CDK's purchase of Auto/Mate may create a major disruption in the dealer management system (DMS) industry. Here is our take. DOWNLOAD
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!
SEO For Dealers