Paid Search Drives Local Floor Traffic Sales?

I read this article on Searchengineland.com the other morning. The basic point is this: brick-and-mortar stores that have ecommerce websites (so that they can conduct actual click-to-sale transactions online from their paid search advertising) receive $6 worth of OFFLINE, IN-STORE sales from their paid search spending for every $1 they receive in click-to-sale revenue online.

I find that to be a truly startling statistic. If a brick-and-mortar business that sells online is only looking at click-to-sale ROI, are they under-counting the return on their paid search by a factor of 600%?

The ramifications for car dealers are tremendous. If you are only evaluating your PPC from the website leads and subsequent sales that your ad budget is generating, you may be dramatically mis-evaluating your program and mis-allocating your marketing budget.

According to NADA Data 2011, only 24% of the average franchise dealer’s 2010 marketing budget is Internet-related spending. The average dealer spent $6,600 per month in online advertising in 2010.

Here’s a quick breakdown of Dealer Spending by Marketing Channel in 2010.

image of 2010 Car Dealer Ad Spend Pie Chart

As you can see, while online spending is higher than any other single channel, it is still not even a quarter of a typical dealer’s total spend. I wonder if dealers aren’t spending more online because they are under-valuing the return on their paid search budgets by only tracking form submissions. I always recommend to our dealers that if you are doing paid search advertising, you should ABSOLUTELY use call tracking so that you can account for the phone calls you’re driving with your ad spend.

It is incredible that it has taken until 2010 for Internet ad spending to FINALLY pass newspaper spending in the average car dealer’s marketing mix. Here are the changes that have taken place over this decade in Internet vs. Newspaper:

Interent vs newspaper ad spend

While the Internet has passed newspaper in car dealer’s ad budgets, dealers are still spending over 20% of their advertising dollars on print. I know many dealers who have turned their marketing mix “upside down” and are now 70%-90% online vs. traditional and EVERY one of them who has done this has dramatically increased their sales during the process.

Generally, dealers need to be doing paid search. If you’ve had a bad experience with paid search in the past, there may be a myriad of reasons:

  1. Wrong Vendor
  2. Poor Tracking/Reporting
  3. Too Expensive
  4. Too Much Time

None of these should be a barrier for a dealership at this point. There are a number of agencies and website companies that can effectively manage paid search on a dealer’s behalf. You should be able to get call tracking as well as website lead tracking for your paid search spend so that you can see exactly how many and which leads came from your PPC campaigns.

If you have Google Analytics on your website, you should be able to get any vendor to provide URL tracking so that you can see visits, bounce rate, time on site, and leads at the keyword level. Remember that for every website lead that you ARE able to track via your form submission reporting (whether it is from your website company or your CRM), you may not even be accounting for several more.

Would you agree that your paid search is driving floor traffic and sales for your dealership?

image of Amir Amirrezvani Amir co-founded DealerOn in 2002 with his partners, Ali Amirrezvani and Navid Azadi, to help auto dealers increase the effectiveness of their online marketing efforts. He has spent the last 8 years helping DealerOn with marketing and product development.

Please note: I reserve the right to delete comments that are offensive or off-topic.

10 comments
terrencegordon
terrencegordon

Amir, nicely done. PPC advertising is probably THE most effective and yet under-valued advertising medium available to ANY business - both online and offline.

The problem with many dealers is the lack of buy-in from the GM and/or the online budget is kept separate from other traditional advertising budgets. Often it comes out of the "Internet Budget" run by the Internet Manager. But GM's should be sold on the fact that PPC advertising provides leads for all profit centers of the dealership including Parts, Service and Finance.

Where else can you show up in front of potential customers who are PROACTIVELY searching for products and services your business offers...and pay only for the ads that work???

terrencegordon
terrencegordon

Amir, nicely done. PPC advertising is probably THE most effective and yet under-valued advertising medium available to ANY business - both online and offline. The problem with many dealers is the lack of buy-in from the GM and/or the online budget is kept separate from other traditional advertising budgets. Often it comes out of the "Internet Budget" run by the Internet Manager. But GM's should be sold on the fact that PPC advertising provides leads for all profit centers of the dealership including Parts, Service and Finance. Where else can you show up in front of potential customers who are PROACTIVELY searching for products and services your business offers...and pay only for the ads that work???

ChrisMillerADS
ChrisMillerADS

Amir,

You nailed it! Thanks for publishing this and I hope that many dealers take the time to read and understand this. I'm really amazed at how small a contribution from the marketing budget actually makes it into Paid Search (if anything).

Also, many dealerships do not have a very solid lead follow-up methodology in place so it is difficult for them to measure the value of the leads they are getting. Even if they do a great job of tracking where the leads come from, if they are not converting them then they simply do not see the value of Paid Search. I can see from your website that your company does address this - As do we address this at Advanced Dealer Systems. I like your approach.

-Chris

ChrisMillerADS
ChrisMillerADS

Amir, You nailed it! Thanks for publishing this and I hope that many dealers take the time to read and understand this. I'm really amazed at how small a contribution from the marketing budget actually makes it into Paid Search (if anything). Also, many dealerships do not have a very solid lead follow-up methodology in place so it is difficult for them to measure the value of the leads they are getting. Even if they do a great job of tracking where the leads come from, if they are not converting them then they simply do not see the value of Paid Search. I can see from your website that your company does address this - As do we address this at Advanced Dealer Systems. I like your approach. -Chris

Automotive SEO
Automotive SEO

Amir

A great reminder that dealers need to hear.  Regardless of their past experience or gut feelings that have kept them away from paid search, they have to find the right partner to engage.  

As Google continues to sterilize organic search listings, paid search is becoming an important foundation in a comprehensive marketing strategy.

Also mobile PPC campaigns are showing great results for the dealers who want to engage in PPC on mobile devices.  With the limited space on a mobile device screen, PPC is a strong advertising strategy.

Happy New Year to the you and the DealerOn team.  See you at the 2012 Digital Marketing Strategies Conference prior to NADA.  http://www.digitalmarketingstrategies.org

Automotive SEO
Automotive SEO

Amir A great reminder that dealers need to hear.  Regardless of their past experience or gut feelings that have kept them away from paid search, they have to find the right partner to engage.   As Google continues to sterilize organic search listings, paid search is becoming an important foundation in a comprehensive marketing strategy. Also mobile PPC campaigns are showing great results for the dealers who want to engage in PPC on mobile devices.  With the limited space on a mobile device screen, PPC is a strong advertising strategy. Happy New Year to the you and the DealerOn team.  See you at the 2012 Digital Marketing Strategies Conference prior to NADA.  http://www.digitalmarketingstrategies.org

ChrisMillerADS
ChrisMillerADS

Great Point Terrence,

...and it also offers an opportunity to track off-line campaigns. You could actually ask that people Google a certain promotion key phrase "Bob's Auto Labor Day". Tracking this gives you real insight as to the effectiveness of a radio, billboard or TV add. There are many opportunities lost because dealerships keep traditional and online so separate.

@terrencegordon

ChrisMillerADS
ChrisMillerADS

Great Point Terrence, ...and it also offers an opportunity to track off-line campaigns. You could actually ask that people Google a certain promotion key phrase "Bob's Auto Labor Day". Tracking this gives you real insight as to the effectiveness of a radio, billboard or TV add. There are many opportunities lost because dealerships keep traditional and online so separate. @terrencegordon