Social media are vital to dealer ad efforts

In simpler times, dealerships sent a broad advertising message through local media. Then they gauged success based on how many people visited the showroom carrying a copy of their local newspaper, said Darin Wade, general manager of Krause Auto Group with two stores in the Atlanta area.

If the Internet helped light a fire incinerating that method of advertising, then social media have been the gasoline. And for dealers, Facebook is the fuel of choice.

In his 27 years in the car business, Wade has seen a rapid shift. Just a couple of years ago, when he was a partner at a Ford store in Albuquerque, N.M., much of a dealership's social media marketing ability revolved around building up a following on its Facebook page. "You had to get consumers to 'like' your page to market to them," he said.

Since he joined Krause about a year and half ago, the game has changed. Now, page likes are unnecessary, thanks to tools Facebook has launched for specific advertising campaigns, Wade said.

"What we found is targeting, by using Facebook's dynamic advertising back-end tools, we can choose these custom audiences," he said. Wade can tailor advertising based on geographic area, gender, age group and income level. The dealership's advertisements find Facebook users regardless of whether they like its page. Then Wade can see the number of clicks.

It has become an integral tool for many dealerships, and one that costs only about $1,500-$2,000 per store a month. These relatively newer efforts work simply by following shoppers' eyeballs on Facebook. A Pew Research Center study last year found that 68 percent of American adults use Facebook, making it the second-most-used social media platform, behind YouTube.

YouTube advertising by dealerships is far less involved than the tailored Facebook campaigns, though the video platform is useful, said Michael Sundquist, director of marketing at Safford Automotive Group in Springfield, Va. He calls YouTube a "research portal."

"People go in there to find out why they'd buy something," Sundquist said.

Along those lines, Safford has begun focusing its YouTube presence more on general product reviews. A recent video on how to take down the new Jeep Wrangler's soft top "got a ton of hits," Sundquist said. Using YouTube boils down to promoting the dealership's name. "Seventy-five percent of the people [on YouTube] are nowhere near your stores," he said. But "that means 25 percent are."

After YouTube and Facebook, social media use drops for other platforms such as 35 percent for Instagram, Pew reported. But some smaller platforms perform far better with specific age groups. For instance, about 78 percent of 18- to 24-year-olds use Snapchat vs. 27 percent of all U.S. adults. For that younger age group, 71 percent use Instagram.

All of the dealers Automotive News talked to cited a minor presence on Twitter.

Safford also uses Facebook-owned Instagram, which can be intertwined with Facebook's advertising tools, for general awareness, Sundquist said.

"People on Instagram are not really shopping," Sundquist said. "They're hobbyists."

Facebook is different.

Like Wade, Sundquist uses it for targeted advertising campaigns, spending from $500 to $3,500 per store per month on Facebook advertising, depending on each location's size. The numbers fluctuate month to month.

Facebook is used by a majority of Americans across a wide range of demographic groups, the Pew research said, and it's where most dealers' social media efforts are focused.

Like other dealers, Caleb Cline, digital marketing coordinator for DeSoto Auto Mall in Arcadia, Fla., uses highly targeted campaigns on Facebook based on consumers' purchase behavior. He especially looks for shoppers who have shown interest in a certain vehicle or who have visited competitors' lots in the last three months. He can build a campaign around users' age range, ZIP code and vehicle interests.

"It's quite effective," Cline said, adding that the channel has been buttressed by the addition of a "contact us now" button that can link users to dealers.

As for DeSoto's advertising budget, Cline said it uses less than half of the $1,500-$2,000 cited by Wade. "And we have a tremendous conversion rate," Cline said.

But committing to a consistent strategy using Facebook has been a challenge, dealers said. As quickly as Facebook adds features in advertising, it seems to change them, Sundquist said.

"You used to be able to really dig down and choose very compact segments based on income, other demographics," Sundquist said. "There's a lot of that that has been taken out now due to some of these privacy issues that have been ongoing."

A Facebook spokeswoman said changes to how advertisers can use third-party data have been in the works since March. That's when the company began a six-month wind down, completed in October, of its "Partner Categories," in which Facebook allowed large third-party data providers such as Experian and Acxiom to supplement its data and data collected by the advertising campaigners with offline purchasing information.

Advertisers still have the option to use Facebook's data, and a dealership can add its customer information to sharpen its social sales efforts. And advertisers can also still separately use third-party data, but it needs to go through an approval process, Facebook's spokeswoman said.

The shift in strategy came on the heels of the Cambridge Analytica scandal, in which the British consulting firm acquired the data of some 50 million Facebook users without their consent and used it for political purposes.

Facebook continues to be scrutinized in the media, such as The New York Times, for the way it uses the data provided by its more than 2 billion active users.

Facebook's size, evolution and more recent knack for attracting regulatory attention and media scrutiny mean dealers can expect to continue to see changes in how they can use the platform's advertising tools.

"It's a bit of a moving target with what's going on with Facebook," Sundquist said.

But what he says is clear: The days of putting a "kaleidoscope of colors and cars" into a newspaper and hoping it finds some buyers is a thing of the past.