CHICAGO -

Online activity data is great for telling you how you are performing on third-party websites. But what about how those sites are performing for you?

Are you actually getting a good return on that investment? What is your cost per VDP? Cost per lead? We are always concerned on whether the return is there on our investment. Your online advertising investment should not be any different.

The average dealership nationwide is spending close to $8,000 per month advertising online. Many dealerships spend upwards of $15,000 to $20,000 per month. That is a huge chunk of change. Do you measure your ROI?

Benchmarking your sites against each other to see what this activity is actually costing you is imperative. What is your actual cost per vehicle detail page click? How much is each lead these sites provide costing you? And does the money you spend funnel people to your website?

This data ensures you know how these third party sites are performing for you and what those advertising dollars are actually producing for you. This can help make decisions on where you actually allocate spend and what changes make sense.

Now I am not advocating spending a bunch more money. However, it is interesting to note that while 77 percent of customers find their way to your dealership from the Internet or a referral, only 25 percent of advertising spend is focused on the Web. The bulk of the remaining spend: television (20 percent), newspaper (20 percent), and radio (16 percent). With so much of our business coming through the Internet you have to wonder if it makes sense to alter the balance a little.

After analyzing the data the next question is how do you improve? When vehicles are underperforming the first instinct is to lower prices. And sometimes this is absolutely necessary. However, any monkey can stand in front of a room and tell you that if you sell cars for cheaper they will sell faster. The key is in selling value online.

Consumers are doing 11.5 hours of research online. Do you think telling them the car was “only driven on Sundays to and from church” will make them want to buy? Today transparency is king.

Answer the questions they are asking and you will win. Toss cheesy dealer speak or a VIN explosion out there and you are more than likely getting the dreaded click past.

Take certified pre-owned for example. There is a lot of value in your CPO programs. Do you think the customer knows that when shopping online? Do they know why the certified car is more expensive than the non-certified competitor? Not unless you tell them. It is true about all aspects of your used inventory.

This is all about being relevant in how you describe your cars. Here are the four keys:

—Tell them why the vehicle fits their needs: This will vary depending on if you are targeting a family buyer, luxury buyer etc. For example, if it is a family buyer explain the great safety features and the added storage capacity.

—Limit their buying risk: Things like Carfax 1-Owner and explaining a CPO program makes the consumer feel more comfortable they are not buying a lemon.

—Affordability: Everyone wants a good deal. Explain how you are lower than KBB or NADA’s suggested retail price to help prove the point. They reference those guys on trades all the time right?

—What makes you different: This is both the car and your dealership. Was the car originally bought and serviced by your store? Does it have 4 new tires? What unique offerings does your dealership provide? Time to brag about yourself.

Editor’s Note: Steve Miner is the director of product marketing at FirstLook. This entry can be found within the Drive Your Numbers blog here.

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