Glenn Pasch: Should Car Dealers Cut Or Reallocate Marketing Budgets?

By: Michael Cirillo   |   01 Dec 2022

Glenn Pasch is CEO of PCG Digital, an Inc 5000 agency that specializes in helping dealerships and businesses generate qualified shoppers. As a leader in digital marketing and leadership training, he’s been featured in CBT News, Dealer Marketing Magazine, Auto Success, and Automotive News. 

He is also the host of the “You’re in Charge – Conversations That Spark Change” podcast. Co-author of two books including Selling Cars in the Digital Age and The Power of Connected Marketing. As well, he is an adjunct professor at Northwood University and is also a relatable international speaker.

In this Episode Glenn answers the question to if  “dealers should really consider cutting their marketing budget?”

When you look over the last two years when things were going wonderfully, dealers were locked into the inaction of taking things for granted.They didn't wanna look at their marketing and dive in as deeply because while we're making money, it must be working. But Now that we're coming into a time period where rates are going up, inventory levels are starting to come back in some way.Used car prices are coming down, dealers now are starting to ask themselves the question “was my marketing really working? Or is it just because I had the inventory or did I not really look because things were So well?” it's more about reallocating based on what you're trying to accomplish, based on your manufacturer, and your inventory levels and what you're really trying to sell.

During economic downturns, corporations often curtail spending, particularly on marketing budgets. Right now, advertising agencies are struggling to stay afloat, and Google and Facebook are reporting substantially lower ad revenues as marketing spending dives with the business cycle (cyclical marketing). Yet, that is the modern-day analog of bleeding, a once-common treatment that now serves only to weaken patients' immune systems.

Companies that have bounced back most strongly from previous recessions usually did not cut their marketing spend, and in many cases actually increased it. But they did change what they were spending their marketing budget on and when to reflect the new context in which they operated. As Glenn says it’s more about reallocation more than cutting.

As an example, consider Reckitt Benckiser: The corporation started a campaign during the economic downturn that followed the 2008 stock market crisis to convince customers to keep buying its more expensive but higher-quality brands. Reckitt Benckiser increased their advertising spending by 25% as its competitors decreased theirs, resulting in 14% revenue growth and 8% profit growth, respectively, when most of its competitors reported 10% or greater profit declines. Rather than seeing advertising as a cost, they saw it as an investment.

During economic downturns, commercials need to address the difficulties people are having in their daily lives. Shoppers in a rough economy value brands that stand together for them. Successful brand advertising amid a recession not only injects comedy and passion, but also provides consumers with a response to the question, "How can we help?"

Typical marketing expenses might be quite substantial. This is the reason why many marketing budgets are so huge. However, there comes a point when it is appropriate to watch the budget or perhaps make some cuts. This means that a business must find ways to accomplish the same goals with fewer resources.

Those who continue to advertise during rougher or slower times will receive a larger share of the pie when the economy recovers... allowing their competitors (who drastically reduced their advertising efforts) to sweep up the advertising crumbs.

Adjust Your Marketing Strategy

Perhaps the most effective technique to continue to generate revenue is to reevaluate your marketing plan. Perhaps it's time to stop investing in pricey advertisements and reconsider your marketing strategy.If your marketing department is highly specialized, each division will want a larger share of the available funds. By having everyone on the marketing team work toward the same goals, resources may be allocated to have the most possible impact right now. For each campaign, you should only engage the marketing channels that will yield the best results.

It's time to switch to Flexdealer Inventory Marketing to increase your website's quality traffic while reducing your overall advertising costs. The Lift Kit  platform is user-friendly and a great way to market your inventory to shoppers who are likely to purchase it. It is time to resume the momentum in order to capitalize on the sales potential in your area.

Listen to the full episode for insights and context from Glenn Pasch!



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