Cobalt and GM Dealer Websites
I believe what you are about to read will open your eyes to the waste and mismanagement at General Motors and Cobalt websites. We have to start at the beginning of the fiasco a couple of years ago when GM had realized that the Internet was a boom that was not going away, not only that, but would flourish year after year. Not being in the “internet business” They decided to hire a company that was supposed to exceed in online marketing and advertising such as Cobalt websites. They had decided that it was very important to send out the same message; they wanted the consumers to receive consistent relevant messages and obtain the same information from one source.
Ok, now let’s look at the plan they created and put into action. It was and is a great plan with some very devastating failures built in. General Motors and Cobalt decided that unless you have a website by Cobalt you would not get a link from any GM advertising such as Chevy.com or from Onstar mailers for people that purchased a GM vehicle. That was a great idea for Cobalt because now they had the first monopoly on websites for General Motors. They may say it is not a monopoly and that you can have any website produced by any website company you want, but the importance of links from the manufacture sites to the dealer sites is so relevant that if you do not have these links it will not only cost you new business but also repeat business. Let me give you a couple of brief examples. You are a consumer visiting Chevy.com, you are searching for a particular vehicle doing your research on incentives etc and you come across a link to search dealers inventory (remember no cobalt website no link), you find a dealer in your area click on that link and search that dealers inventory. So in this instance, a dealer without that link can potentially miss out on a huge customer base by not having that all important link on the Chevrolet website. Even though that same dealer pays into the same advertising funds as his/her co dealers. Most dealers do not even realize this as they take the easy way, not understanding internet marketing, they take the word of the professionals at General Motors and Cobalt, but what they do not see is the right to CHOOSE has been ripped away from them as you are severely penalized for not using Cobalt websites. Another example is when a consumer purchases a vehicle that has Onstar installed, that consumer receives e-mail updates that have relevant links back to dealer website (only produced by Cobalt), so if you do not have that Cobalt website you will not get the relevant links back to your dealership costing you potential service revenue and sales revenue. So the potential for severe loss of income over the years is over whelming to say the least.
Let’s take a look at the waste that is being made everyday online from General Motors and Cobalt websites. Somewhere about 2007 Cobalt came up with a plan and somehow convinced someone at General Motors that they would get all of the dealers onboard the internet band wagon. First they would give all the dealers a “free website” General motors’ would pay for that, as Cobalt executives pointed out that if GM paid for those websites and sent out the same message then it would garner more sales for GM. So the idea was sold and bought by GM, Cobalt would build a distribute the websites and GM would pay for them as they would be free to the dealers. Cobalt also would do free search engine marketing for the dealers, also paid by GM for its dealers. But seriously folks if you believe for one minute that any of this was free then please rethink, and remember there is nothing free in this world, there is always some cost somewhere and here is where it was paid from: “THE DEALERS ADVERTISING FUNDS” Yes everything you thought was free is paid for by the advertising fees on the invoice. Every car sold, paid for those dealer websites. This new program is called the iMR program and is nothing short of a huge scam and waste by General Motors and Cobalt.
Let’s look at the one most wasteful use of advertising funds: Pay Per Click advertising or search engine marketing. Now remember this was also promised to its dealers for “free” but of course is not free as it is also paid for by the advertising fees listed on each invoice. The concept here is very simple, and has to be one of the most wasteful plans put into action by any corporation this decade. What I am about to prove to you not only is wasteful but also has to be one of the most “IGNORANT” plans put into action by General motors and I say ignorant as they are obviously blind to the massive waste of advertising dollars.
The idea is simple: place paid search advertising at the top of search engines using the dealership name and when it is clicked on have it point to the dealership’s Cobalt website. Seem reasonable? Well let’s take a better look at it. If you type in a dealers name into Google, Yahoo etc, on that first page, that dealers web pages will fill the whole first page and second and so on, this could actually go on for hundreds of pages. So why would you pay for a search campaign using a dealer name when it will show you all relevant pages without paying for it?
Does this paid search benefit the dealer?
Does this paid search benefit General Motors?
Nope, there is only one self serving reason to have this search in place and that is to benefit Cobalt website company as they get paid to implement and run that campaign, so the more clicks the more revenue, oh sure a large part of that goes to the web server but if you think it does not profit Cobalt then please think again. This type of campaign also helps Cobalt reassure GM that it is relevant by all the hits that it receives. Excuse me Cobalt and GM but wake up, don’t you think if you typed the name of a dealership you would click on one of the very first ones to show up to get to the website? So why pay for something that you get organically for free? It all comes back to waste of advertising dollars and most probably hundreds of thousands in advertising costs that could be put to much better use, such as: when some on types into a browser “Joe Schmoe Ford dealer”. Now a pay per click campaign going after that search term and name makes sense if it has the correct message as it is directed at a consumer looking at the competition. So if you can redirect that consumer then you would have a successful pay per click campaign and one that would not be a waste of advertising dollars.
All of this only serves Cobalt websites as a monopoly; it does not serve the dealer or General motors. If you take a close look at the reporting analytics of Cobalt with an open mind, you would see a unreliable analytics as the way they report only benefits “Cobalt”. Such as viewing a consumer who looks at hours and directions on the website as a viable conversion. In my expert opinion, your conversion from a website is “a hard lead to a dealer from the website with a name, telephone number and e-mail address, and or a telephone call to the dealership. There is no other conversion, so to grossly report otherwise is only to show untrue numbers in reports.
I have been asked what does it matter where the leads come from. Let me explain that everything matters when advertising on the internet. One of the main reasons it matters where the consumer goes is what is called a conversion ratio. If a dealer has a website that truly converts 10% to 13% of its website visitors compared to a website that converts 5% of its website visitors, I have to ask where would you want your consumers going. One very ironic rule in place at Cobalt and General Motors is everyone that has a Cobalt website gets the pay per click campaign even if they do not want it. It is forced on the dealer. So in essence what happens is Cobalt is stealing from the dealer and using the dealers advertising for their own benefit, not for the benefit of the dealer, not for the benefit of General Motors but only for the benefit of Cobalt. And the sad thing, is it comes from General Motors because a salesman sold the idea to some Bimbo at General motors. So if you are a dealer and you ask Cobalt and General Motors to remove that pay per click campaign they will say “no”, everyone gets it. So if you trademark your name and tell Cobalt and General Motors not to use it as it is trademarked they just ignore you and do it anyway. In essence, if you are a GM dealer, GM is going to allow Cobalt to steal from you. Although you might say it is ok, it does not matter, I have news for you “it matters” when someone gains a monopoly and directs your consumers that you advertise for, to a website that will deliver a message that is all one sided.
Just to put a little humor in the situation type in Chevrolet dealers Dallas, every dealer website that comes up on the first page is built by Cobalt websites. Now if I was a Chevrolet dealer in Dallas and I was not in the top three, I would want to know why not. Who makes that determination? It all has to do with search engine optimization and when you have one website company building the same websites for everyone then you get the same results stacked on top of each other and then there is no competition. If they are all the same with the same message why would you visit multiple dealer websites, it would just be a waste of time. So essentially, taking out not only the competition between dealers but sending the same bland message to the consuming public. Which is what General Motors in all of their infinite wisdom wants. Here is more humor, Cobalt websites for a fee will implement a secondary pay per click campaign for you, meaning they will do sponsored search for terms they or the dealer deem relevant, so if you have let’s say three dealers all within 20 miles of each other with the same website, the same message, and the same pay per click campaign then what do you have? General Motors might say the same message, but what does that do for the dealer? But also what message is really conveyed to the consumer? They are all alike? No reason to go anywhere else? What makes one dealer unique from the other? In that competing pay per click campaign, who determines who is going to pay more, and what about when campaigns are focused on other dealers with the same makes and models and not the manufacture competition.
General Motors and most importantly the GM dealers need to take a real hard look at their online advertising and search placement. For more information or if you would like to debate this issue please feel free in contacting me direct.
About the Author: Frank Davis is a Director of Internet Sales and has over 10 years experience of automotive Internet sales and marketing.