The LDM paid search team partners with car dealerships across the country operating in a wide range of market sizes, all with their own unique geography and competitive landscape. As a result, our dealers come to us with a variety of outlooks on how to allocate their digital advertising budget across geotargets.

While each account is custom built, and its performance individually tested and monitored, the quantity of our accounts gave us the unique opportunity to aggregate data to confirm or deny industry best practices regarding budget allocation by geotarget. In other words, we set out to confirm where the “sweet spot” that all dealers should first prioritize drops off, so that we can establish a baseline for where most dealers should spend to maximize leads coming from their paid search ads.

 

The Test

giphy-14To find our answer, we examined search conversion data from 23 strategically selected dealerships — of varying markets, budget sizes, and account strategies — to find the average distance of those conversions from each store location. The data was collected over the same 30-day period, and then plotted by 5 mile radius increments.

 

The Results

The highest percentage of total conversions most often occur within 5 to 10 miles of the dealership. On average, 78% of all a dealership’s conversions happen within 15 miles maximum.

On a per square mile basis, the highest conversion density is within 5 miles of the dealership.

 

 

The Conclusions (What it means for you!)

While the results may not be surprising, the implications for your market share are important.

If you’re spreading your budget across a large geographical area, you could be spending dollars in areas where people aren’t likely to make the trip. This spreads your budget thin across both high-converting and low-converting areas—so it’s time to scratch the latter.

Start in your backyard for the highest impact with your budget. Maximize search impression share in your immediate surroundings, and expand from there once you saturate your market.

 

Adapt to Get Your Money’s Worth

To ensure that you are getting the most for your paid search dollars, add bid adjustments on your highest converting areas to make sure your ads show up in top positions in those areas.

Fuel℠, our proprietary dynamic paid search platform, allows you to import your CRM sales data to plot sales geographically, which helps you make strategic decisions about where to bid higher, lower, and to avoid altogether.

If you’d like to learn more about our study, dynamic ad platform Fuel℠, or paid search team, shoot me an email at cgarvey@launchdigitalmarketing.com. Thanks for geeking out with me ?!

Meet Cara Garvey

Cara Garvey is the Paid Search Director at LDM. She graduated from Roosevelt University in Chicago with a degree in Integrated Marketing Communications, minors in Spanish and Psychology, and a penchant for Netflix. Cara enjoys spending time with her family and friends, playing with her dogs, and analyzing conversion data (don't judge).

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