3 Essential Dealership Marketing Strategies For The Microchip Shortage

3 Essential Dealership Marketing Strategies For The Microchip Shortage

The pandemic, microchip shortage, and resulting production limitations have made inventory scarce for auto dealerships across the country. Simultaneously, as unemployment rates fall and city dwellers relocate to the suburbs, consumer demand for vehicles is surging. 

According to NADA, 14.93 million new light-vehicle units were sold in 2021, an increase of 3.1% from 2020. The average used vehicle price at franchised dealerships reached $25,904, a 19.1% year-over-year increase. And yet, Auto Forecast Solutions predicts that 11.3 million vehicles will not be produced globally as a result of the chip shortage in 2022.

So what does this mean for dealership marketing? 

Innovative dealerships are discovering new ways to market their businesses, generate incremental revenue, and reach new types of customers on new digital channels.

We’ve compiled a few strategies to help your dealership get the most out of its marketing in 2022.

Competitive conquesting 


Consumers are willing to travel longer distances to find a dealership with inventory. Shoppers are also more open to trying new brands and vehicle types, depending on what’s available.

“With dealer lots cherry-picked and sparse, many car buyers have been forced to reconsider their choices and kick the tires of overlooked models and brands,” The New York Times writes.

Historically, automotive marketers delivered their advertising in a tight geographic radius around their store, and targeted consumers with an interest in their OEM. Today, this radius is increasing from 25 miles to 100 miles. Subaru dealers are targeting Mazda faithfuls — and vice-versa.

This is known as “competitive conquesting” — when an advertiser enters a competitor’s territory or targets another brand’s customers.

As a result of scarcity, dealerships have an unprecedented opportunity to gain greater geographic market share and convert loyalists from competing brands. 

Expansion to new digital channels


Search and social are among the most powerful tools in the dealership marketing toolbox. In recent years, however, competition on these platforms has increased significantly. What many dealers don’t realize is there are emerging digital channels that are effective for reaching customers and driving sales, such as smart TV and streaming audio.

Smart TV ads place your dealership on the largest screen in the household and appear as people stream their favorite shows and movies on channels like Hulu and Peacock. Streaming audio ads allow you to share your message with consumers as they listen to podcasts and music on apps like Spotify and Pandora. 

These channels are the future of television and radio advertising. They allow you to reach prospective consumers in no-swipe, no-scroll environments when they’re in a relaxed state of mind. And unlike their over-the-air predecessors, dealerships can target car shoppers with the accuracy of a digital campaign.

Today, there is modest competition for dealerships on these channels. Since inception, these ad placements have been largely utilized by national brands. In 2022, testing these new digital channels can help you reach new audiences and drive incremental business for your store.

A shift in messaging

In recent months, dealerships have begun to shift their messaging and place more emphasis on other key revenue drivers, such as parts, service, and trade-ins. Some have even positioned their services similarly to Carvana and Vroom by asking consumers to sell them their vehicles with an instant appraisal and cash in hand. 

To effectively market these types of offers, it’s important to test various combinations of words, imagery, and calls-to-action, especially if your store doesn’t have much insight into how this messaging performs online. And if Vroom’s Super Bowl commercial was any indication, it’s crucial to turn heads with your creative execution.

Fortunately, with today’s digital advertising technology, creative and messaging swaps can be executed dynamically. As the ads run, you can sit back and let the data tell you which combination delivers the best result.

Interested in trying these strategies for your dealership? We’re offering dealers a $250 credit for the ad format of their choice. Click here to learn more.

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