered testing a new channel to compare performance using the same KPIs? Why or why not?
- Is there an element of “we’ve always done it this way” influencing your investment decision? Does this take into account recent changes in market and consumer behavior?
- Are you showing ads in the places where your shoppers can be found? How do you know?
- What are the core and unique value propositions of your OEM brand, and are these value propositions the same for your dealership? Are they being effectively communicated by your current marketing assets?
There are no right or wrong answers to these questions, and every dealership will answer them differently. The idea is to think deeply about your current advertising investments and draw your own conclusions.
If your answers to these questions present digital video advertising as a promising opportunity for your dealership, then you may face the same challenge that many others have encountered—an overcommitment to TV advertising. Digital advertising is often seen as competing with traditional TV advertising for share of the budget. For some dealerships, TV has been a mainstay and there’s hesitation to let it go or reduce that budget.
A simple experiment can help dealerships work through this challenge: run a limited placement of digital video. It’s important to take a step back and recognize attachment or bias toward certain advertising channels, including TV, before reflecting on its performance. Oftentimes, as dealerships take an objective view of advertising channel performance, they end up moving more and more budget over to that channel.
Now is the time to evaluate your current advertising strategy and test new channels. Because the number of advertisers is limited, digital video is affordable and, in most cases, can compete with television at a much lower price point. Act quickly. Start asking questions and running tests to help you decide if you’re ready to jump on this unique opportunity.