"There are all sorts of ways that Facebook receives data on its platform and obtains intelligence about you," Petersen said. "Creepy or cool — sometimes it's hard to tell which one it is. But from an advertising aspect, it's an amazing opportunity."
Another benefit: Dealers United can track how many sales the Facebook ads generate, which enables dealerships to determine the ads' effectiveness, he said.
In addition, the program enables Shelor to send targeted ads to consumers with specific professions or interests. "People put their professions on Facebook all the time," Neel said. "We can target first responders, police and firemen if we want to — even offer discounts to members of the American Quarter Horse Association. You can do lots of things with Facebook to target customers."
Petersen said engaging in "personal conversations" with virtual communities is trending in car marketing. Maybe a dealership likes to contribute money to the Boys & Girls Clubs of America, for example. If so, it can use Facebook to target consumers who also support that organization.
Or perhaps a dealership wants to be known for serving local teachers or military veterans, so it targets them with special Facebook ads.
"You can have proactive, very targeted conversations with people who, according to profiles, are people you'd like to do business with," Petersen said. "Dealerships have to go back to building local communities. Dealerships that are doing that are winning."
Shelor has used the Dealers United/Facebook program for about 19 months. The dealership group, owned by David and Larry Shelor, pays Dealers United a management fee of $750 a month, which mainly pays for creating and administering the Facebook ads and monitoring their effectiveness. Shelor also pays Facebook about $5,000 a month for ads on a pay-per-click basis, Neel said.
Though Neel said he cannot prove that the program has spurred an increase in vehicle sales, the reduced ad spend alone makes it valuable. Petersen concurs, noting it's not always about sales figures.
"You may sell about the same number of vehicles, but you'll be doing it at a fraction of the [advertising] cost," he said. "Plus your dealership gets branded on every ad … your name is on the ad, not Autotrader, for instance. I'm not knocking Autotrader, but some dealers spend 70 to 80 percent of their ad spend on third parties that brand themselves, not the dealerships.
"This is the time for dealerships to double down on a first-party lead strategy," Petersen said. "They really need to take advantage of the ability to reach local consumers and have great personal conversations — and ultimately deliver a better consumer experience."