How much should a dealership spend on digital marketing?

Why benchmarks mislead

Per-unit and percentage-of-gross benchmarks blend stores with different brands, markets, inventory levels and co-op positions. Applying an average to a specific store produces a number with no relationship to its situation.

Start from measurable return

For each channel, establish what it produced, at what cost, and how confident the attribution is. Channels you cannot measure are not necessarily wasteful, but they should be a deliberate bet rather than an assumption.

Separate spend from fees

Media spend and agency or platform fees should be visible separately. Bundled invoices make it impossible to tell whether you are buying media or management.

Include co-op in the model

Co-op changes the effective cost of some channels and comes with constraints. Model net spend after co-op, and note what compliance requires.

A budgeting sequence that avoids benchmarks

Begin with last year's actual spend by channel and what each returned in leads, appointments and sales, using the CRM and DMS rather than platform reports. Decide which channels earn a hold, an increase or a cut, and set a test budget for one new idea.

Add fees and any co-op to the model. Review monthly and move money when results justify it, keeping notes on why.

Timing and seasonality

Vehicle demand, inventory and manufacturer incentives change through the year, so spending evenly is rarely the best plan. Look at your own monthly sales and lead history and plan heavier support around the periods that matter most to your store. Keep some reserve for unplanned opportunities, such as a large inventory purchase, and for corrective action if a channel underperforms.

Common mistakes in setting marketing budgets

Using a percentage of gross that ignores market conditions, letting a vendor propose the budget for its own services, cutting brand or search coverage abruptly without checking effects and not tracking agency fees separately are typical. Another is treating the budget as fixed in a year of changing conditions. Set decision points and review them with data.

Questions to ask before approving the budget

What did each channel return last year and how confident are we in the numbers? What are the fees and who receives them?

What commitments continue into next year? What is available in co-op and what does it require?

Which test are we running? Written answers turn the approval into an informed decision.