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How Should I Work with Dealer Rating Sites? 
If I Tell More, Will I Sell More 
I am going to make my best case for why PPC is a total waste of money in the automobile industry, and I invite you, the dealerships, or PPC salespeople to join the fun and make your case. This should be some fun, let’s keep it clean, and professional. In the interest of full disclosure I of course sell SEO, in many ways a direct competitor for PPC marketing dollars. (Even though we don’t agree with the logic) We do feel dealerships should do some PPC, as well as SEO, the problem we see are so few dealerships invested in SEO because there isn’t immediate results. So in the sprit of the holidays, let’s get this rumble going!
PPC Is a Total Waste of Money
Yes that’s right I said it! Spending money on pay per click advertising is a waste for so many reasons. It has the staying power of a two year old newspaper ad. Although we do concede that targeted PPC can be quite effective, why on earth would anyone invest in something that will continually cost you money? Your cost per acquisition will always be there, and the second you stop paying for it, your customer will disappear. The fact is, even when PPC is executed perfectly, high quality ad copy, great converting landing pages and great follow up, you are still paying for every single click.
If dealerships can see that buying third party leads is a dead end, why can they not see PPC as the same thing? You get no long term marketing benefits for your investment, and depending on the market you may or may not even have a chance to close those leads you are paying upwards of $20.00 each for. We really want someone to make a compelling argument against this logic! In an era where dealerships are trying to cut costs and maximize their return on investment, how can paying for clicks possibly fit that business model? The sad thing is it still does for many dealerships.
Keep this in mind, in most markets you are bidding against yourself, OEMs are pouring piles of cash into online advertising and at least the big three all spend on PPC, why would you bid against yourself? It just doesn’t make sense, bidding against your local marketing group for the same customers? If you pull back and really look at PPC, your bidding against yourself by bidding against OEM’s, bidding against lead generation companies who want to sell you your own leads, and your competition all in the same market!
PPC Offers No Real Long Term Solution
Yes, that’s right PPC is a band aid, a temporary fix for lack of traffic to your dealership website. Google and other search engines are built to serve up the most relevant sites, so why isn’t your site coming up in the top position? It isn’t relevant, we don’t mean to poke fun, and are apprehensive to make such a blanket statement, but the fact is its true. It’s not really the dealerships fault, it’s the website providers and their misleading talk about how their sites will be great for SEO, dealerships believe it and even pay for “SEO” from their website providers.
A perfect example of this is Cobalt, (not to pick on them, there are plenty of other offenders) charged one of my clients for “seo services” for months, and never even bothered to customize the Meta descriptions and title tags. Within 3 months on our smallest package he had increased his organic traffic 300% and that hasn’t gone away. He has since stopped PPC advertising and diverted the money to SEO seeing similar increases consistently each month. The fact is, PPC is great for getting dealers all excited about “traffic” to their websites, but it doesn’t offer any real long term solution to the overall problem due to their lack of relevance. The important thing to know here is that if our client fired us tomorrow, he would still continue to receive that extra traffic, each and every month, generating more leads, and ultimately more sales. Let’s see PPC do that!
The ROI in PPC Pales in Comparison To SEO
The three letters driving any good dealership are ROI, we don’t disagree that PPC advertising can provide positive ROI. What we are saying is that it pales in comparison to the ROI a dealership will see with a good SEO service. Below we will explain.
Let’s say XYZ dealership is spending 2500 a month on PPC advertising, and generating maybe $5000 in positive revenue, now in our opinion that number is high, but we will, in the spirit of the holidays give PPC some credit. At the end of the year the dealership has made $60,000. (doubling their investment not bad!)
Now let’s say XYZ spend the same $2500 on SEO. For the first several months, the dealership wouldn’t see any results, and lets say perhaps they generate fewer leads, that said leads generated from SEO convert much better and maybe the dealership starts to make $2500 a month after month 3. At the end of year one, they will have made $22,500.
But, now let’s assume after one year you stop spending, PPC’s year two profits will be 0, while SEO will remain and bring you another $30,000. Year two the same and so on, you see a trend forming here? Although these numbers are somewhat arbitrary the point remains the same SEO offers long term increased profitability while PPC only offers ROI today. Turn off your marketing dollars, and SEO continues to run on empty while PPC is out of gas! (Like our car reference?) In the real world dealerships have limits on what they can spend and often times two solutions will have positive ROI’s but the key is looking long term.
OK PPC people bring it on!
Jeremy Hambly
SEO For Dealers
www.seofordealers.com
Tags: crm, internet marketing, online advertising, pay per click, PPC, sem, seo, websites
Dealers should at least do pay per click for the names of their competitors and their website addresses.
As an SEO consultant, I do agree with the long term ROI of organic SEO and the great “annuity” it offers for consumer direct leads. I’ve been an advocate for automotive microsites and SEO but many car dealers still are hooked on the instant gratification of PPC. It can be frustrating at times but you have to not drink your own Kool-Aid and address some practical truths.
But you are not representing one of the core the reasons why PPC is still needed. Consumer behavior dictates much of why PPC needs to be a part of car dealer marketing budgets.
For this example, a consumer is looking for a Honda Civic in New Jersey.
When you look at data from Google searches, consumers more often than not are typing in search phrases WITHOUT a geo-locator in their search like state, county or town. They are typing in very short phrases like “Honda Civic”, “Honda Civic Prices”, “Honda Civic Reviews” and “2009 Civic”.
Since these are national phrases, the third party lead collection sites like http://www.edmunds.com, Yahoo Autos and http://www.motortrend.com come up on Google page one. These third party lead collectors are optimized for every year make and model, unlike car dealer sites. They also have tremendous traffic which further supports their rankings.
Every day these third party lead collectors capture local buyer leads and sell them to dealers. The only practical short term way to get in front of consumers for broad phrases, without any geo-targets, is PPC. So, you can decide to buy leads or you can attempt to capture the local leads yourself.
It would take a significant investment in time and money to show on organically on Google page one for the search phrase “Honda Civic”. There are no Honda dealers shown in the first two pages (20 listings) of Google for that phrase. You will see all the major lead collector sites on those first two pages.
There are exceptions. I was able to get national Google Page 1 ranking for “Infiniti G37 Convertible” and “Infiniti G37” searches, but it would be very hard to get on Google page one for “Infiniti G35” or “Infiniti dealer”.
Secondly, you fail to mention that Google PPC can have a geo-based advertising radius so that if you decide to buy broad words, you can limit the radius to a practical driving area for potential buyers. If I only want to target Monmouth County residents, because my dealership is in that county, I can advertise to local car shoppers typing in the phrase “Honda Civic” or “Honda Civic Prices”.
This is not to say that PPC works for all dealers and marketing strategies. Dealers have to evaluate the costs and ROI for all lead sources; SEO and SEM. They need to compare the conversion rates for “broad search” leads versus long-tail searches like “Monmouth County Honda dealer”. If both methods are profitable and sell cars, both should be continued.
SEO should have a better ROI but you cannot capture all of potential buyers via SEO. You have to have more than one tool in the chest. There is a limit at what SEO can do in any one month. Doubling a SEO budget in any given month does not significantly change the lead flow in the same month.
Since dealers are often rewarded on monthly or quarterly goals, SEM may be needed to hit short term sales targets. Also, if you are trying to boost extended warranty sales PPC is very effective since consumers normally just type “Infiniti warranty” or “Infiniti extended warranty” into Google.
Yes, you can create a microsite to attract organic leads. I did that with http://www.infinitiwarranty.net and it is ranked #2 in the USA for that phrase but my client also gets highly qualified leads from buying a few selected warranty keywords in Google Adwords.
So, if you measure all advertsing costs there are many cases were the ROI of PPC, standing on its own, will be well worth the investment. The key is to help dealers measure the true ROI of all lead sources and make changes to PPC campaigns to make sure they are effective.
Long live SEO and SEM.
I agree you cannot capture all potential buyers, but what does?
Also I realize you can geo target PPC, I didn’t mention it because I thought most people already knew that, but that said, your right I should of mentioned that, the overall point is that regardless of whether you geo-target or not, ppc is by far and away worse for conversions, cpa, and roi. I agree you need both, that is just the reality of the situation, the problem is most dealers only do one, and thats ppc.
Just clarify this:
“ppc is by far and away worse for conversions, cpa, and roi. ”
Worst compared to print ads? radio? TV? direct mail? email blasts? Telemarketing?
How would you rank these various channels for ROI?
Hi all:
Mike DeCecco from Dealer.com here. I wanted to post some thoughts on PPC advertising. In our opinion, to not do any PPC is a very flawed strategy. Sure, we sell PPC, but think about it….. The worlds leading online retailers in every vertical imaginable all do tremendous amounts of PPC. Could they all be wrong ?
The most sound strategy a dealership can undertake is to be strong in both SEO and PPC. If you’re doing PPC at the dealership, it can be extremely cost effective and targeted if you’re using the right platform.
The immediacy of PPC is it’s perhaps strongest asset. I agree that it doesn’t provide serious long-term branding other than your ads continuing to appear as long as you’re paying, but that’s not the point.
If you’re running a special promotion and want the word out now and want to put your ads in your competitor’s marketplace now, then geo-targeted PPC based on sounds bidding architecture is incredibly powerful.
Of course you should have a strong SEO base and be paying for an advanced service, but no SEO service can get your message out in seconds to a targeted market and allow you to measure you’re results effectively.
With our system for example, you can build out a PPC campaign in minutes for your specials, put a budget behind it and have it launched on Google in literally less than 3 minutes. You can then measure every phone call, click through, and lead conversion for that specific campaign. This level of speed to market and measurability with SEO is not possible.
If you’re a dealer and you’re thinking about cutting advertising costs, drop some more print, cancel a few radio spots and, maybe a TV ad and take that money and invest in measureable media like PPC and watch you’re ROI grow dramatically.
In my opinion, the last thing any dealership should be doing is dropping their PPC spends. They should be creating a strong balance of managed SEO and targeted PPC.
Now, to the point about horrible conversions….
If your PPC service is not measuring the lead generating ability of every keyword they buy for you and bidding based on the actual effectiveness of the words, then find another company because you will see lower conversions because you’re blind bidding.
Your campaigns should also point to specific pages that are incredibly relevant to key terms… not just your homepage. If you’re campaigns are targeted for specific needs, and landing your customers on the right pages with multiple calls to action, specific phone tracking numbers, and strong shopping tools you’ll see some of the very high conversion rates many of our PPC clients enjoy.
Anyway, as a final thought…. PPC is not going away and it’s all about how you engage with it that will make the difference.
Mike DeCecco
Dir. Industry Relations
Dealer.com
miked@dealer.com
I agree with Mike, the biggest bluder I see in PPC Marketing specifically related to the automotive industry is the lack of landing pages designed to covert traffic and lower your cost per conversion. If a dealer’s willing to spend $45-50/lead from a 3rd party vendor, with proper geo-targeting, landing pages, good keyword research, and strong calls to action, it is very easy to get your conversion cost below that marker. Often, dealers also overlook the additional walk-in, phone-up’s that result from a PPC campaign. As noted, it is always wise to add a specific 1800 number to your landing page.
Secondly, PPC can be used to drive traffic on specific models from well outside a dealerships traditional direct trading area. Offering a page which would detail shipping rates and cost of transaction is a great way to draw in business from a far. Don’t forget, each of those landing pages, with proper SEO, should begin to climb the organic ladder contributing to a dealerships overall Internet marketing strategy.
Kijiji, Craigslist, supplement your strategy. Open your tool chest. IMO, Kijiji is one of the best sites to market used cars $10000 and under. At least in Canada. Recall that if you want to get a high ranking ad on the SERP, piggybacking on someone else’s qaulity score is a great way to do it. Oh and Kijiji is currently free!
IMO the social networking medium should also be farmed. Facebook’s ability to target market is unmatched. Were experimenting with PPC on FB but the results have been average. An individual creeping someone’s facebook profile will click on the PPC ad for a 2007 Pontiac G5 but it’s passive vs. Google seaches which is direct.
Shane Hambly
Web Solutions Specialist
Roy Speed Ross/eDealer
http://www.edealer.ca
shambly@royspeedross.com
first of all Hambly???? are we related>
also what dealer pays $50 a lead?
$50 a lead? If demand exceeds supply and they are qualifed why not? What’s qualified? Job info, home info, contact info, income info and SIN or Social Security of individuals who have been on the job at least 3 months and make a minimum of $1750/mo. if you buy 100 and close at 10% that’s $500 PVS. At 15% it would be $333 Per Vehicle Sold. It all depends on closing ratio. If your buying $20 leads and closing at 10% GREAT. A smart lead supplier will up their price to what the market will bear. Simple Economics. Business in Canada has slowed but not to the same extent as the US. Recall we have a centralized banking structure. http://www.carloanscanada.ca and http://www.findaloan.ca are currently at $45-$50/lead for new customers and we have a waiting list of dealers who would purchase leads if an existing dealer decided to cancel.
opps.. http://www.carloanscanada.com lol