Dealers are spending more and more money each year on Google AdWords campaigns.
AdWords can be a very effective way to connect dealers with in-market shoppers. With budgets increasing, I want to encourage dealers to demand more transparent reporting from their AdWords management agencies.
In particular, I would like dealers to request that each AdWords campaign to have additional metrics documented so that some specific campaigns can be better optimized. In the example below, adding three columns to standard AdWords reports can be very helpful in campaign optimization for online advertising strategies that are designed to connect consumers with in-stock cars.
Not all campaigns are designed to drive consumers to look at in-stock vehicles. However, campaigns like a dynamic inventory campaign based on in-stock VINs, should be driving a high percentage of clicks your dealership website’s most important page(s) – the Vehicle Detail Page (VDP).
The data shown above is from actual dealer campaigns that I recently audited.
In the case of the “Dynamic Cars” campaign, only 14.93% of the clicks are looking at VDPs and the cost per VDP is extremely high at $12.55. The Cost per VDP View (CVV) on dynamic used car campaigns should be under $2.50, and under $3.50 for new car campaigns which are designed to drive consumers to look at specific inventory.
Of course, branding campaigns, service campaigns, or promotional sales will all have higher Cost per VDP View (CVV) metrics so you would not use that metric for optimization. When dealers start to look at this data, amazing things can happen. They can optimize their campaigns and drive more shoppers to their in-stock inventory at a lower CVV.
To lower the Cost per VDP View (CVV) on AdWords campaigns I have found two strategies that are a good starting point. First, look at keywords inside the campaign Ad Groups that have a very low VDP penetration and also a low lead conversion ratio. By removing poor performing keywords, based on VDP activity, you will lower the CVV.
The second strategy is the test reducing the marketing radius of your campaigns. Keep in mind that shoppers will click on ads they think will help them find a car but there is a limit on how far they will drive. For example, although the Brooklyn is geographically close to Rumson as the crow flies, I will never buy a car from Brooklyn.
When you start decreasing the marketing radius an interesting thing happens; VDP visits increase and so do the VDP views per visit. Dealers should be optimizing their Google AdWords campaigns to first maximize local shopper activity before spreading their marketing budget too thin in cities outside of their primary markets.
So, reach out to your AdWords agency today and get your monthly reports modified to include KPIs that give you actionable insights and new ways to optimize your AdWords campaigns.
How are your AdWord Campaigns performance measure up?
Do you have a strategy around reducing your cost per VDP view?