The True Cost of Your Digital Presence
In a world with hundreds of website and advertising vendors, it's easier than ever for a dealership to have a tip-top digital presence at a low cost. Unfortunately, due to website inefficiencies and poorly designed media budgets, our clients are spending more money than they realize to ensure that they can be found online.
The Hard Costs of a Digital Presence
On average, our clients spend roughly $4,000 and $2,000 per month on Google and Facebook Ads, respectively. Our agency fee is a flat $1,200 for each service. This means that our average client is spending $100,800 per year on digital advertising alone.
RUNNING TOTAL - $100,800
Additionally, most dealerships pay anywhere from $800-$1,200 per month for their website. We've seen website prices as high as $6,000 per month. Tack-on a couple miscellaneous website tools (credit app, chat widget, trade tool, etc), and their total website cost can easily rise as high as $4,000 per month.
RUNNING TOTAL - $148,800
Most of our clients are also customers of Autotrader, Cargurus, and other vehicle aggregation sites. Our clients typically use 2 of these services and pay an average of $3,000 a month per listing site. This is where the cost truly starts to balloon.
RUNNING TOTAL - $220,800
The Soft Costs of a Digital Presence
Dealerships are constantly switching vendors, adding new vendors, and purchasing new products from those vendors. This is to be expected, of course, because dealerships must do whatever it takes to get a slight edge over their plentiful competitors. Unfortunately, there is a side effect to having so many vendors in the digital advertising industry. Since most dealership decision-makers and bookkeepers are not incredibly knowledgeable about digital advertising, it's easy for vendors to slip hidden charges and fees into invoices without raising any eyebrows at the dealership. Because dealerships use so many vendors, they’re able to over-bill dealerships for services that have not been, and will not be, completed (such as SEO or reputation management). Since dealers write so many checks per month, this slips through the cracks. Some of our clients write upwards of 2,000 checks/month to pay their vendors, after all.
If your agency is doing any of the following, it's time to have a conversation with them.
They're billing your ad spend and agency fee as one line item on the invoice
If your agency isn't using your company credit card to bill your media spend, they're likely billing you for your ad spend in advance and using their own credit card to pay Google or Facebook directly. While there is nothing wrong with this, it's important that they delineate the exact amount which will be used for paying advertisers and the exact amount which will be used for paying themselves. If they're not separating these items, it's likely that you're spending less on advertising than you thought -- and the rest is going into their pocket.
They're billing you for "Premium SEO"
This is a common agency trick. Most SEO packages involve the same amount of work, regardless of whether or not you're paying for the "Base Plan," or "Diamond Level,", or "Magic Amazing Package SEO Bundle," or whatever they're calling it these days. Inspect what you expect, and call your SEO provider to get a detailed run-down of what they're actually doing for your money.
The soft costs get even worse when you consider the cost of your BDC. You can use our BDC Cost/Lead Calculator to calculate how much you're paying to work each lead with your BDC. With that being said, if you have two BDC agents, you're likely paying upwards of $42,000/yr for each one, not counting other costs like benefits, PTO (ha! in a dealership?), health insurance, and more. You can use this calculator to determine what your BDC agents actually cost. For example, a person making $42,000/yr at Silva & Habeck actually costs us $57,000 per year (great benefits).
If you want to reduce the cost of your BDC, outsourcing it to Silva & Habeck can cut your costs from over $100,000 to just under $60,000 per year. Possibly even less, depending on your lead volume. Schedule a demo with our BDC experts here.
RUNNING TOTAL - $320,800
Yes, back to your website. It's more costly than you think. Here's why: Over 80% of internet browsing is done on a mobile device.
According to Google, 53% of mobile visitors bounce if a website takes longer than three seconds to load. Our clients' websites, on average, take 11 seconds to become interactive on a mobile device. Because of how poorly-performing most dealership sites are, we have found that the paid-traffic bounce rate (the percentage of people who click on a your ad but leave the website without clicking anything) is close to 60%.
So if you're spending $72,000/yr directly on digital advertising, you're actually wasting about $43,000 of that on traffic that bounced. With this in mind, your website is actually costing you about $91,000/yr.
Looking to switch it up with a cutting edge website? Check out our website platform, Wackk.