• by Ray Schultz , December 28, 2018

Auto dealerships are overspending on some channels and underspending on others. But only the largest are achieving the best results from email, according to a recent study by Outsell, working with partners RXA and Vistadash.

The companies surveyed 300 dealerships with an aggregate media spend of $72 million. The objective was to determine what is working and to “set benchmarks for the industry and eventually to help any dealer calculate their own marketing ROI,” states Mike Wethington, founder and CEO of Outsell.

They found that half are underspending on social media and a third are overspending on search engine marketing. But this tactic is not necessary for large dealerships that get good results from organic search.

Dealership size has an impact on return on marketing investment (ROMI).

Smaller dealers are seeing results from paid media and referrals. But larger dealers are doing better with display and email.

However, contrary to what some dealers believe, market size has little impact on ROMI. 

Some dealers have improved their results by shifting their budget dollars.

“By re-allocating a portion of our existing spend—and not even adding any spend—we were able to generate a 17 percent increase in gross profit,” states James Kurtenbach, marketing director at Schomp Automotive and a member of the dealer advisory board for the study.

One challenge dealers face is multi-touch attribution, “a problem that’s been vexing auto marketers since the introduction of the Model T,” states Brian Pasch, founder of PCG Companies.

The study authors examined data on 420,000 customers and 3.5 million customer interactions.