Location is considered king in the world of real estate. If you feel the auto industry is tough, try real estate. My wife is a realtor, but unlike others, she is thriving because she understands the need to market homes digitally and through several online portals. (You wonder who gave her those ideas?) In the dealership realm, surprisingly, location is also key. However, It is not where your dealership is located that matters most, but the location of your digital advertising.

Those of you reading Digital Dealer magazine are already on the path of online profitability. Those of you taking workshops, seminars, webinars, and attending conferences are achieving significant Internet sales. Those of you staying abreast of market trends, new technological solutions, and your own internal metrics are taking the right steps. All dealers have web sites. They have their inventory listed online. Most are dedicating budgets to third-party leads, SEO, SEM, and other digital marketing tactics. These dealers have taken the next step in becoming more than a dealership with an Internet department, but an Internet dealer. The problem arises when dealers are dedicating their budgets to online initiatives everywhere. Vendors can provide one good reason to be advertising on their site, but online saturation in this market is an impossibility.

Digital display ads are the most common form of online advertising. You find these as banner ads, skyscraper ads, leaderboards, and those aggravating pop-up boxes. These can contain text, graphic images, interactive material, or multi-media rich content. These online ads are very similar to any other newspaper or billboard ad, except a digital ad’s effectiveness can be tracked. You cannot click on a billboard. That form of advertising is simply for brand/dealer recognition. However, dealers don’t need location/brand recognition unless they are a new dealership or have recently relocated. If you’ve been in the same location for 25 years, you don’t need dealer awareness. In today’s market, you need to be present and available to shoppers while they are on the Internet researching, regardless of their place in the sales funnel. The primary goal of a digital ad, as we know, is to get the attention of online visitors and have them click onto your ad thereby linking them to your web site. Obviously, these online ads can deliver traffic to your site. Much like a realtor placing an “Open House” sign at an intersection, pointing you in the direction of the home, the digital ad offers the “driver” the same opportunity. Those who are prompted by the sign to visit the open house/web site would be considered a “click-through.” There is no use for a realtor, or for a dealer owner, to post a sign advertising a location unless the end result drives someone to see you.

Dealers must tighten the notches on their budgetary belts and realize they cannot be everywhere. Take a close look at your digital ads and determine if they are getting the impressions and the click-throughs for the money. It takes a little, simple math.

For example, at my former dealership, we briefly ran skyscraper ads running on the web site of a local radio station. Impressions were enormous, but the click rate was minimal. Considering it was not an industry-related site, I shouldn’t have expectations that the web visitors clicking to the web site were very far down the sales funnel. If you receive 100 clicks on your ad and your web site converts, say, 5 percent of every visitor to a lead, you can expect to receive five leads. If your dealership has a good closing ratio of your own web site leads, call it 20 percent, anticipate to realistically sell one car. Continue to drill. Does your average gross profit from one Internet sale equal the cost of your digital ad on a site? If you aren’t seeing the return on investment, rethink the need to be on the site. Is it a good location? “Breaking even” doesn’t pay the bills. You may want to pack up and set up your digital shop elsewhere.

Many use their gut instincts when determining where to have the ads placed online, while others use logic. I contacted my ad exec-extraordinaire for my former dealer and asked her the first step in deciding where to place a dealership’s digital advertising. Beth Hoover, account manager for Pinnacle Advertising and Marketing, said, “Advertising web banners on specific sites, based on behavioral targeting or something as broad as visitor demographics is our first recommendation. During and at the close of each campaign, reviewing click throughs and impressions can help determine the ROI. Is it really worth it? I believe the success of any campaign requires many components, including the creative, the idea behind the creative, banner placement (leaderboard, skyscrapers, etc.), number of visitors clicking on the site, time spent on the site, the question “are you there when the customer is looking?” and lastly, common sense. In other words, if you own a Lexus dealership, posting web banners on the local watering hole might not be the best way to spend your dough.”

Beth touched on behavioral targeting and visitor demographics that are becoming more of a focus now more than ever. An ad’s location is becoming a science. The top Internet marketers and advertising agencies are taking their responsibilities seriously by geo-targeting (delivering different digital content based on the geographical location/cultural market) the dealer’s potential customer base. It is essentially niche-marketing based on specific geo-locations of your anticipated customer base. The understanding of that location, not just of the digital advertising campaigns, but of the online shoppers as well, is imperative.

When it is time to review your ad budgets and allocate new or existing dollars to different opportunities, realize that the location of your digital ads will predicate the success of the ad dollars. Simple math determines the ROI. If a site wants your advertisements, but the ad’s success on the site cannot be tracked, only justified, don’t move into their neighborhood. You won’t be happy living there. Instead, do some research on that area that is best for you. Make sure you are going to like your neighbors and the home will fit your financial needs. Unlike most real estate ventures of late, buying land on a web site should show dealers a quick profit. So focus your efforts on the three most important aspects to your digital advertising. Location, location, location.