Social Media Strategy

Targeting with First-Party Data

There are several great ways to target your past customers and prospects with your first party data, but why should you go to the effort? You’ll need to ask yourself how much you spent on leads over the years. Did you ever calculate the true total cost to acquire a new customer? What about the total lifetime value of a customer that includes purchase, re-purchase, service, and F&I?

The point I’m making is that your customer and prospect database by far is your most valuable asset. You’ve invested a lot of money building your database, and there’s a lot of money to be made within your database. Dealers are accustomed to targeting these past customers and prospects through channels like email and direct mail with varying levels of sophistication, but many don’t realize the importance of database targeting in Facebook.

Not everyone opens every email from their dealership, so your message may get lost. In some cases, direct mail can be expensive, especially when you are mass marketing with a “spray and pray” approach hoping enough people in your database respond to your direct mail piece to make it worthwhile. Facebook direct targeting is another tool in your toolbelt that is easy, trackable, and gets in front of consumers where they spend a lot of their time.

There are two main methods to use your first party data for targeting:

• Direct Targeting
• Lookalike Targeting

Let’s start with Direct Targeting. This method allows you to upload a list of consumers from your DMS or CRM and assign them to see a specific ad that you’ve created in Facebook.

The possibilities are endless if you have the ability to properly segment your lists before loading to Facebook. Just keep in mind that you can’t get too granular because you generally want at least 1,000 people in your list in order for it to run properly.

It’s important to note that Facebook won’t be able to find each person on their platform, so it’s probably best to start with a list of 1,500 consumers because you may only match to a portion of those after you’ve uploaded to Facebook for targeting.

Also, you’ll notice that your cost per click (CPC) for direct targeting will be a little higher than other forms of targeting, especially smaller segments. Because of the lower volume, it will likely increase the frequency it is shown to each consumer, which can result in a higher CPC. However, this is often worth the higher CPC to advertise to your customer base to help ensure you keep their business for the long run (because you can guarantee your competitors are advertising to them on Facebook as well).

Here are some segment thought-starters (dealers with smaller databases may struggle to find enough volume for some of these):

• Customers who have lapsed on service
• Unsold Prospects that submitted a lead within the last 30 – 180 days
• Customers with leases ending within the next 6 months
• Customers with estimated mileage above 60K

The second main targeting method using first party data is Lookalike Targeting. This is primarily used to find NEW customers. Facebook’s Artificial Intelligence (AI) will examine the customer lists you upload and find similar people in your area that look like them. One could surmise that if you load up your customers who have purchased multiple vehicles and/or service with you regularly, you would do well to find other NEW people who likely share those same propensities.

As you’re conquesting, you want to increase your chances of finding new customers with a high lifetime value. It all starts with what Facebook calls a “seed list”. You can upload a list of consumers and select “create a lookalike audience” within Facebook. You can then assign the Lookalike Audience to a specific ad. Facebook requires that you match at least 100 people to create a lookalike, so you’re best to upload a list of a minimum of 150 people as Facebook will not find a match on every person you load (more is even better if you have the consumer count).

Here are some thought-starters for Lookalike “seed lists”:

• Customers who’ve purchased more than 1 vehicle from you
• Customers who’ve serviced with you more than 3 times and own your primary make
• Customers who’ve purchased an SUV in the last 2 years

For Direct Targeting and Lookalike Targeting, you can load lists yourself if you know how to properly segment your DMS and CRM lists to select the people you want. You can run these campaigns every month, or only choose to run them periodically. If all that sounds like too much of a burden, there are vendors who have APIs already set up with your DMS/CRM and have APIs set up directly with Facebook to automate the Direct Targeting and Lookalike Audience creation for you.

“A wider pool of interested people creates a lower CPC. In a nutshell, consumers like Inventory Ads as evidenced by the low CPC and high engagement.”

Offline Attribution

One of the most compelling use cases for your first party data is attribution. After all, you want to know if your ad spends are leading to sales and repair orders.

Not that long ago, digital advertising was a black box when it came to attribution because there wasn’t a way to load your offline sales and see whether those people saw or interacted with your ad prior to the transaction. The technology and privacy controls are now at a place where this is a reality.

To be clear, Facebook won’t tell you if “John Smith” saw your ad and bought a car because there are important privacy protocols in place.

However, Facebook can tell you that “11 people” bought a car after seeing or clicking your sales event ad, for example. You can even load your revenue or gross profit with your sales and service transaction file so you can calculate your ROI compared to your media spend.

You can either load your sales and service RO files manually to Facebook each week/month or select a partner that can automatically load them daily.

Your file will need important data points like the consumer’s name, email address, phone, the date of the transaction, was it a sale or RO, etc. Facebook will anonymize the PII (personally identifiable information) through a sophisticated hashing process so your consumer data is secure.

It’s also important to note that Facebook’s attribution method will not catch EVERY single sale or service match. Let’s say you load a list of 1,000 people who bought or serviced from you.

Facebook will take the info you provided and try to match that to known people on Facebook. It may not be able to find everyone because the user may have entered an old email address when they set up their Facebook account.

That same person gave you a different email address when they bought the car. Facebook can’t confidently determine that it’s the same person because the emails don’t match.

Therefore, they will not count that as an attributable sale even if that person saw your ad and came in. So, Facebook is likely under-reporting attribution, which is much better than over-reporting.

“Your first party data is your most valuable asset. Use it to reach your greatest potential.”