News

Google met with top automotive dealers and manufacturers at the 2011 NADA Convention in San Francisco this week to introduce their new lead generation model for search, which one insider called “Dealer Preference”.  This is a new strategy for their popular Google Adwords software.

The new paid automotive advertising model by Google would create special automotive ads which are designed to generate calls or leads, which will be sold to the highest bidder.  This is a game changer in my mind but people at the meeting said that dealer response was very mild.

Google Automotive Leads

This model is new to the automotive industry but not new to other verticals like Mortgages. You can see from the screen shot above which is highlighted in red, Google has created a special new pink bar for ads that it creates for lead capture and places them ABOVE normal Adwords ads.  When you click on that link, this is what you will see:

The position of this page is sold to the highest bidder, I assume.  Details on the Dealer Preference advertising is forthcoming in a second post.

This is a game changer for the automotive advertising industry.  If Google starts to become a middle-man in automotive price advertising and comparisons, a whole new strategy will need to be considered.  It still will have to be seen if this increases clicks on paid ads.

Google Changes Automotive Advertising Again

This new features does a few things:

1. It pushes other paid ads lower on the right sidebar.
2. It pushes organic search results down so positions 1-3 become even more valuable
3. Dealers that have been ignoring Adwords will need to get in the game and test things.

The idea that Google has in mind is that if a consumer types in “Used Honda Miami” it will display its OWN lead collection ad and show cars or sales based on participating dealers.

What is your reaction?  Do you have some additional information from NADA to share?

I encourage dealers to create a process in your dealership to conduct a search on your dealership name each week to see if anyone is purchasing their business name in an Google Adwords competitive attack. Adwords is a fast and efficient way for competitors and third parties to prey on the brand equity and awareness that dealers have created through traditional media investments.  We have discussed this before in regards to POD Score.

I’d like to show two examples that I found this week that just defy logic and good business sense. The first example is Tier 2 advertising groups that buy the dealership name as part of their Adwords campaign. I am against having your regional ad group use your name in an Adwords campaign because those leads can go to another store.

Now if the agency that is operating the Adwords campaign is sloppy, they are buying any search phrases that contain the word “Toyota”. It is a simple task to add a “negative keyword” to their list which would be your name. So if you see your regional OEM ad group (tier 2) ask them to omit your business name from their campaign.

Open Road BMW

In New Jersey, the competition is very strong for BMW sales and in the example above, the Tri-State BMW ad group is running ads on Open Road BMW’s business name. I can guarantee you that this brand attack is generating leads for other BMW dealers in the state that are just 25 miles away. This is sloppy digital marketing from the Tier 2 agency and of course this lowers their direct website leads.

I think we all can agree that since the dealers name is the #1 organic search phrase that drives traffic to their website, this dealer does NOT need their Tier 2 ad agency to get in the middle of the consumer and their website.  This is in reference to using their multi-million dollar brand name.  The Tier 2 agency can buy all generic keywords they want to generate additional leads.

Edmunds.com Lacks Good Judgment

The DealerRefesh community has called Edmunds out in the past about buying car dealers franchise names.  Edmunds is once again running Google Adwords campaigns that drive consumers to lead capture pages using a dealer’s name. These leads are then sold to the dealer (if they are buying leads) and their nearest competitors.

Is Edmunds dealer centric or are they poaching on car dealer’s brand equity? You decide.

Would you like Edmunds to be using your trade name to generate leads for your competitors like in these examples below?

A well-tuned Google Adwords (PPC) campaign is extremely effective in generating car sales leads. Pay per click advertising, when combined with a good landing page, can deliver an excellent ROI. Google display and banner ads, even when they are not clicked, can also increase brand awareness in your local market. If you are not using Google Adwords, you are making your competitors very happy.

During difficult economic times, everyone is evaluating their spending, so I thought I would comment on what I have observed in September and October managing dealer SEM campaigns. In the past month we have seen the most volatile sessions in the history of the stock market. We have seen great companies collapse and other tossed away like dirty rags. It’s a scary time for consumers and for car dealers. This fear is manifesting itself in consumer click behavior.

For car dealers, PPC beats the pants off a full page ad in a local paper. It has more quantifiable results than radio or TV. Many of my car dealer clients have pulled out of the typical Sunday ad section. The money spent on a full page newspaper ad in New Jersey may cost around $2,000 – $3,000 depending on the paper and the results are very hard to track. That same investment in PPC would yield traceable sales results and help to develop your Internet cost per new retail sale.

Economy is Changing CPC rates

In the past month, my automotive clients have actually seen an increase in their costs per click (CPC) and a decrease in conversion. Bids for popular keywords have risen about 20%. My guess is that more car dealers are shifting the ad spending to the Internet. It may also be that dealers are more desperate and throwing money at the Internet without a true digital marketing plan. The costs per click for some keywords are becoming absurd.

In this economy there are more window shoppers than buyers. The data that I am seeing would indicate that dealers should test specific PPC ads vs. more general PPC ads. Dealers should also test different messaging for used cars since used car sales are on the rise.  With CPC rates rising, its important that your ads don’t attract unqualified buyers.

For example, a Google ad that says “Ultimate BMW Car Sale” may generate a lot of clicks and costs but few leads. In this economy, I would suggest that you test a general ad with an ad that is more specific. A specific ad would be “08 BMW X5 $450/m”. The idea is that if someone could only afford a payment of $300 a month, they will not be clicking on your ad and wasting your money.  You can repeat this type of ad test for each model you sell and make sure that ad goes to a model specific landing page.

Free Offers Can Burn Cash

We manage the SEM campaign for an award winning Australian winery. Mollydooker winery tested a free shipping offer on Google this week and had to pull it after 2 days. The ad’s curb appeal was great and generated double the amount of clicks, but the offer resulted in very few purchases.

In this case, I think that people are cutting back on non-essentials. They “act” like they may buy but in the end they are just shopping.  In the Mollydooker example, I get the feeling that consumers are deciding to buy a few bottles of wine locally compared to buying a full case online. When things are great, people don’t mind stocking up on good wine. Today, when cash flow is tight, even free shipping is not enough to get their wallets open.

SEM is actually achieving excellent click rates in this crisis, but the ”offer” should be refined to compensate for the fact that there are more tire kickers surfing teh Internet than those who are ready to buy.  To run an effective Google PPC campaign there should be one standard operating procedure: test and test again. As long as you are testing your ads you will avoid spending good money on bad ideas.   Don’t start a PPC campaign and let it run unsupervised, it could be costing you more than you realize.