In today’s consolidating auto industry automotive advertising agencies must maximize the R.O.I. in a quantifiable manner for any investment they make of their time or with their client’s money. Social media, including directed investments in and with Facebook, presents some unique challenges to monetize the services provided by an automotive advertising agency. I recently replied to a question posted on FOCUS, a social networking portal I support composed of professionals sharing best practices, titled — Do Facebook Stores Really Do Anything – How Do You Monetize Facebook?
That question revealed a new area of responsibility for automotive advertising agencies. Agency retainers are no longer supported by production fees associated with conventional radio, TV or print advertisements. Media savings and commissions for placing broadcast media have also taken a back seat to consulting on Internet based investments and enhanced selling processes leveraging the viral nature of social media. In part, providing production and associated Creative and Marketing Services have been supplemented by Consultation Services focused on key vendor selection, directing social media activities and integrating selling processes on websites with those at the dealerships. Easier said than done when attempted through the glass wall of the Internet.
Automotive advertising agencies are constantly challenged to provide a verifiable R.O.I. for their services in a consolidating auto industry. Most agencies take credit for everything from website and floor traffic to conversion rates and increased sales to support their fees. Unfortunately downsized dealers with reduced staff and budgets now rely on detailed R.O.I. analytic tools built into every process and application to track their individual investments; or at least they should!
In response to these new dealer expectations, most vendors integrate a Dealer Portal into their solution that quantifies and qualifies the results of their application independent of the advertising agency’s possibly self serving analysis. Automotive advertising agencies have found that, as with any recommended vendor or advertising investment, their agency retainers and commissions must also be supported by quantifiable results. In a performance based business model with line item accountability the R.O.I. from Facebook and other social media investments in time and money can prove to be hard to quantify.
My actual answer to the post on Focus concerning how to monetize Facebook was, “The key to answering this question is to manage the expectations of the advertiser. If their goal is to make as many friends as possible with the confidence that people like to do business with people that they like — then the answer is an unqualified yes!”
“Social networking sites have unique personalities and rules that govern the conversations that they manage for their online community of friends designed to filter out direct sales messages. The market on Facebook is a conversation that exists before, during and after the shopping / buying decision. Any sales and/or marketing message is best delivered from the inside out as a C2C message between like minded consumers sharing their experiences vs. from the outside in as B2C message delivered by a self serving retailer.”
“As a result, direct sales messaging in Facebook stores will only go as far as the reputation that the retailer has earned by his/her other contributions to the community and of course their track record with previous customers and their willingness to share their experiences online.”
“The R.O.I. from Facebook is realized by collecting a data base of Facebook friends that allow retailers to group their friends by categories. The ability to then deliver relevant messages in a scalable and efficient manner to a qualified and targeted group of potential customers as one friend to another is the way to monetize Facebook.”
“In addition, the R.O.I. should not be limited to considering only short term sales since it is often reflected by increased traffic to the retailers website and/or an enhanced reputation that is only evident over time and reflected in the referrals and customer satisfaction / retention that it develops.”
“Finally, the search engines have weighted references in social media in their algorithms to determine their rankings and page positioning for retailers. As a result, conversations about the retailer on Facebook can be reflected in improved S.E.O. that might not be otherwise achieved. Also, the value of W.O.M.O. — Word Of Mouth Optimization — is less tangible and verifiable, however it has similar value which must be factored into any R.O.I. analytics.”
I have since added specific areas of responsibility concerning the need for the affiliated automotive advertising agencies of Ad Agency Online to help build, manage and monitor the Facebook stores that we are recommending for our auto dealer / vendor clients. As with any website, price and product matter … unfortunately, in that order. It is not enough to simply set up the site and sit back to monitor and manage the results. The more productive Facebook stores are built with the same focus on their online retail displays as they apply to their brick and mortar facilities.