Dealership Marketing

Can Search Engine Marketing Destroy Your Dealers Budget?

Search Can Destroy Budgets

Auto dealers can get burned buying overly general keyword terms for search-engine marketing, some auto retailers who learned the hard way say.

Paying per-click for specific search terms effectively can highlight a dealership’s ranking in the results listings of search-engine Web pages.

But if chosen search terms are too broad, a dealership can end up paying for lots of clicks by Internet users who aren’t in the market to buy a vehicle.

That warning flag is raised during discussions on measuring online ad effectiveness at Ward’s Automotive Spring Training Conference presented by Autobytel in Tampa, FL.

Five years ago, the Shaw Automotive Group in Denver thought buying “Chevy” as a local search term would be a good way to draw customers to Shaw’s Chevrolet store.

But it backfired, recalls Matt Strickroot, Shaw’s former Internet director and now a vice president at Digitas, a firm specializing in digital marketing.

Shaw ended up paying for clicks by Internet users who were interested in Chevrolets, not necessarily in buying one at the time.

“We blew through $1,000 in three hours,” says Strickroot.

“It is hard to sell to someone not in the market,” says Omar Tawakol, CEO of Bluekai, a data company.

Buying general search terms can result in hello-goodbye results, says Stephen Stauning e-commerce director at the Asbury Automotive Group, a dealership chain.

“One example is ‘Honda Accord,’” he says. “If someone types in that when they are just researching cars, and it takes them to your dealership site, they often leave right away.”

Asbury also avoids the controversial strategy of buying a competitor’s name for a search term as a way to snare customers, Stauning says. “If people type in your name, and it takes them to a competitor, they say, ‘Oops, that’s not what I want,’ and leave.

“Search-engine marketing was supposed to put third-party lead providers out of business, but a lot of dealers ended up taking it on the chin with search,” he says.

If a dealership indiscriminately buys a bunch of keyword terms, the store may end up with a lot of website visitors who are unqualified as buyers, Stauning says.

Only 23% of online traffic to Asbury dealerships comes from keyword searches, he says. “If you have a big brand, like our McDavid in Texas and Neely in Atlanta, you don’t have to do a lot of search.”

Half of Asbury’s stores use search-engine marketing to generate leads. Others rely on leads from auto maker, dealership and third-party websites.

“Search is not the silver bullet it was touted to be,” says Todd Swickard, president and CEO of Auto Dealer Traffic Inc. “People spend six minutes on the search process and four to six weeks on the car-buying process.”

It is fair to question whether paid search would have been more effective in the past, says Dean Evans, chief marketing officer for Dealer.com and a former dealership manager.

“Digital (marketing) is still a good value,” he says. “Even though it may have been hit in the past, doesn’t mean it isn’t where you should be.”

Evans says too many dealers are preoccupied with the attractiveness of their websites. Their real concern should be whether online efforts drive traffic that, in turn, is converted into dealership sales.

Meanwhile, some skeptics question the touted advanced qualities of search engines.

They deserve credit for predictive algorithms, says Tawakol. “But if you type in ‘SUV Seattle,’ what do you think you’ll get? It’s pretty obvious as a search result.”

Article by Steve Finlay
Ward’s Dealer Business

Re-published with permission – thanks Cliff!

K
  • K
    Ken H.
  • June 10, 2008
Dealers should be concentrating efforts on the organic search side of the equation in which 75 to 80% of all searches occur at no fixed cost per click to the dealer also. There are "whitehat" companies offering good fixed cost organic SEO services out there. Why are dealers so concerned about PPC when only 15 to 20% of the activity happens there? Think about it, how often do you yourself actually click onto a paid listing? was it truly the most relevant for you in your search?
B
  • B
    Ben
  • June 10, 2008
Ken H - I'll tell you why people still focus on PPC. All research concerning Search Marketing, public and private that I have seen, shows a multiplyer effect from placing in both organic as well as paid search. These studies have been conducted over the past 8 years and have been very conclusive. I've personally experienced this affect with my own sites.

There are companies who flat out dominate the organic results and still pay $100,000+ a month on paid search, and, they are not doing it for the fun of it. They have tested, studied the results, and understand the performance dynamics - it pays very well to succeed at both. Search marketing is a very detailed and knowledge based practice. Many who dabble in it feel they have a very comprehensive understanding of it, unfortunately they are mislead. They are only dealing with the tip of the iceberg. This is why it pays to hire Search Engine expertise, hold them accountable for their performance, and let them do their job.
C
CPC is good for new sites, promotions, and arbitrage. What it is REALLY good for, is reaffirming your good organic positioning. So when someone searches for "2008 honda accord in massachusetts" not only are you ranking high organically, the user also is shown your ad, giving them a good feeling about your site right away.

CPC isn't as a sustainable source of traffic like good SEO is. That is where we spend the most time.
B
This article is so far off track of what is actually true that its bordering on just plain stupid.

"“One example is ‘Honda Accord,’” he says. “If someone types in that when they are just researching cars, and it takes them to your dealership site, they often leave right away.”"

If you have the right text ad crafted then it shouldn't matter what phase the buyer is in. You will qualify them BEFORE THEY CLICK THE AD using the text in that ad.

We can see upwards of 10-20% conversion rates on some of those broader type terms.

I highly suggest you follow the advice in this article so our clients can get cheaper clicks on those broader keywords and all of YOUR leads.

P.S. To Ken: There is no where near the available traffic on organic local terms as there is on broader PPC terms that are locally targeted by IP.

B-Man


J
  • J
    Jeff Kershner
  • June 10, 2008
B-Man, I'm glad you said it because when I read the first part of this article, the first word that came to mind was "amateurs".

Of course you can burn through your budget like fire if you're paying top dollar for top placement for general keywords such as "Chevy" and "Honda Accord".

You can be effective with general keywords like this but you to take into account all the effective elements.

1. The RIGHT copy/message in your text ads.
2. Placement on the results page. (Top is NOT always the best and Google does give you control over this)
3. Where you land the customer.

"Asbury also avoids the controversial strategy of buying a competitor's name for a search term as a way to snare customers, Stauning says. “If people type in your name, and it takes them to a competitor, they say, ‘Oops, that's not what I want,’ and leave." - AGREED! again it comes down to the copy you are using in your ad.

It's interesting to see so many opinions and angles in 1 article. It basically boils down to knowing what you are doing, testing and re-testing your campaigns. There are sweet pockets of success, you just need to know how to find them.
S
Hhhhhmmmmmmmmm! Search traffic without conversion. The number one concern for every dealer should be "how am I going to convert this traffic to usable leads"? Conversion is a piece of cake - want o know how?

Never buy your PPC from a company that does organic and never buy your organic from a company that does PPC. Trust me this is the golden rule of search traffic.

Steve
http://www.ScreenCrafters.com
M
I'm getting a "2003-ish" vibe from this article. Too bad we're in 2008.
A
I'm glad he brought up something on buying competitors' names. I used to do this before I realized it was converting at almost 100%. Then I started looking at what was going on and realized I was just saving people a click at my expense because these customers were coming over (and converting) anyway.

There are a few of my competitors buying our name + franchise, and it just brings a smile to my face. They get at least 3 clicks a month from me - it is my favorite way to check their sites out! They get a few more from people I've trained to also click on them each month...our GM's love spending their money too!
C
Alex, I'm sure at this point, those clicks are getting discredited (or credited?) if they're coming from the same places click after click.
A
If you do it all the time, yes. If you keep it to a minimum, then no.

Minimums can be rather large.
J
  • J
    JL
  • June 11, 2008
With all the hype about SEM in nearly every publication I've read as of late, I have a few questions. What is a good percentage of budget to devote to SEO/SEM for a major metro dealer? Is it true that a good percentage, say 40%, of sem generates leads for fixed ops? I've heard that number thrown out before. Seems to me that more google searches for make specific dealers in a certain city would be hunting for fixed ops rather than a used car of that make.
Last thing, what about diminishing returns? What B-man alluded to is the more active this medium becomes the more costly it becomes for everybody and the harder it becomes to justify. I'd appreciate your thoughts.
B
  • B
    Billy
  • June 11, 2008
I sincerely hope you guys that are so stuck in the SEO whirlpool are in my market area.

If you pay attention to your keyword and phrase click-throughs and conversions, dedicate yourself to being in the proper position in sponsored results (#1 is not necessarily #1), have the relevant content when that click becomes a visitor, have a mack-daddy presentation of your product, target the relevant demographic in relation to your ad/current promotion, know a smidgeon regarding internet statistics and trends, etc.... you shouldn't have a problem.

Having only been in the car business for 3 yrs (eCommerce 15 yrs) I'm simply amazed each and every day with the comments I hear from those in the car biz regarding SEM, SEO and eCommerce/eBusiness as a whole.

My opinion of most SEM and SEO companies are that they typically just throw up the keywords and phrases and set it on autorun. Paying no attention to the actual results but relying on stats spit out by software.

Look at your website statistics, referrals and keywords. Study, analyze and dissect each and every aspect of it. THAT is where you'll find out what's really going on (just before you fire your SEO/SEM vendor). You use autocount and others to determine your market areas and demographics for mailers, TV, radio and newspaper why not the internet?

SEM is exponentially more targetted than SEO or any of the traditional media options. You can highlight individual units or today's new incentives right away. Using landing pages you control in-house is critical to the use of SEM. If you decide to slash prices on old-age units you can let your market area know in moments, not months.

The bottom line is, unless you can find a legitimate SEM company to control this most critical cog of your advertising wheel, hire someone that understands it and train that person the automotive stuff.

We haven't done radio, TV or newspaper in 2 months now.

How much have you spent?

A
  • A
  • June 11, 2008
Is anyone familiar with the company Reach Local. They claim not to charge any monthly management fees. They say they are able to buy keywords from Google in bulk and sell them back to the client at a price they would have paid anyway. This is how they supposedly make their money. Anyone have any thoughts on this?
A
  • A
  • June 11, 2008
Is anyone familiar with the company Reach Local. They claim not to charge any monthly management fees. They say they are able to buy keywords from Google in bulk and sell them back to the client at a price they would have paid anyway. This is how they supposedly make their money. Anyone have any thoughts on this?
M
Very interesting comments everyone. I am surprised to not hear too much about systems or solutions that are auto specific and that allow the dealer to run ads day to day and stop them on demand. After all you should be able to target your ads day by day if needed and control them with no monthly mgt fees all within a few easy clicks.

Additionally when it comes to tracking, with PPC you should not only know what you are spending and the cost per lead, you should also know the exact cost per sale. Ultimately this is the only number that matters.

With today's technology and tracking capabilities dealers can actually see the amount of leads they will generate in advance of spending any money! If you really think about what else could you ask for? Also, using the proper tools you should never "burn" through your budget as this can be automatically controlled day by day by bidding technology that staggers your spend equally throughout each day of the month. If you have a $3000/month budget then you will spend about $100/day on PPC and you can even target that spend to different vehicles, departments, and specific geographical areas. This is not guess work anymore it is 100% science and in general dealers should be generating leads at under $10 per lead. Launching PPC campaigns should take a dealer a minute or 2 not countless hours. Companies like ours have spent years studying the metrics, results and best practices to come up with software that automates the parts of the process that do not need to be humanly administered. One thing for sure is this, dealers are burning much more cash on Print, Radio and TV than they ever could on PPC.

Mark Bonfigli
President, CEO
Dealer.com, Inc
www.dealer.com
J
  • J
  • June 12, 2008
@Alex

Never heard of Reach Local, but they sound like another company I spoke with on behalf of a client last year. Dealers really need to be careful who they trust for campaign management. I documented my personal experience with one company at

http://onlineautodealer.blogspot.com/2007/07/
search-engine-marketing-companies-for.html

Dealers seem to be targeted by a lot of these companies because lets face it, there are a lot of dealers who will throw money at something based on promises. Become better-educated on the subject and you'll spend more wisely.
U
Hmm... you can still do broad keywords and Geo Target. Why shouldn't my dealership come up when someone types in "Honda Accord" in my area...

Alex reach local is just a PPC consulting company... there is no bulk purchase option from Google. They do have reseller option... though.

Personally, I'm of opinion if your title is internet manager then it is part of your job description to manage PPC and work on Organic optimization.

J
  • J
    Jeff Kershner
  • June 12, 2008
Umer,

Agreed!
J
Alex,

I run the automotive division of ReachLocal and as Umer pointed out - there is no bulk discount from Google, Yahoo, MSN - or any other publisher we may work with - although we do have a reseller agreement. If you would like more information and a visual walk-through of our technology platform, please feel free to give me a call or drop me an email.

Just a couple of comments on the article. I'm not of the opinion that SEM should only be targeted to "in market" buyers, or necessarily as a substitute to buying 3rd party leads. At the end of the day it is simply very targeted advertising that if utilized efficiently, will yield a much higher ROI than other forms of advertising. If you set realistic goals and have the right expectations about how paid search will impact your business - along with a solid understanding of SEM that will allow you to do it yourself, or select a respectable vendor - then you will get plenty of ROI from your SEM spend.

Every dealer principal, GM, BDC Manager, Internet Manager/Director should absolutely be educated on how the Internet (search/display/social networking) is impacting their business. I can't say I agree that every Internet Manager's job responsibilities should include managing SEM - say what you will, but to do this efficiently and effectively can be fairly time and labor intensive and isn't simply a matter of selecting keywords, bid prices, then rolling the dice. Most would probably agree that the automotive industry (as a whole) is experiencing tough times right now - and there aren't many dealers I talk to who compensate their IM's on how effective their SEM campaigns are on the bottom line.

Whether or not you do it yourself, or you choose a vendor to do it - 9 dealers out of 10 need to be doing some level of paid search. They key to a successful campaign/strategy is understanding how to best measure results - and having the data by which to measure those results.

Jamie Adams
Director - ReachLocal Auto


J
IMO, the Internet Manager is too busy to learn and execute SEO and PPC.

List all the tasks that an Internet Manager (IM) has. Lil' dealer IM does all tasks, mega dealer IM has teams that execute tasks.

I say... Back to Basics.
Our photos suck.
Our options lists are rarely complete.
Our Veh. description writeups are empty, or, the same for all units.

Sexy, high quailty Photos sell cars, not the dark, inconsistant, fuzzy crap I see everywhere (my store included)

VIN driven options lists are only 60% of the option data. Bullet lists of options are rarely complete. If you have a used unit with a 6disc changer and rear DVD and no one knows about it, thats like cutting your phone lines and flushing gross down the toilet (when you finally do get a phone up).

Colorful, personal writeups sell cars, not not bullet lists.

IMO, 98% of all IM's need to focus on the basics of Internet Marketing before they move on and conquer PPC and SEO. Hire it out if you don't have the basics down perfectly.

Just my $0.02
Joe
A
  • A
  • June 13, 2008
Jamie,
I have been contacted several times by a Reach Local representative and I assure you I understand the basics of SEO and SEM. The reason for looking at an outside SEM company was from a time standpoint like Joe stated.
However, I think there was some misunderstand in part by your representative and how the program was initially presented to me. This actually prompted them to call me and re-explain the program after I submitted my first post.
Since you’re on here, let me verify something else. I was updated and told that Reach Local does not get a bulk discount but they do have a "special relationship" with Google because they bring them so much business. Meaning, Reach Local has patented technology that is supposed to be more advanced than anything else out there.
Here is my basic understanding of the program. You (Reach Local) have a patented technology that allows a computer generated system to determine the best keywords to use and automatically adjust and learn as time goes on. You (Reach Local) would buy a keyword for 92 cents and resell it to us for 94 cents and so on. This is the part that continues to confuse me if you don't charge any monthly management fees because in that example that would only be $40.00. Unless you are jacking up the keywords prices a huge amount. I must say that is not the way it is being presented.



K
  • K
    Ken H.
  • June 13, 2008
"Meaning, Reach Local has patented technology that is supposed to be more advanced than anything else out there." - regarding this line, I don't want to bore you with too many facts, but therre are over 40 companies claiming this and they all have somewhat of a case. The technologies range from outdated, to moderately performing to spectacular. There are industry experts that just evaluate the vendors of these systems and rate their overall performance.

If you find a good platform to work with (I'm not advocating one over the other - you need to do your own research and come to your own conclusions), you will easily outperform someone doing their program themselves. I now this last statement will upset some, but it is a fact. The ad systems and variables have gotten complicated and these sophisticated systems really deliver improved performance and results.

As fas as Reach Local's pricing model, it seems readily apparent to me that they are building their service fee into the cost of a campaign by building out the costs for the adwords based on a percentage. The question is what is the mark-up percentage they are using? Hopefully, they'll be able to tell us so we can use the information in assessing thier service.

B
  • B
    B-Man
  • June 13, 2008
"They get at least 3 clicks a month from me - it is my favorite way to check their sites out! They get a few more from people I've trained to also click on them each month...our GM's love spending their money too!" -Alex of Checkered Flag

@Alex: I'm glad you and your GM's have such high moral standing. I'm off to go click a couple of your ads.
A
  • A
  • June 13, 2008
Jamie,
Thanks for calling me personally.
Great information and it all makes much more sense now.
I will be in touch.

B
  • B
    B-Man
  • June 13, 2008
@Alex From Proctor: Reach Local does not buy clicks in bulk and sell them back to you. They put a ~20% surcharge on the click before they report it back to you in their reporting system so you never SEE the fees. It is absolutely impossible to buy clicks from Google in bulk and resell them. There are too many variables at any given time to even know what a click costs. Time of day, competition, quality score all impact the cost of a click.
W
Good comments Joe!

Setting up a quality SEM campaign can been done without hiring a vendor. It takes about 6-10 hours total if you do it right. I haven't touched mine in 6 months and regularily get $.68 / click. My only limit is what my owner is willing to pay.

And I agree with Mitch, SEO & SEM are very 2000ish. We need to look beyond. But like Joe says, the basics are so important.

On a side note, I was looking at Suzuki of Wichita and got to say I'm highly impressed with everything they do. Their owner's passion bleeds through the pages. I'm envious.

A
B-Man...where are the clicks?
R
Good Article,
My 2 or 3 cents:
I can see how if you decide to build a search campaign and let auto pilot take over this can lead to a wasted internet budget and a burned dealer. I personally would prefer to pay a marketing agency with a set monthly fee to build a custom automotive search campaign, monitor it and can offer accountable results when ever I so desire to see them. I would definitely stay away from any company offering multiple sales rep BS stories on how they can do anything without a fee.

The upside to using a automotive focused marketing agney allows the people or person in the dealership to assist with providing the correct information about what the dealership wants to place in text ads and allow them to do what they do best. Sell cars, in case you're wondering, instead of looking at numbers and keywords.

As for Search Marketing being the savior of your dealership well it definitely won't do this or kill the third party providers but one thing that is certain is search marketing is here to stay. I also must add that dealerships must realize people are like water and will always look for the fastest route to find what it is they are looking for whether it's a car or a quick trip to the grocery store if you don't provide the consumer a quick avenue to find their next vehicle, compare prices, or allow them to do research during the buying process I can guarantee your competitor across the street is, and if you're spending 10k a month on full page newspaper ads why not shrink the news ad to a half or 3/4 page and use the remaining portion on search marketing to provide this quick link and offer the searching consumer the details needed to make an educated buying decision. Just a thought...
B
@Alex Of Checkered Flag: I guess you missed the sarcasm.
A
Some people believe it makes more sense to run SEM on your own vs. hiring a company. By my research there seems to be companies out there that have computer programs that generate the best key words or phrases. Also, it would be tough to set up and to continue to monitor an ad words campaign from a time standpoint.
What do you all think about this and what have you experienced?

J
I am just ramping up the 1st PPC campaign for this store. I cannot believe all the idiot dealers out here.

I am in NY and just 2 hours into the keyword research and I am seeing dealers from Montana, Colorado, TX, N. Carolina... good God, these idiots are everywhere.


Word to Mark Bonfigli or Dean Evans.
Is your PPC management tool a stand alone platform? If so, these PPC newbies really need your help. What better way to validate value than documenting "self managed waste".

CONCEPT:
Create "PPC Crisis" call list using GOOG's new "Ads Preview Tool". Try it for yourself. Goto: Adwords> Campaign Management> Tools> Ads Preview Tool

Toss in a quality short tail keyword, then look into each State or regional Market to find the "lost children".

EXAMPLE:
state: ALABAMA
keyword: chevrolet avalanche
www.BillCrispin.com Maine
www.CourtesyChev.net Arizona

state: ALASKA
keyword: Chevrolet SSR (gulp!)
www.RosenthalChevrolet.com Virginia (none in stock!)

state: ALASKA
keyword: Chevrolet equinox
www.arizona-chevy.com (I can't believe Chapman would make this error!!)
www.BillCrispin.com Maine (oh oh, someone’s in trouble and doesn’t know it yet)

Gents, You get the idea.
Have your team feed this GOOG interface a list of quality short tail keywords then harvest the PPC URLS that are out of their geo area. Chances are that these fellas are making PPC 101 mistakes so they're in Alaska and don't know it.

WIFM?
What's In it For Me?
I'd bet there is are 50 to 100 dealers RIGHT NOW committing PPC hari kari. I am upto my armpits in a zillion PPC variables. I'd really like a free year of your TotalControl DOMINATOR to put this PPC effort on auto-pilot. I'll sweeten the offer with a tasty testimonial to boot!

Joe
p.s. Please disregard this bird-dog request if your PPC mngt. platform requires your site, I have a totally new site in the cooker.
O
Great topic....PS Jeff Kershner can you add a search function to your blog? or am I just totally overlooking it?

Regarding PPC advertising. Most dealers are quick to spend a certain budget on PPC advertising but do not get involved in getting better results. You can bid on a general keyword like "Chevy" as long as you create the right text ad (remember this is advertising so you set the message) to go along with it, so you weed out people that are not looking for what you have to offer. Same goes for the landing page for that specific keyword, you need to create content that fits that keyword and your actual ad. This will obviously lowers the amount of clicks, but the great thing is you still get branding for your site with the right message and you only pay for traffic that is relevant.

Tell me how many of you guys create different campaigns for different keywords with different messages in the ads and different landing pages? I doubt more than 10% does this. Partly because we are too lazy to do this, partly because we have a third company doing it and they have just as little knowledge as us or they are too lazy, and/or our website provider does not give us the means to create a different landing page per keyword or campaign.

I am guilty of the same, because I simply do not have the time (although by the number of posts on this site, I should question myself on this ?) so I chose to use a third party provider.

Regarding the use of SEM vs SEO. SEM is not only for new websites until their website starts ranking. There is research out there that shows that a certain percentage of search engine traffic clicks on sponsored ads, so you should have your company's website in both sponsored and organic results.

Now one thing that I think you should avoid is the following. Yahoo allows sponsored listings in organic results. Yep, scary thought huh. So if you are already on top of SE listings, you have to make sure that your SEM campaigns do not list in the organic results, because it will replace your organic listings and you are paying for clicks that you would get for free.

This creates an extra load of work, because now you have to create different campaigns for different marketing messages and have to worry about whether you rank high for the keywords in the campaign organically. If you are not, have Yahoo place you in the organics, if you are, then leave that campaign out of the organics.

On top of this, you need to think whether all this is worth the hassle having to worry about. Our site is not getting enough traffic to worry about it, but some larger dealer groups should definately look at this.

Again this points to the problem I have with the inflexibility of most (probably all - just do not want to make a claim that is not true) dealer website providers.
A
First time checking out this blog, but I got to say I'll probably be here more often
A