Guide: Which Digital Ads are Right for Your Car Dealership?

It’s no small feat to make your car dealership stand out from the crowd. With consumers increasingly turning to online platforms for vehicle research and purchasing decisions, car dealerships must harness the power of digital advertising to remain competitive and meet potential customers where they are.

Digital ads offer car dealerships an unrivaled ability to fine-tune their advertising efforts and connect with their target market. Unlike traditional advertising, which often casts a wide net and hopes for the best, digital ads enable precise targeting, eliminating wasted resources on irrelevant demographics. 

In this guide, we’ll delve into digital advertising, exploring the various types of ads available for car dealers and providing guidance on how to select the right mix to meet your dealership’s unique business goals. Whether you’re a seasoned digital marketer or just starting out, this guide will equip you with the knowledge to create a powerful digital advertising strategy that drives success for your dealership.

Understanding Digital Ads for Car Dealerships

Advertising today goes beyond billboards, radio, and TV. Today, a well-crafted digital advertising strategy is the key to reaching your target audience. In 2023, US businesses invested a staggering $239 billion in digital advertising, recognizing the true power of reaching consumers where they spend much of their time – online. 

So, let’s go back to the beginning – what is digital advertising? At its core, digital advertising refers to any marketing and advertising effort that takes place on the internet, encompassing a wide array of tactics designed to connect with the potential customers. This includes the search results they see on Google or the sponsored posts that appear on their social media feeds. 

Car dealerships, with their unique challenge of reaching local audiences, building trust, and showcasing complex products, have found a powerful ally in digital ads. The automotive industry is expected to spend over $14 billion on digital advertising in 2024 alone, a testament to the effectiveness of this approach.

Digital ads offer several key advantages for car dealerships:

• Targeted Reach: Dealership digital ad campaigns can be hyper-targeted, allowing you can show ads to people in your specific geographic area who are actively searching for cars, and go even more granular to target people with specific models or fuel sources.
• Website Re-Engagement: Digital ads not only attract new website visitors, but rekindle the interest of those who have already interacted with your dealership website in the past but didn’t convert. Re-target these shoppers with ads directly related to their website actions.
• Measurable Results: You can easily track exactly how many people saw your ad, clicked on it, visited your website, or even made a purchase. This data is invaluable for refining your dealership’s marketing strategy. 
• Flexibility: Unlike traditional advertising, your digital ad campaigns can be updated or paused quickly and easily to respond to market trends and business needs. 

With the capability to tailor your ads to specific interests, behaviors, and demographics, you can ensure your message resonates with those most likely to convert into customers for your dealership. 

Let’s take a closer look at  the four key types of digital ads that have proven to be particularly effective for car dealerships:

1. Google Search Ads: Text ads at the top of Google’s search results.
2. Google Display Ads: Image-based ads on millions of websites and apps.
3. Meta Ads: Facebook and Instagram ads.
4. LinkedIn Ads: Targeted ads that reach specific industry professionals.

We’ll dive deeper into each of these ad types, exploring their unique benefits and how they can be leveraged to drive success for your dealership. 

Google Search Ads for Dealerships

Google Search Ads are integrated into the majority of search result pages that are generated when someone enters a search query into Google. Google Search Ads are a type of digital advertisement that dealerships can use to reach shoppers who are already searching online for vehicles – or any other relevant topic. 

When someone searches for a keyword(s) related to your dealership and the products or services you offer, for example ‘used cars near me’ or ‘Honda CR-V in Houston,’ Google will display a list of search results that best fit the query. At the top of the search results page, there will regularly be 2-3 text-based paid ads that match that search query. These ads are from businesses that have bid on the keyword(s) and have been deemed by Google to be the most relevant. Learn more about Google’s bidding algorithm here.

When someone clicks on a Google Search ad that you have created and bid on, they will be taken to your specified website or landing page, and from there you can provide more information like you would with any other website visitor. 

There are many benefits to using Google Search Ads for your dealerships:

• High intent-targeting: Customers who are actively searching for cars and services that you offer are more likely to convert. 
• Local targeting: Ensure your ads are shown to users in your specific geographic area, maximizing relevance. 
• Cost-effectiveness: With a pay-per-click (PPC) model, you only pay when someone clicks on your ad. This gives you better control over your budget. 

Managing Google Search Ads at your car dealership will require taking additional steps and training. The Google Ads platform is a skill in itself, so the first step is to hire, outsource, or train someone to make sure the person working on your ads has the skills to manage and optimize campaigns. Only after this should you set up your free Google Ads account and create your campaigns. 

The budget for Google Search Ads can vary depending on factors like your location, the competitiveness of your keywords, and your target audience. However, the average cost-per-click (CPC) for automotive Google Search Ads is approximately $2.00-$3.00. They also boast an impressive conversion rate of 7.98%, higher than many other industries. 

Google Display Ads for Dealerships

Instead of relying on specific search queries, Display Ads showcase your dealership with ad placements across a vast network of websites, apps, and even video platforms like YouTube. This allows you to reach a wider audience and stay top-of-mind with potential customers, even when they’re not actively searching for cars.

Unlike the text-based Search Ads that appear at the top of Google search results, Display Ads are more visually engaging. They come in various formats, including banner ads, video ads, shoppable ads, and more. These ads often feature eye-catching visuals, making them more likely to grab the attention of casual browsers. 

Google’s own algorithms determine which ads to show based on the user’s interests, demographics, and browsing history. This means your dealership display ads will be shown to users who are more likely to be interested in your products and services, even if they aren’t actively searching for them at that moment. 

Google Display Ads offer unique benefits that complement your dealership’s Search Ad campaigns:

• Wide Reach: Expand your reach beyond search results and connect with potential dealership customers across a vast network of websites and apps.
• Retargeting Capabilities: Re-engage visitors who have previously interacted with your dealership’s website. 
• Visual Appeal: Capture the attention of potential dealership customers and create a lasting impression with visually engaging ad formats. 

To run Google Display Ads, car dealerships need high-quality images and videos, and eye-catching marketing copy to match. You’ll also need to carefully select and manage your ad placements to ensure your ads are reaching the right audience, reviewing regularly. As with Google Search Ads, you’ll need to enlist someone with the appropriate skills to manage the process.

While the average conversion rate for Display Ads is much lower than Search Ads (0.72%), they are generally more cost effective on a cost-per-thousand impressions (CPM) basis, typically ranging from $1.00-$3.00. 

Meta Ads (Facebook & Instagram) for Dealerships

Facebook and Instagram, owned by Meta, offer an opportunity for dealers to connect with a wider audience. These platforms boast billions of active users across diverse demographics, making them a valuable channel for car dealerships looking to engage potential buyers at every stage of the buying journey. 

Meta Ads provide a range of benefits for car dealerships:

• Diverse Audience: Reach a wide range of demographics, from young adults exploring their first car purchase to established professionals seeking a luxury upgrade. 
• Advanced Targeting: Utilize Meta’s powerful targeting options to reach specific audiences based on their interest, behaviors, demographics, and even purchase history. Additionally, retargeting allows you to re-engage users who have previously interacted with your dealership online.
• Visual Appeal: Leverage the visual nature of Facebook and Instagram to showcase your dealership inventory’s best features through captivating images and videos. 

Meta Ads offers endless possibilities for car dealerships to showcase their inventory and attract new customers. Some successful examples include:

• Carousel Ads: Showcase multiple car models with different features and price points.
• Video Ads: Highlight the performance and capabilities of specific vehicles available at your dealership.
• Lead Generation Ads: Allow users to easily request a quote or schedule a test drive at your dealership without leaving the Facebook or Instagram platform. 

To effectively run Meta Ads, make sure you focus on high-quality visuals and engaging ad copy, consistently manage and monitor ad performance, and ensure that you are familiar with the Meta Ads Manager platform and advertising guidelines. This will help you get the most out of your ads and your ad budget.

Meta Ads, particularly Facebook Ads, have proven to be highly effective for car dealerships. The average conversion rate for Facebook Ads in the automotive industry is 9.21%, one of the highest across various industries, while also maintaining a relatively low CPC of around $0.50-$2.00. Instagram also has a higher-than-average engagement rate of 1.22% for automotive companies.

By incorporating Meta Ads into your dealership digital advertising strategy, your dealership can tap into the immense potential of Facebook and Instagram to connect with a wider audience, generate leads, and drive sales.

LinkedIn Ads for Car Dealerships

So far, we’ve explored Google and Meta Ads, which are excellent for reaching a broad audience of potential car buyers. But what if your dealership caters to businesses, offering fleet sales or leasing options?

LinkedIn, the world’s largest professional network, offers a unique advertising platform for B2B marketing. LinkedIn ads allow you to target professionals based on their job titles, industries, company size, and other relevant criteria. 

Imagine a LinkedIn ad with a sleek image of a fleet of your dealership’s latest models, accompanied by the headline “Upgrade Your Company’s Fleet with Our Exclusive Leasing Options.” The ad could target professionals with job titles like ‘Fleet Manager,’ ‘Purchasing Manager,’ or perhaps ‘COO’ of companies within a certain size range and radius. 

LinkedIn Ads offer several key benefits for dealerships:

• Professional Audience: LinkedIn boasts a highly engaged audience of decision makers and professionals.
• B2B Targeting: LinkedIn’s advanced targeting options allow you to precisely reach the right people within business interested in your offerings.
• Advanced Targeting & Retargeting: You can use a variety of targeting options, including job titles, industries, company size, and even specific skills or groups, as well as retargeting users who have visited your dealership’s website or engaged with your marketing content.

To run LinkedIn ads you’ll need a well maintained LinkedIn Company Page showcasing your dealership’s brand and products, and a well developed professional and engaging content strategy that resonates with your target audience. Every ad platform is different, so design visually appealing ads that are optimized for LinkedIn’s own platform and audience using their specified guidelines. 

LinkedIn Ads can be more expensive than other platforms, with an average CPC of $5.26. However, this reflects their ability to reach a highly targeted, professional audience that often translates to a higher conversion rate. In fact, LinkedIn Ads in the B2B sector, including automotive fleet sales, have an average conversion of 6.1%.

While LinkedIn Ads might not be suitable for every dealership, they offer a powerful tool for those looking to expand their reach into the B2B market and connect with decision makers who have the budget and authority to purchase fleet vehicles.

Leveraging AI for Dealership Marketing

While the digital advertising landscape has already transformed the automotive industry, an even more revolutionary force is gaining speed: artificial intelligence (AI). Over 80% of digital marketers are already using AI to supercharge their strategies, and it’s no surprise why. AI-powered tools can analyze vast amounts of data, dynamically allocate budgets, and optimize for specific marketing goals, allowing dealerships to reach the right customers with the right message at the right time.

AI-powered digital advertising tools harness the capabilities of machine learning and data analytics to optimize your advertising efforts. It goes beyond simply automating tasks. It learns and adapts, continuously refining your campaign for better results. This means you can make data-driven decisions, personalize customer experiences, and ultimately achieve a higher return on your marketing investment. 

Some popular AI tools used in digital advertising include:

• Chatbots: AI-powered chatbots can engage website visitors in real-time, answer their questions, collect contact details, and encourage them to book demos.
• Send Time Optimization: This feature analyzes individual user behavior to determine the best time to send emails, maximizing open and click-through rates.
• Predictive Analytics: AI can predict which customers are most likely to convert, allowing you to focus your efforts on high-potential leads. 
• Ad Creative Optimization: This tool can analyze the performance of different ad variations and automatically select the most effective ones for specific audiences.

Businesses that embrace AI in marketing see a significant improvement in their key metrics,  often experiencing a 20-30% boost in conversion rates and ROI. For car dealerships, the benefits of AI-powered marketing include:

• Automatic Budget Allocation: This tool dynamically optimizes your ad spend across different ad platforms, ensuring your budget is allocated where it’s most effective.
• Learning and Optimization: AI continuously learns from your campaign data, making real-time adjustments to targeting and ad creatives to improve performance.
• Performance Tracking: Get detailed insights into your campaigns, allowing you to track progress, identify opportunities, and make informed decisions. 

The impact of AI on dealership marketing isn’t just theoretical. Dealers that have taken advantage of Fullpath’s AI-powered marketing solutions have seen 1,266% marketing ROI, CPL of $14.02, and 81% increase in ad clicks.

Choosing the Right Digital Ads for Your Dealership

Now that we’ve explored the diverse landscape of digital ads, the million-dollar question remains: Which digital ads are right for your car dealership?  The answer depends on your specific goals, target audience, and budget.

Your Dealership’s Goals

If your primary goal is to boost sales, Google Search Ads are a strong contender. They capture high-intent users who are actively searching for cars, making them more likely to convert. Combining this with Meta Ads can help you reach a broader audience and re-engage potential customers who may have shown interest in your inventory.

For lead generation, consider a combination of Google Display Ads and LinkedIn Ads. Display Ads can create broad awareness and capture leads through retargeting, while LinkedIn Ads can help you connect with decision-makers in businesses interested in fleet vehicles.

If you’re looking to raise brand awareness, Meta Ads can be particularly effective due to their wide reach and diverse audience. Supplement this with Google Display Ads to ensure your brand is visible across a vast network of websites and apps.

Your Target Audience

Who are your ideal customers? What’s their age, income level, gender, and interests? Understanding your demographics will help you tailor your ads and choose the right platforms. For instance, if you specialize in luxury cars, LinkedIn might be a better fit than Facebook for reaching high-income professionals.

Where are your potential customers located? Geo-targeting your ads ensures that you’re reaching the right people in the right areas. For local dealerships, this is crucial for maximizing relevance and minimizing wasted ad spend.

Your Budget

Your budget will naturally influence your ad choices. If you have a limited budget, focus on the most cost-effective options that align with your goals. Google Search Ads, while highly effective, can be more expensive than other platforms. However, their high conversion rates often justify the investment. Meta Ads and Google Display Ads tend to be more budget-friendly, making them a good starting point for smaller dealerships.

Your Resources

Do you have a dedicated marketing team with expertise in digital advertising? If not, you may need to outsource or invest in training to ensure your campaigns are managed effectively. Assess your familiarity with different ad platforms. Some, like Google Ads, require a learning curve, while others, like Meta Ads, offer more intuitive interfaces. Choose platforms that align with your team’s skills and resources.

Digital Ads: Your Dealership’s Future

By combining the strengths of different ad formats and platforms, you can create a symphony of marketing messages for your car dealership that resonate with your target audience, build brand loyalty, and ultimately drive more cars off your lot.

Remember, the automotive industry is constantly evolving. Stay informed about the latest digital advertising trends and technologies, and be prepared to adapt your strategy as needed to stay ahead of the competition. With a well-crafted integrated marketing plan, your dealership can thrive in the digital age and achieve lasting success.

Ready to accelerate your digital advertising? Fullpath is at the forefront of AI-powered digital marketing for car dealerships. If you’re ready to leverage the power of AI and data-driven insights to transform your digital advertising strategy, book your demo with Fullpath today.