LotLinx, a leading VIN demand platform, has announced on average, paid search spend per vehicle has increased, not decreased, since the COVID-19 outbreak.
Immediately following the pandemic outbreak, SEM spend across the automotive industry suffered massive cuts, but it is slowly on the rise. A recent LotLinx analysis found that SEM marketing for new vehicles is even higher than used, despite inventory shortages.
“SEM spend is still down about 15%, but because there is so much less inventory, it’s all concentrated on a small percent of inventory, so spend per vehicle is much much higher,” said Lance Schafer, general manager of product and technology at LotLinx.
As the new vehicle inventory shortage continues, there are fewer vehicles to shop online. This reduced inventory means organic traffic for available vehicles has significantly increased. That increase in organic traffic should be more than enough to sell those VINs, and dealers are finding that they don’t need to supplement with expensive paid campaigns.
Schafer advises dealers that proper data analysis is crucial to keeping track of trends like these and to streamlining marketing spend amid COVID-19 obstacles.
Jeremy Wiggains, general manager of Vanguard Kia of Arlington, diligently monitored COVID’s influence over his SEM market. After realizing the trend of overspending, he was able to reallocate SEM budget to his LotLinx campaigns while many competitors pulled back on their advertising all together. The increase in in-market shopper traffic to both new and used inventory enabled him to gain control of his market share and improve his sell rate to 67%. A recent LotLinx case study details Wiggains success with this approach.