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Identifying and Controlling Your Digital Marketing Expenses

You Have to Know the Details Before You Can Manage Them!

DealersEdge recently heard from an automotive accounting firm that Advertising Expense grew from $600 per new vehicle retailed to over $900 PNVR in 2023. That is a healthy increase especially with the significant the reduction Gross Profit experienced over the same time period.

The aggregate PNVR tells only part of the story. It is important to know how you are spending that money and if it is being spent effectively and efficiently. If you are like most dealerships, you are writing a lot of checks every month to digital advertising and lead production vendors. Is it time to take a closer look?

Monthly Review of this Expense Category By the GM and/or Controller

By conducting a car dealership digital marketing lead source analysis, a General Manager and/or Controller can identify the most effective channels for generating leads and then allocate the marketing budget more effectively. It’s important to regularly review and adjust the analysis based on changing market conditions to ensure that the dealership’s digital marketing efforts remain effective and efficient.

Here is an Excel sheet format and Action Plan to assist your analysis:

Collect data:

Collect data on lead sources from various digital marketing channels such as social media, email campaigns, pay-per-click (PPC) advertising, search engine optimization (SEO), and display advertising.

Categorize lead sources:

Categorize the lead sources into different groups, such as direct traffic, referral traffic, organic search, paid search, social media, email campaigns, and other digital marketing channels.

Analyze conversion rates:

Analyze the conversion rates of each lead source to determine which channels are generating the most qualified leads.

Calculate cost per lead:

Calculate the cost per lead for each channel by dividing the total marketing spend by the number of leads generated.

Analyze return on investment (ROI):

Analyze the ROI of each lead source by comparing the cost per lead to the revenue generated from those leads.

Determine the best-performing channels:

Determine which channels are generating the most qualified leads with the highest ROI and allocate more of the marketing budget to those channels.

Optimize underperforming channels:

Identify channels with a low ROI and low conversion rates and optimize them to improve their performance or consider reducing the investment in those channels.

Maybe $900 PNVR is the right number and this expenditure is both effective and efficient. Or just maybe you are spending in the wrong areas and need to adjust your plan. That is hard to do, if you don’t have all the numbers.

Let's get some of that lost Gross Profit back... or at least make the higher expenses work harder for you!

This analysis was excerpted from a popular DealersEdge Guide- the General Manager's Desk Reference and Dealership Operating Guide... and is just one of many analytical and dealership management tools included.

Details on How to Get A Copy Below


The automotive General Manager's core responsibility lies in safeguarding organizational processes by skillfully leveraging the expertise and intelligence of team members.

Through effective delegation, collaboration, and communication, they foster a dynamic work environment that promotes innovation and ensures the organization's resilience, ultimately driving success and long-term sustainability.

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