Digital Advertising Blog

Advertising 101

by Terry MacCauley - Posted 2 years ago

Advertising 101: Fundamentals Are Fundamentals for a Reason

The disease of knee-jerk reactions, forgetting about the forest, and becoming a six-month expert in any trade, service, or product is more dangerous than advertising in the wrong medium.  At Big Time Advertising, there are a few fundamentals to advertising that must be followed 100% of the time.  Here are our top 10.

  1. Reach the Most People for The Least Amount of Money Possible
  2. Budget Is Always the Driver
  3. Word of Mouth Is the Best Form Of Advertising
  4. Consumers Must See Anything A Minimum Of 3 Times to Recall Anything
  5. Consumers Who Have Seen Anything More Than 9 Times Are Ready for Anything New
  6. Plus, Plus Often Produces A Bigger Plus.  The Achieved Bigger Plus from The Plus, Plus Does Not Mean the Added Plus Is What Must Be Working Best.  (Don’t Start Smoking Yet!  This Will Be Explained Later)
  7. Preserve the Brand in All Advertising Channels
  8. Full Immersion Always Beats A Toe in The Water.
  9. Activity Always Measures Advertising Success Better Than Gross Sales
  10. Peak Seasons Deserve Peak Spending

How’s this for an in-your-face introduction with a huge challenge to the Huddle (2-3 employees gathered and waxing about how to solve the problems of the dealership)?  This is such a loaded introduction which we know rightly deserves so much discussion and emphasis.  As we see more and more confusion in digital marketing, we are finding more and more dealerships being errantly advised by well-intending vendors, traditional agencies (not automotive focused), manufacturers, and the like.  Too many of these “experts” are more focused on your rearview mirror than anticipating what is coming down the road in the near future with little planning for the complete journey. 

The purpose of this blog is to help well-intending dealers that are genuinely desiring market sustainability while maintaining a proper growth mindset. Slow down and follow the logic and re-read if and when necessary.  Comprehension of this important topic will yield results for future thinking.

First fair question:  Would you ever hire a used car manager in training that is 100% new to the automotive business; and after six months or even a year of training, give this person 100% control of all wholesale and auction purchasing and selling, all trade-in valuation responsibility, and all reconditioning decision making?  Read it again. I know it was a lot to take in and possibly confusing.  Hopefully, your answer is an absolute, “HELL TO THE NO!” If so, then a fair follow-up question might be:  Why are we often letting well-intended Marketing Managers, Internet Managers, Sales Personnel, and often management with little historical advertising background experience make so many critical advertising decisions with precious marketing dollars?  Such as the buying and selling of pre-owned vehicles. Advertising and marketing are not as simple as someone’s gut feeling because they’ve tried something a few times in Facebook Marketplace with some success.  I apologize now if this comes across too blunt, but it needs to be addressed more and more with what we are doing to our present and future selves.

Let’s jump right to it.

  1. Reach the Most People For The Least Amount Of Money Possible – This is so simple. Still, it should always supersede any and all debate when a decision cannot be made, or there is confusion in which medium to advertise your dealership.  If you can tell 200,000 people for $5,000 or tell 500,000 people for the same $5,000, always pick the bigger reach.  Even when the minions start telling you how the other 300,000 are not your customer, it is not focused enough on our core buyers, and blah, blah, blah.  Yes, we always want to hone our advertising strategies to be as targeted as possible, but never forget that more is always more.  Ask Wall Street how valuable a customer database is.  Billions are invested in startup companies with years of negative cash flow, all because the customer acquisition is the crown jewel.  Social Influencers make more money with more subscribers.  No one debates if they are “good” subscribers, more is worth more.  Keep in mind that everyone can be an influencer of your dealership—the more influencers following your brand, the more powerful your marketing efforts.
  • Budget Is Always the Driver – Everyone likes to tiptoe around budget discussions.  However, they are vitally important and set the tone for all decision making for the best mediums to achieve desired goals.  Instead of worrying if you are spending enough or too much, invest time into knowing what you can spend on advertising as a fixed monthly expense.  Remember, advertising is really a COGS expense; it is not unlike paying a utility bill.  Advertising budgets can be planned with so many different formulas, but once you find one you can live with, stick to it and stay the course.  Never, ever should the thinking be, “If we did not spend that money, our bottom line would have been better.” While at face value, it could be true but remember, advertising is growing the top line.  Budweiser could stop advertising today, and for some time, they would have record bottom line profits.  However, with time (as someone is turning 21 every day), their market share will erode and dwindle and will take tremendous spending to get it back to the same levels.  Find your formula and stay the course.  A percentage of Gross Sales or a set dollar figure for each sold unit will allow us to scale with the good months and protect us when the market turns downward.
  • Word of Mouth Is the Best Form Of Advertising – As discussed earlier, influencers and satisfied customers make for a much healthier marketing strategy.  Word of Mouth is indeed the best form of advertising as it sends us customers that are the easiest to sell to, make the highest gross margins, and give the best satisfaction scores.    Take Krispy Kreme, for example; they grew their company for 75 years exclusively with strong word-of-mouth practices.  Things like “Neon Light On” (means hot doughnuts), big windows to peer in and see the product being made, discounted products to be used for any and all local fundraisers (without being picky), and free samples gave way to beyond powerful word-of-mouth results.  In fact, before going public and advertising conventionally, the brand in a study was chosen 35% of the time when consumers were asked which coffeehouse or snack restaurant was their favorite.  Big Spending Dunkin Donuts and Starbucks scored in the single digits.  What do consumers say about your brand?  Protect it like your firstborn child.  Get creative and go back to the basics of putting the customer first in all marketing strategies.
  • Consumers Must See Anything A Minimum Of 3 Times – Without boring you with how this ever came to be an important advertisement recall fact, trust that it is indeed an important, critical fact.  What this means is that consumers in their busy lives have brands and messages being thrown at them every second of every day, beyond comprehension.  Look around where you are sitting right this second.  How many brands can you physically see and name within your line of sight?  I love this challenge and am sure you can find a double-digit number of brands quickly.  They are everywhere.  Breaking through the clutter can seem impossible and is helped with great creative.  Unfortunately, even the greatest creative will fall short if the consumers cannot recall seeing it.  Like when training a dog to sit, we must tell our consumers a minimum of 3 times to have any hope of advertisement recall being possible.  Yes, there are ways to measure this critical fundamental when advertising in any medium.  Many will pooh-pooh this as either their motives are jaded (they are selling and need a sell), or they simply do not fully understand it nor know how to quantitate such a data point.   The simple rule to remember if your consumer has not seen or heard your message a minimum of 3 times, the odds are that they will not be able to recall your brand or message when in the market and searching for their top-of-mind dealership(s).  Ultimately, if you cannot deliver your advertisement three times in any medium, then you are underspending when desiring to receive optimal ROI.
  • Consumers Who Have Seen Anything More Than 9 Times Are Ready for Anything New – Logical thinking should lead anyone to conclude that if there is a minimum, there must be a maximum.  Thanks to highly intelligent predecessors and marketing icons from the yesteryear of Madison Avenue, we know that the maximum ROI is nine.  Ultimately, what this means is that once anyone has received an advertisement nine times, they are ready for new messaging.  While we should beat the drum of our positioning statement for the lifetime of our brand, our specials, invitations and the like are best to be changed when approaching that maximum frequency of nine.  A simple example would be placing one commercial in the same time slot for too long could become wasted dollars and a form of spending too much.  Another discussion for another day is how different demographics exist within every media channel, and our multitude of products often also have different demographics.  The critical thing to remember here is that your key demographic can often receive more than we are giving them. They are ready for that next message when they have had the opportunity to see your messaging nine times.   This is how and when adding new mediums can be discussed and how dealers can build a better strategy month in and month out.
  • Plus, Plus Often Produces A Bigger Plus.  The Achieved Bigger Plus from The Plus, Plus Does Not Mean The Added Plus Is What Must Be Working Best.  – Thank you for not smoking on this one yet.  It is so clear in our agencies mind and an important part of our culture when it comes to properly measuring results for help with building our dealer’s future.  So, what are we saying, and why is this so important?  As our dealers tell us, they are bombarded with marketing vendors from all directions.  Every now and then, we properly give in to something new or different.  There is absolutely nothing wrong with this, and that is not the message here.  When adding these experiments to the budget or sometimes cancelling a portion of advertising spend to get the desired medium sample, know that it should absolutely produce a bigger plus (activity, leads, sales, etc.).  Then it is critical to heed that temptation to proclaim you have found the golden ticket that was the best thing since sliced bread.  It might very well be just that, but there is no way that a ninety-day sample or quite possibly a full year of testing, we could ever fully know if it alone is the diamond in the rough.  Like our first fundamental, telling more people about the dealership is always better than telling less.  Especially when you have strong established marketing channels that have created a solid foundation of your brand, the plus spend should and will produce a bigger plus.  This should parlay off of the minimum of 3 and maximum of 9 rules.  An easier visual would be if you have been fishing in a portion of the lake successfully with nightcrawler bait, but the desire arises to want more action.  When you add a second pole into the water with a different bait, good things are sure to happen.  What I am trying to say is do not shame yourself for previous advertising that has strongly established the dealership’s brand.  The shift in gears will and should feel really good and make us go faster.  However, when the traffic stops and we must return to neutral, remember where your fundamental neutral marketing exists.  Yeah, I’m causing the need to puff again, my bad.  What must be conveyed is that committed original marketing channel that has developed over a span of years cannot be magically replaced with a little spend here and there.  Surround yourself with marketing minds that think Big Picture while not being afraid of experimenting along the way.  The biggest danger with “so-called” A/B beta testing is that I have yet to find two different dealerships that possess the same variables to make the testing competent.  Again, it would make another great blog.
  • Preserve the Brand In All Advertising Channels – Ah, yes, another pillar to our thinking and execution.  What are the greatest perfected Big Time brands that come to mind?  I immediately think of brands like Walt Disney, Nike, McDonald’s, Coca Cola, New York Yankees, Notre Dame, Rolex, Harley-Davidson, etc.  Do these brands ever just wing it or let their employees and/or vendors use it how they see fit?  Again, “Hell to the NO!” Then why on God’s green Earth do we allow our brand to be abused.  Here is the deal.  Seek greatness, and greatness is more often likely to be achieved.  Act like the Bad News Bears, and I am certain those results are also most likely.  Demand excellence with the dealership’s brand.  It is not ok to stretch or skew the logo or use slightly different hues of the brand’s colors.  It really does matter.  Dealers over the years will spend hundreds of thousands of dollars advertising in hundreds of different channels.  Those dollars invested in advertising deserve the very best, regardless of the message.  Yet, we as an agency witness daily salespeople, vendors, and even managers putting so much at risk with sloppy protection of the brand.  I am not just talking about the look.  Curb stoning is still illegal and exposes the dealership to avoidable financial risk.   Without working too hard, I could pull up hundreds, if not thousands, of examples where your own employees represent themselves as dealers and advertise your dealership without any regard for the real danger of your attorney general sending your dealership into an unneeded frenzy.  Imagine an environment where we get our sales professionals spending all of their time calling and reaching potential buyers as opposed to using their time to play advertising professional because they closed a laydown that most likely would have made it to your sales funnel with or without them.  It certainly is not just the sales team putting dealers at risk and wasting money.  We witness daily advertising spend by vendors that are more focused on them taking credit for the sale than getting your brand and messaging out to the masses.  Bottom line, start preserving your brand in all advertising channels.  ROI will be better, and so will market sustainability during difficult times.
  • Full Immersion Always Beats A Toe In The Water – This should stand on its own without much explanation.  This fundamental was developed after years of spending time with and paying attention to hundreds of dealer principles preach what works for their dealership.  I have sat in on enough Dealer 20 groups to know they all are passionate about what they believe in respect of their marketing successes.  In fact, they embody the spirit of full immersion, and I mean no holds barred.  With my sense of humor, I love pointing it out to them.  One will always speak up and present how radio is the only way for them to sell vehicles, and it is proven to be the best. Only to have one of their peers speak up and say, “Bull *@#!” This peer then exclaims how they “tried” radio, and it was terrible.  However, they kick ass with Facebook.  Only to have this cycle continue around the table until Broadcast TV, Google, YouTube, Cable, Direct Mail, and even Craigslist have all had their moment of glory with top-shelf recommendations from strict practicing believers.  Why are they all convinced that theirs is the best way to move forward and the others are a waste of money?  Because of the medium they believe in-they are fully immersed in it and dominate it.  This leads us to another fundamental that I did not list in my top 10 as it really fits under full immersion.  This just in: ALL ADVERTISING WORKS!  No big shocker, but when you tell people about your dealership, where you are located, and that you would like their business, it will work regardless of where the message is being sent.  Yes, some are better than others, but that can only most fully be decided when considering budget (it is the driver), frequency (3 to 9 thing), and CPM or CPP (Cost per thousand or per point).  Never doubt another dealer’s advertising proclamations when they share their advertising success stories.  Just know that when you try to put a toe in the water and do not experience the same feeling or results, it does not mean it doesn’t work or was a waste of money.  I love analogies, so follow that you tried doing ten push-ups a day for three months because someone told you that push-ups are the secret to their amazing looks, yet you did not get their results.  Odds are they are often doing double or triple the push-ups a day with better form and discipline.
  • Activity Always Measures Advertising Success Better Than Gross Sales – Yes, Yes, Yes!  Now before I dive in, know that I fully understand the ultimate month-end goal for a dealer should be a YOY increase in total sales and overall gross.  Any competent vendor or agency serving the automotive industry should also be cognitive of this ultimate objective.  However, it is a lousy measure of whether or not the advertising dollars being spent is working.  What do you do with a salesperson that burns through ups?   Only two real choices.  One, pull them off the floor and start training or immediately retrain if they seem to check all the other boxes to retain them.   Two, fire them as soon as possible.  Yes, all results should be measured monthly as this business is really about 28, 30, and 31 day all-out sprints for everyone (vendors and agencies too).  The best-case scenario is an agency or vendor that continually communicates with a dealership’s management team about current activity.  Activity comes in many forms.  Phone ups, web ups, emails, lead inquiries, walk-in traffic, social media interactions and ups, website traffic, referrals, and any number that moves and can be tracked in relation to sales floor activity that can lead to sales.  I have personally been a General Sales Manager floating the desk for years for the Chrysler umbrella and Hyundai.  If you think I would ever blame myself first or my staff for inadequate sales results, then give me a call; I have a lifetime collection of material items that I would love to sell.  Exactly, we all got together and collectively blamed the advertising of the times.  If only the advertising were better, if only we could write the ads, and if only we were able to pick what advertising we use, then we would slay it.  If we received more leads, then they were all junk or bad leads.  If we had more phone ups, then we were getting bad phone numbers, or we were setting appointments (wink, wink), and they weren’t showing up for some reason beyond our control.  You get the picture. If we get a management team that is communicating with a competent advertising leader, we can start measuring the right things and then find the best tools to help convert more sales.  More leads might mean the need for more sales staff, inventory may have to increase to reflect the faster turn opportunities, or we may just need to train, train, train so we all are hyper-focused on selling more for more money.  Pay close attention to activity.  Activity leads to productivity.  When Mr. Brady would tell me, it was a lousy day because we didn’t sell a car.  I would retort; it was an awesome day because we set 9 new appointments, the phones were ringing like crazy today, and the weather this weekend looks fantastic.  I could sleep with a smile because I knew we were doing all the right things, and we were about to have a kickass weekend or finish.  And on a day, we sold 3 or 4, I would often not sleep well if I knew we didn’t set a single appointment that day and traffic had dwindled.  Just because I got the kudos from the boss did not mean troubled waters were behind us.  Start paying attention to all activity, and you will be stunned by how awesome your dealership can become.
  1. Peak Seasons Deserve Peak Spending – This simple fundamental is really one I wished more dealers would hold our own feet to the fire.  The lazy, simple solution is to pick one budget and run it month in and month out.  It should not take a genius to recognize that spending double on advertising in March would yield better ROI than spending the same amount in November.  As discussed earlier-how to build a budget- use it to plan your monthly spending to match the natural ebb and flows of an automotive year.  We know February and March brings the early tax money.  May can be goofy with school ending and Memorial Day, but June comes right back with solid results.  August gives us back-to-school distractions, but September always seems to be that last killer month before the year closes.  October can be just as good, sometimes it just depends.  Bottom line, as the market shifts and changes, so should your budget.  If you pulled your budget wisely in March and April 2020 at the start of the pandemic, then why would we not be spending double in the middle of record sales and profits?  Kingsford Charcoal spends over 90% of its advertising budget between May and August with good reason.  Charcoal sales in January just struggle more no matter how much wind you put in those sails.  The time to push harder is when the yields are higher.  With this mindset, remember that your messaging should steer into the market conditions.  If trades are worth more money, tell your customers to bring in their trades and receive record value.  If interest rates are ridiculously low, tell them rates are unprecedented and will not last long.  If you are blessed with more selection when everyone else is out of vehicles, then brag like crazy that your inventory selection remains high, have your pick of the litter.  So if now is your peak season, ask yourself why you are sitting on the sidelines watching while everyone else is raking in the sales. 

See how easy this really is when the thinking is trained and focused.  Anybody and everybody can indeed place advertising and marketing.  A weak realtor can make a lot of money in a great market, just like they will leave the profession when the market tightens, and you have to do all the little things that professionals do every single day without thinking about it.  Anybody can brag about making money in a stock market that saw record profits for four straight years, but when it tightens and becomes a real bear, they run for the hills and often go bankrupt.  In every market condition, there are always dealers consistently making money.  Historically, they’re the ones that stay in their lane and team with great people who share a common goal.  If our dealership consistently feels like one that’s always wanting or just so close to having a big month, then maybe it’s time to leave the advertising and marketing to competent professionals and leave the lead follow-up, appointment setting, and closing deals to our better-trained sales professionals that inhabit our showroom floors.