• George Nenni

What Does Good Look Like?


One of my former managers and mentors would often ask, “George, what does good look like?”. This is an important question to ask in business since too often, managers will rely solely on gut-feel and instincts. It is not that intuition and feel are unimportant, but they need to be paired with solid success metrics that matter to the business. Once you’ve created these success metrics, it then becomes important to establish meaningful benchmarks to check these metrics against.


For car dealers who want to determine “what good looks like” in their digital marketing spending, we’ve worked to establish both success metrics and benchmarks. As much as we can, we work to turn digital marketing inspection into a math exercise. We work backwards, starting with what we are willing to pay in marketing and advertising to sell a vehicle. We begin with the following questions:


  1. How much is the dealer willing to spend in advertising and marketing to sell a vehicle? NADA’s 2018 report says dealers spend $562,575 per year in marketing and advertising to sell 1,208 new vehicles and 720 used vehicles, 1,928 vehicles in total. That’s $292 per vehicle sold on average, but each dealer may have their own tolerance above or below this average.

  2. What is the store’s overall lead closing ratio (internet, phone, showroom)? For easy math, let’s say that at 10%, the average dealer would then be willing to pay $29.20 per lead.

  3. How many vehicle detail pages (VDPs) does it typically take to convert to a lead? We’ve found this number to be around 10-15 VDPs to equal a lead. Of course, this number could also vary if the dealer was doing a large amount of campaigns that drove traffic directly to VDPs. If it took 10 VDPs to equal a lead, then the dealer should be willing to spend around $2.92 per VDP.

  4. How many paid Google Search clicks does it take to deliver a VDP, or a lead (the math is up to you)? Either way, we can safely say that paying $15-20 per paid search click would be way out of tolerance.

You get the idea. By continually going through this exercise, the dealer can begin to dial in their own version of “what does good look like”. While the results and final benchmarks may vary, the most important thing is that the dealer begins to distill their marketing investments down to some quick math.


Below is a clip of our new infographic titled, “Automotive Digital Marketing Benchmarks”. We’ve determined for Facebook, third-party classifieds, and paid search, what we feel is a reasonable tolerance for cost per lead.

Sample of Automotive Digital Marketing Benchmark infographic

These benchmarks are not set in stone, of course, but they are useful for seeing where the dealership may excel on its Facebook, third-party classifieds, and paid search spending, and which areas it may need to improve upon. Every dealership will have a slightly different version of “what good looks like,” but no matter what the size, stock, or location of the dealership, everyone wants to spend less on high-quality traffic and leads, and get more of both.


For dealers who would like to review the entire infographic on automotive digital benchmarks, click here to download.

If you are an automotive retailer, we can help gain more transparency with your digital marketing investments, and improve your return on digital ad spend.


You can also follow us on these social networks:

Linkedin: linkedin.com/in/georgenenni

Facebook: facebook.com/generationsdigital/

Twitter: twitter.com/generationsdig

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george@generationsdigital.com
(513) 673-1268
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