3 Ways Vendors Take Advantage of Misinformed Auto Dealers - AutoSuccessOnline

3 Ways Vendors Take Advantage of Misinformed Auto Dealers

Take your time when selecting a new vendor and ensure they are a great fit and a true partner.

In today’s automotive retailing world, there are hundreds of digital marketing vendors to choose from. With so much choice, auto dealers should have an easy time finding a trustworthy partner, right? Not quite. Most vendors are looking out for their best interests to fulfill their sets of key performance indicators (KPIs) and don’t actually pay attention or care enough if you sell more cars! These same vendors are more master swindlers of your perception rather than actual experts at digital marketing that drives results. This is the sad, state-of-the-union truth of today’s average vendor/dealer relationship, so let’s pull back the curtain a bit and expose some things dealers should be aware of.

1. Agency Reporting & Performance Reviews

Have you ever attended your monthly strategy review call with your agency rep, only to be greeted by big, bold, green results month after month after month? Vendors, more often than not, care more about their own retention and revenue than showing you the cold, hard truth regarding performance. 

Performance is multidimensional and fluctuates depending on a varying degree of factors, such as current market conditions, inventory levels and more. That said, the grass isn’t always greener, and if it looks like it is — run. A solid partnership is a two-way street of transparency between agency and dealer. Agencies should provide context on a continuous basis rather than just a two-dimensional increase or decrease in figures that, by themselves, are irrelevant.

2. Advertising Management Fees as a Percentage of Spend

“I want to spend more just to spend more,” said no dealer ever. Yet, this has been the beat that the industry has danced to in the digital advertising space for eons. Agencies try to get dealers to spend more, because they make more money as a result. Before throwing all your money into the fire and reaching into your pocket for some more to burn shortly thereafter, ensure you have a solid, organic footprint first and foremost. 

You wouldn’t build a house without laying a solid foundation to start, right? Probably not. Additionally, digital advertising agencies frequently push (name, dealer, location) campaigns with a large percentage of spend, because it makes their results shine — but not yours! These campaigns usually have a lower cost per click but at the expense of eating your own organic search/search engine optimization (SEO) efforts as a result. You end up paying for traffic you would have received regardless. You wouldn’t want your house rotting away at the very foundation that holds it together either, would you? Nope, I didn’t think so. 

3. OEM On Program Digital Marketing Services

Being “on-program” with an OEM-certified provider has its pros and cons. The obvious pro is the financial kick-back (co-op), where the major con is being part of a blanketed, cookie-cutter conglomeration, where strategies are just another brick in the wall. This takes the competitive edge out of the equation and puts the OEM at the center, which isn’t always the best outcome for the dealer. More often than not, the financial kick-back is enough for dealers to take a back seat on many important efforts, including the most important one: a solid organic presence. 

A good SEO strategy is one where duplicate content is non-existent, and when a dealer enrolls in an OEM program, required, syndicated landing pages are usually included by default and nearly impossible to avoid. This is terrible for SEO and will make your dealership no different than the dealership down the street that is enrolled in the same program and has the exact same content on its website. 

Agencies fail to be transparent to dealers about this because it’s a conflict of interest with the agreement that they have with the manufacturers. The conundrum ends up being: Do you save money and get the same cookie-cutter services that the dealer down the street has, or do you spend a little more for a competitive edge? I suggest the latter if it makes sense for your dealership to do so. 

Not All Vendors Are Created Equal

There are some good vendors and far too many bad ones. Sadly, most dealers are running too fast to see through the smoke and mirrors. Remember that if it looks too good to be true, it probably is! Take your time when selecting a new vendor, and ensure it is a great fit and a true partner.  Stop firing your vendors every two years when a new general manager comes on board, and start thinking better. Think bigger. Think of the long-term objectives your dealership can conquer with partners that keep your success at the hearts of their universes. Work with them closely and long-term to understand performance as it pertains to your internal KPIs. Happy selling.

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