After more than a decade working in the auto industry, we’ve seen time and time again that there are fewer consumers in-market for vehicles in January and February.
The incentives, sales, and overall focus that gets put on the end of Q4 may be responsible; the auto industry sees a 9-11% increase in sales around Black Friday and a 70-85% increase in sales around Christmas. Either way, January and February feel like a stark contrast to the high-energy, high-volume sales in November and December. The reality seems to be that there is less search interest in Q1.
In these first few months of the year, it’s important for car dealers to understand that overall lead volume will likely be lower. But by preparing for the lower numbers and focusing on key performance indicators (KPIs) that indicate campaign performance like click-through-rate (CTR) and conversion rate, dealerships can make sure their digital advertising efforts are still converting the search volume that is there.
January and February Marketing Tips for Car Dealers
CTR and conversion rate will tell you how many searches it takes to generate a click on average, as well as how many clicks it takes to generate a lead action on average. Regardless of how many searches happen in your market, paid search campaigns should still aim to maintain reasonable CTRs and conversion rates in Q1.
Here's what we mean—if your CTR was 10% and your conversion rate was 20% in December, these metrics should hold steady in January. There may be less demand and fewer searches after the new year, but your campaign performance should remain consistent.
By paying attention to these KPIs during typically "down" months, you can understand if a decrease in sales is seasonal or if you should be concerned about digital advertising performance. In addition to CTR and conversion rate, look at search impression share to make sure your digital advertising campaigns are showing up for all possible in-market searches with high-quality ads. It’s your digital advertising provider’s job to efficiently find all the in-market shoppers, regardless of how many there are, and these metrics should still reflect that.
If you’re tempted to pause efforts during January and February, you have two options. One is to hold steady as the buying journey for in-market car shoppers usually spans longer than 30 days. Your digital presence now is an investment in shoppers who will turn into buyers in the coming weeks or months. This can be hard to swallow when you’re going through a tough sales month, but sticking it out in January and February may compound into making March one of your best months. That being said, if you can’t afford to weather the storm, option two is to decrease your marketing budget to accommodate the seasonal decline and then reinvest those dollars when the market is heating up again. As tax returns hit and we head into spring, search volume and sales will pick up accordingly and you don’t want to lose out on opportunities to sell more cars in Q1.
Start the New Year Off Strong
Ready to make 2020 your best year yet? Contact us to learn more about our approach to digital marketing. We’re committed to transparent reporting and partnering hard to help car dealers meet and exceed their goals. Start with a free digital analysis to get custom recommendations for your market and learn how you can get more from your advertising spend this year.