Car buyers, billboards and Facebook ads

When we lived in Northern Virginia earlier this decade, one thing we noticed is the lack of billboards along the highways. It was a pleasant discovery — but very noticeable to two people from the Chicago area, where billboards are plentiful (especially a growing number of brightly-lit electronic billboards with rotating ads.)

So as I drove to Midway Airport earlier this week, I started actually paying attention to the billboards. And my thoughts immediate turned to Facebook ads.

Let me explain why …

From past experience, I know that billboards in the Chicago area can run anywhere from $5,000 to $15,000 per month, depending on location.  So, let’s use a nice round average of $10,000 per month.

Now, let’s say you’re a car dealer paying this amount every month to have a billboard on I-55 going into Chicago (there are a lot of new car ads.)  That’s $10,000 a month to advertise to a large audience — most of whom are not in the market for a new car and may not be for a while, and many of whom do not reside/shop in the region or live out-of-state.

Bottom line — that’s a lot of money for a shotgun approach at advertising to a lot of people who may never purchase your product.

So … what if these car dealerships started spending their money on Facebook ads instead of billboards?

I decided to run the numbers.

First, a quick Google search turned up the following demographics of the average purchaser of a new SUV:

• Young married couples (30-35).
• Medium family income $60,000
• Over 50% female buyers

So, I decided to enter those  demographics into the Facebook ad manager for the city of Joliet, IL (near where I live.)  The results should be of interest to any Joliet-area car dealer currently wasting $10,000 a month on highway billboards….

For a mere $50 a day, using the car buyer demographics listed above, a Joliet car dealer could expect to reach a total Facebook audience of about 119,000 women right in their city — and receive 66 click-thrus a day from that audience. That’s just over 2,000 click-thrus a day from a targeted demographic of local consumers who are actually choosing to view your new car ads — for a total cost of about $1,500 per month.

Of those 2,040 people who click on the ads, how many will actually purchase a car?  Hard to say — but are car dealers currently tracking the return on their $10,000 a month investment?  Hardly.

To me, it seems like a no-brainer.  And it doesn’t just apply to Facebook ads.

I used the above example during my presentation yesterday to the U.S. Chamber Regional Government Affairs Conference in San Francisco.  I used the car dealer example — but then asked the audience if they could do the same to target Facebook users by political preference, demographics and keywords to take action on specific policy issues.

The uses are endless, really.

Is this post meant as a cheap ad for Facebook?  No — new online tools such as these are popping up all the time.  We’ve used keyword ads on Google and MSN in the past with good success.

My point is that online tools are changing the way people consumer their news, information and, yes, ads.  We now have the ability to target ads as never before.

And, in a tough economy, that can be hte difference between $10,000 a month for billboards — or $1,500 a month on ads that might actually work.