With Google placing more significance on targeting the right locations, it is increasingly important to have an accurate understanding of the geography of your customers. View the following case study on auto industry sales for insight into Adpearance’s Digital Advertising services and tips on how to geo-target for successful digital ad campaigns.
If you weren’t convinced of the importance of thinking spatially in our first post on visualizing data, consider Google’s newest documentation on quality score and its importance for your digital campaigns. Improving quality scores allows advertisers to reach higher ad ranks at a cheaper price; it is a signal to Google that you are able to drive traffic and produce advertising results. Google’s guidelines now indicate the importance of geographic performance. In other words, over-targeting your campaigns can be damaging to your account’s quality scores.
Let’s view some data and glean a few insights on how to take advantage of Google’s new emphasis on spatial performance.
The Case Study
We analyzed a subsection of our auto clients’ sales spatially to come up with a few generalizations on how to best target for digital campaigns (warning: nerd talk coming).
The map below is graphic representation of our study areas. As the map indicates, most of our sample is concentrated in more densely populated areas; therefore we would expect slightly modified results for rural areas with less population density.
We analyzed the individual sales map of each client and calculated the number of sales that occurred within a 5-mile and 10-mile radius from the dealership, and compared that to their total sales over the same time period.
We then calculated the percentage of sales that occurred within these buffer zones.
- For our 5-mile buffer, the sample range is 45.83% - 79.11% with an average of 55.04% and a standard deviation of 8.37%.
- Our 10-mile buffer sample range is 54.12% - 81.80%, with an average of 71.60% and a standard deviation of 7.71%.
The map below visually demonstrates the analysis we undertook. It also nicely illustrates the above information, indicating that the majority of sales are clustered within the 10-mile radius.
Another interesting fact we took away from our analysis is that 44% of dealers' top-selling zip code is different than the zip code they are located in. Also, FIAT dealers fall well below the average, indicating a much broader sales territory than other car makes included the study.
As with any case study, extrapolating results needs to done with caution. Check out the following takeaways and combine them with your local expertise for the best results.
Utilize the data at your fingertips.
This may seem redundant, (and hopefully you’re already doing so) but take advantage of your sales history to limit wasted advertising spend by only targeting the areas where your customers are concentrated.
Control your home market.
Our analysis indicates that on average, over 55% of all car sales happen within zip codes just 5 miles around your dealership, and 71% happen within 10 miles. Advertising farther away, at the expense of your local area, reduces the odds that an online shopper will be converted into a buyer. Now, some may argue against spending advertising dollars where people already know them best, but we view this a lot like the argument surrounding whether or not to advertise on your brand name (Hint: Do it!). This debate has been put to rest, with Google weighing in that 89% of clicks on PPC ads are not replaced by your organic traffic. In the same vein, focusing ads in the 10 miles surrounding your dealership is a no brainer, and should be included in part of a larger digital advertising strategy.
Monitor your results.
Ensure your campaigns are receiving a healthy impression share in your targeted areas. If you are not satisfied with your impression share, dial back your targeting to hit the sweet spot (5-10 miles) and retest. If that still isn’t working, consider increasing your advertising budget to meet the right balance of both spatial and impression coverage.
Test out new areas.
Even though most cars are sold right in your backyard, there are still 30% of sales coming from the broader surrounding area. To capitalize on those new areas, consult your historic data for new pockets of likely buyers. Next, test out some areas where you think you could improve sales and move some of your budget to support ads in those areas. The key is to revisit your targeting in a few months and see if you managed to improve in that region or, if not, if it’s time to move on to greener pasture.
Join the conversation and comment below with your own special targeting tips or insights! If you’re a sales manager wanting to find out more about your dealerships online presence try our free digital audit. Adpearance can work with you to create a better solution to your paid and search marketing.