Performance marketing through Facebook ads for automotive businesses - get the insights from SocialTap.
Let's talk about Facebook advertising: SocialTap discusses how it started, their clientele, and their achievements as an agency through Facebook.
The transcription starts here:
- Perfect, well, welcome everyone. My name is Georgia, I'm a Client Solutions Manager working in the automotive team in the UK here at Meta, formally known as Facebook. And I'm really happy to introduce you all to John, he's the founder and Managing Director at SocialTap, which is an agency that specializes in Facebook marketing for dealer groups. And I'm really excited to have a discussion today just to hear all about John's business, how he works with Facebook and his clients. And just to serve as a bit of inspiration for everyone in this group, and hear some lovely success stories. So welcome John, it's great to have you.
- Yeah, thanks Georgia, good to be here.
- So I'd love to start just to get to know a bit more about your agency, how you founded it, what you do. And just to share some of the success you've had.
- Yeah, sure. A bit about my background really, I've worked in digital marketing for probably about 15, 16 years now. And worked through the different cycles, if you like, of... Initially small businesses getting websites, then SEO, and then paid search and so on. And towards the latter end of my career at a previous agency that I worked at, I started to look a lot more into paid social, and specifically Facebook ads. And the thing that I was really excited about at that time for me was obviously the level of targeting that we had available. And secondly, it was... The traceability of performance, that ability to be able to understand how every pound was spent. Which the clients that we used to service were small businesses, and they were often in a... When you asked them how their marketing was performing often they didn't know. And it was often the case that they were scared of maybe turning off a particular marketing channel in case it worked, rather than knowing which... I felt that with Facebook ads there was a particular opportunity that if you were able to prove to a business that, look, this is working. Then your services as an agency become a bit of a no-brainer. And secondly, these businesses would continue to invest more money in that particular channel to scale the returns that they get from it. In terms of how we got into automotive that was, I guess, a bit of fortune. One of our early clients was a business in the automotive space. They'd been through those sorts of challenges of working with other agents in the past, never really understanding the performance of the marketing channel that they were working with. And was it actually delivering sales? Our business came in. Even though it's a lead-gen-based business, we tried as best as we could to turn it more into an e-commerce type process. In the sense that we wanted to track the result of those leads that we generated all the way through to conversion. So that we could prove here you've spent this much, and this is how much it's returned in sales. Because, one, we were able to do that in the first instance, and then secondly, the results were good, we saw that they got very excited. And off the back of that we then worked with another client in that industry, and another, and another, and then eventually got to the point where we decided we should specialize in the automotive industry. And go all out, really understand it, understand the sales processes and what have you. And yeah, that got us where we are today.
- Amazing, it's really great to hear. And can you tell me a bit more about your clients? So who are they and what are they looking for from you specifically?
- Yeah. We've positioned our business as, I guess, a performance agency, so we're not a... Again, I think social media agencies, there's so often been a bit of a stigma attached. There might be a tendency to... Over amplify what we would class as maybe more balancing metrics. Engagements and reach, impressions and what have you. Whereas for us our business has always been about, well, how many sales have been done from the activity? Our clients are currently, they're typically independent car dealers. And that can range from at the smaller end of the scale, a car dealership that sells 20 to 30 cars a month. Up to some of the largest independent car dealers the likes of Peter Vardy, Hilton Garage who are big, sometimes multi-site operations. The other part of the business is we work with a lot of finance brokers as well. And on both sides typically what we're doing is we're driving leads, and often finance-based leads into their businesses and into their sales teams. Understanding things like finance approval rate, and are we matching lender's criteria, and then ultimately are those leads convert into sales.
- Amazing, that was great. And I'm sure you have a bit of an oversight of where your clients are spending their marketing budget. So generally with that knowledge how well do you feel Facebook compares in terms of efficiency? Because I know that you've been able to track that Facebook can directly sell cars, which is amazing to hear. But it'd be great to know a bit more about how you experienced that. And especially when you see what clients are spending in other channels for example.
- Yeah, I think again there's a bit of a divide between those two different types of client as well. Those independent car dealers there's some very obvious traditional channels that they've often used for years, and years, and years. They can often be in that... They're scared of turning that activity off, because what if it does work? Rather than knowing it does. So often, we'll call them the traditional marketing channels that independent car dealers are using. Some have maybe experimented a bit with paid search, some have maybe even tried Facebook ads in the past. But it might often have been a marketing agency that have just bolted it on as another service, without necessarily specializing it. Or, they might have given the task to a junior, or the current marketing team. But without necessarily having that distinctive knowledge of the channel. And because it hasn't worked the first time, they might have been just disregarded it. And then on the finance broker side, it's again often paid search. Or the number of businesses where they might buy leads from them, like a lead generation type service. So they're probably the current channels.
- Amazing. And tell a bit more about some of the success stories that you've had, or the performance that you've seen through Facebook. I'm really keen to hear about how you sell cars using Facebook, and the cost per sale as well that you see.
- Yeah, sure. I guess there's a couple, well, there's a number of different examples that I could use. But I guess one of the... The best examples of how you can use Facebook ads to be... Creative, or to problem solve would have taken place at the start of lockdown last year. So at the end of March when the lockdown announcements took place. These businesses that we work with had lots of decisions to make around, what do we do? Do we pull the shutters down for a number of months? And then obviously as things started to open up a little bit. It's a tricky industry to work in in a way, because there's so many different components in the middle between generating a lead and that sale. The first thing that we've got to do is make sure that individual is credit worthy. And then we're getting them into a sales team, and they've got to do their thing as well. But at that time the first obstacle, if you like, was making sure that we were matching with lending criteria. Because understandably in April, May, June time of last year, the different lenders were very... Cautious, I'd say, of who they should lend money to. There was millions of people put on furlough, nobody really knew what was going to happen with the economy. Were they're going to be mass redundancies and what have you? To give somebody a loan for a car for them to then lose their job, I guess for a lender is a bit of a nightmare. We very quickly needed to understand did these lenders, which are again, a really important component in the process of selling cars, what was their appetite and who were they still wanting to lend to? And without really getting much direction from them, we just sort of tried to reverse engineer things a little bit. And understand what type of people had the most reliable jobs, regardless of what was happening in the world at that time. And actually people that worked in key worker industries their jobs were extremely safe. And they needed cars to go about doing the jobs, and actually make sure that the country could still operate. The delivery drivers could still go and do their jobs, and nurses could get to work, and so on. so for a number of our clients we pivoted very quickly, and specifically targeted certain job types, and so on. And created ads that were aimed at them, reference their jobs, and use the current events in the ads themselves to let people know that, "Look, you can still get a car, we're here to help you." Because it wasn't necessarily just a case of I want to change my car because I fancy a new car. There's a lot of people out there where their cars might have broken down, and so on. And it was a necessity rather than just an upgrade if you like. So I think that was a particular success, sorry. We had one client in particular at that point, probably August, September time. Their comments to us were that they were recruiting staff, rather than they were furloughing. Because their business actually grew during that period. And then secondly, with an independent dealer that we work with... Up in the Northeast. Had typically spent their marketing budget on the traditional channels, and... Tried some paid search, but just wanted to take back a bit of control. He didn't feel like he was really in that much control of how many leads or inquiries would come into his business. He felt like he had to spend the same amount of money every month. And was frankly a little bit worried to turn things off or down in the other channels that he worked in. But he didn't actually know what was working and what wasn't. What we did with him very quickly was we started to use automotive inventory ads, we used a number of different placements. We were able to group his stock... Into different... Segments, if you like, that would suit certain demographics. We'd group SUV's together, we'd group hatchbacks together, and so on and so forth. And then use those different inventory segments to target particular audiences around his local area. Now he's a small dealership, they do a great job of... Managing every inquiry really, really well. And the results that he's had have been brilliant, the most important thing is that they've been consistent. For the last seven or eight months, we know that within about a ten, 15 pound tolerance either way of how much it's costing per car to sell. He's consistently sold, probably for the last six to eight months, between 25 and 30 vehicles. And it's cost a hundred pound per vehicle, give or take 15 pounds. So that now he can walk in, in most cases at the start of the month, and his lead generation headache has sort of gone away. Because he's got that consistency now, and his other headaches now are just making sure that he's got the right stock, and so on and so forth. So that you can service the inquiries that we deliver to him.
- That's an incredible cost per sale, wow. And yeah, a great story, thank you for sharing. I wanted to touch on that point that you mentioned around your super targeted approach. Because it's quite interesting how we as Facebook now, almost moving away from that, moving into the power of machine learning and the algorithm. And almost letting our platform do the work in terms of finding the right people. So we're actually seen with a lot of other clients, especially dealer groups that this is also a great strategy to employ. So that's also just something to think about, but I also want us to pick up on your point around automotive inventory ads. Because we have seen huge success with that on the platform. And I think it's a really great resource that many retailers aren't aware of. Could you explain a bit more about how you use those, and how easy, or how you feel the setup process is that anyone here who would like to know can understand.
- Yeah, there's some great website providers in the industry that... For quite a while now have had a really easy setup process... To create a catalog in Facebook, which we then use for the inventory ads. The reasons why we like using them, one, from a starting point, they tend to get a much higher click through rate than lots of other ad formats, significantly. So there's already one, one case for using them. The second thing is we believe it helps to get a much better quality of lead, than maybe something that's more generic. For certain clients our objective is to get a finance application, which then can go into their sales team. And their sales team can pick up the phone, and contact the lead, and then speak to them about what car they want. But if that individual has already seen a car on a website, first off from a Facebook ad, and are inquiring about that car in particular. Excuse me. It's something that's more tangible, they're almost touching and feeling the car already. And then the knock on effect is that the quality of lead would be much better. And then throwing in the mix things that we can do in terms of like dynamic re-targeting, and so on and so forth. Means that... I don't want to just make it sound like it makes our job easier, because there's still a lot of stuff that we need to do. But in essence, you're creating thousands of different adverts very, very quickly, based on stock that is available on the client's website currently. And that's obviously another benefit as well, is that the stock that you use for those ads is always up to date. Because we're using, again, depending on the setup, but we're typically using a... A live feed, or a feed that's regularly updated as well.
- Yeah, that's great. Thank you so much for sharing your perspective on that. I had a question which may not be relevant, so feel free to say you don't know because you're a performance agency. But we've recently done a lot of deep diving into, I know you mentioned about quality of leads, and I'm sure cost per lead is something that you look at quite deeply. We've seen that actually when a brand, or in this case a retailer, runs brand activity alongside their DR, or lead generation activity, they actually see a better cost per lead. So I'm just wondering if that's something that you've seen, and we'll say maybe if you know, or have experience of this, how important brand is as well as DR, and lead generation for retailers.
- Yeah, I think it's getting more and more important, partly maybe because... There's more and more advertisers using Facebook as a channel now. And there's some big players that are entering the market too. And I've always said that in an ideal world... I'd imagine that the best quality leads are ones where it's maybe the third, or fourth, or fifth interaction, rather than the first. And that's not to say that there's not a place for the really direct response campaign, but... If a business is, it's that typical sales, marketing funnel, isn't it? The low hanging fruit is always going to be people that have already heard of your business before. And there's, again, there's this... There's this tricky thing in the automotive industry of it's not selling a t-shirt. It's not an impulse purchase, for a lot of people are either in market, or out of market. And I think that from bringing brand campaigns can essentially, I guess, keep people warm, or warm them up for the point when they are in market. And then if you're doing a good job, and you're then presenting them with an ad at that stage, it's not the first time they've come into contact with your brand. They're already aware of you, and they're probably more likely to engage with your ad at that point. Yeah, I'd absolutely agree with that.
- Thank you. And just to touch on your point about constantly keeping in contact, and having different touch points. We did some research a few years ago talking about kind of the friction in the car buying or purchasing journey. And many people surveyed said that they'd like to hear more from a car brand, or in this case, a retailer after they've actually purchased the car. I guess in this instance it would be utilizing CRM data to keep in touch, or, when you know that someone is due a service, coming up to buying a car again targeting them on Facebook. Do you feel that retailers are doing enough with their CRM data on our platforms? Or do you feel that there's an opportunity to be doing more?
- Yeah, I think there's a huge opportunity. Even just in that first instance of re-engaging with people that haven't converted straight away. I think there's a bit of a nature in the industry that leads are disposable. And because we work with multiple different clients, we can often see the same individual who is inquiring with a business then potentially pop up at another place and another place. It might even be the third business that the ends up converting that inquiry. And it's often because the first business hasn't done a good enough job of keeping hold of that person. There's some obvious things that you can do with email and SMS to nurture inquiries. But again, we've also looked at, we've almost treated this. When someone's inquired, to go back to the e-commerce methodology, when that person's inquired they've effectively added something to the basket, if you like. And in the e-commerce world when somebody's added a product to their basket, that's the point when you really double down on the marketing. That's the people that are at the bottom of the funnel, and they're close to buying, and you work harder. Whereas I think in this industry, sometimes they see that that's the job done. And yeah, I get it, their sales team are maybe picking up the phone and ringing them. But if they can't get ahold of that person or what have you, it's then often going into the bin, and there's always more leads coming in. And the clients that we get the best results for have really strong sales processes. But yeah, also understanding there's that anecdotal... Data around people changing their car every two or three years. Well, there's a great custom audience to start using, looking back at people that converted two or three years ago and getting them at the right time of which they're looking to change their car. If it's a dealership that sells of a product, and so on. Even maybe things like reviews, and things like that, or feedback. I think that there's huge opportunities for the business to leverage the data that they're collecting. Both from a pipeline point of view, and converted sales as well.
- Yeah, absolutely, I'm so glad you agree, and something we're starting to tell our clients as well is really bring that CRM experience onto Facebook. Because it's often much more efficient as well, and we have those capabilities. So I'm so glad you agree on that. I wanted to pick up on your point around the e-commerce, because obviously we've seen a real shift in strategies for selling cars. It was coming anyway, but obviously the pandemic really accelerated that move into e-commerce. Do you really see this as the future? And I'm hoping that you see Facebook solutions as a way that retailers can start to bring e-commerce to their business.
- Yeah. And again, with some of the, I guess, challenger brands that have come into the market as well that are driving this purely online business model. I think that... Our perception of owning a car, or our behavior towards it, has changed. Again, talking to someone earlier today, for a lot of people it's not their pride and joy anymore. Don't get me wrong, there's lots of people that have very nice cars, and look after them really well, and what have you. But for lots of people it is a means of transport, and it almost is subscription nowadays. And I think people are getting more aware of the consumer rights as well. We'll buy pretty much anything off the internet, we used to go into travel agents to book holidays, and that very rarely happens now. And I think the automotive market is the next logical market to go through that transformation, if you like. And I guess I'd always say that businesses should be marketing wherever people's attention is. And I think that there's a number of things Facebook, Instagram, everybody will know the usage numbers on those. But I think one of the biggest opportunities with Facebook especially for smaller businesses, compared to some of the channels, like for example, paid search. I genuinely believe that the playing field is a lot leveler on Facebook. It's not about who will pay the most will win, as we can see from that small dealership that we work with up in the Northeast, who are getting great results. They've not got the same budgets to compete with the big major brands. But, I'd argue that it's the creativity, and the strategy behind what you're doing. I might be doing ourselves out of a job here, but that doesn't need to necessarily come from an agency either. We've spoken with a bunch of people in the industry that have built their businesses managing campaigns themselves. You don't need to hire a designer, you don't need to do all these things. I'm not afraid to say that when we first started out, when I was creating images myself for our early clients, we'd use the... The tool within the Facebook ads app to edit images for clients and stuff like that. And even now a bunch of stuff that we do is on things like Canva, which is... So simple for people to use. A starting point for small businesses might be that they can go and do this themselves. Which I think is, again, it means that there's a lower barrier to entry for these businesses. And will mean that it ends up becoming a really important part of a marketing strategy.
- Amazing. And yeah, I just wanted to pick up on what you said about subscriptions, and the way people are changing their views of their car. Just looking at the work with Volvo, and , or Pivotal and JLR. Now you can change your car every six months, probably faster than you change an iPhone. And people are wanting the newest and shiniest car now, they don't want to wait another three to five years. I definitely also see that shift. And I think it's really interesting the change in buying behavior. And also I'm really excited to see how the shift to e-commerce opens up the market to more women. Who may traditionally feel a bit intimidated by going into the dealership. But now would be very comfortable going onto their website to purchase a car, or going through Facebook, to then discover more about a vehicle. So I definitely feel like this is an exciting direction that we're moving into.
- Yeah, at the end of the day, it's all down convenience, isn't it? We have a number of clients where their sales model is that they'll go and search for a car for that person. Meaning that they're not having to go down to car dealerships on a Saturday afternoon, and what have you. And there'll still be people that want to go and do that, and that's fine. And again, you can still use use Facebook really well to drive up fall into your business as well. But I think that the sooner... Businesses in this industry embrace... Potentially a new way of doing things... The better really.
- Yeah, I totally agree. I just wanted to finish up by asking you really, what do you think is the most common misconception about using Facebook platforms to sell cars in your experience.
- I think one of the questions that we always get asked when we're working with a new client that maybe hasn't... Tried Facebook as a marketing channel before. Or it didn't really work out was maybe with regards to the intent of the leads or inquiries that are generated. There's maybe a bit of a misconception that it encourages time-wasters and so on. And everybody's seen the marketplace memes, and so on. But... We've found in the past that... In certain instances, we're able to generate inquiries for our clients with as much intent as something that's come from paid search. Where somebody's gone on to a search engine and typed a particular phrase in. And the benefits have been, like I said before, that the playing field is much leveler on Facebook than it might be on paid search. Paid search is very much whoever's willing to pay the most, will probably end up winning. And on Facebook there's an opportunity to compete with the larger brands for business. So I think that would be one, again, I think the other thing that I said before, which was around that maybe people are a little bit scared that they have to go and use an agency... To start advertising on Facebook. I think that a lot of people are quite comfortable with boosting posts, and so on. And I think that with a little bit of training or watching a few videos on YouTube, then they could start to understand the full range of capabilities. And with, literally... Half an hour or an hour's worth of education go and create some campaigns that are going to deliver probably far more value for that business, from a direct response point of view. I guess that they'd be the two things that people worrying about the quality or intent of leads that that might be generated. You could often just maybe need a different, if we're comparing it to a traditional marketing channel or maybe people walking in off the street on a Saturday afternoon, and speaking to one of their sales guys. It might need a different sales process, you might need to filter the leads more. Or, again, often what we'll do is we'll drive them into a... It depends on the certain type of individual we're looking for. But we'll drive them into quite a long form inquiry, which really qualifies that individual. And like I say, the intent can be as high as any other marketing channel.
- Amazing. Well John, it's been so good to get your valuable insights today, I've really enjoyed this conversation. And it's just great to hear from someone who's really passionate about Facebook, and can see the results. And I just want to thank you so much for your time, and I hope that everyone watching finds this useful. So thank you so much.
- No problem, thanks very much.