Notifications & Messages

Jared Hamilton
From: Jared Hamilton
Hey - It’s time to join the thousands of other dealer professionals on DrivingSales. Create an account so you can get full access to the articles, discussions and people that are shaping the future of the automotive industry.
×
John Clavadetscher

John Clavadetscher Chief Revenue Officer

Exclusive Blog Posts

10,000+ Cars Trucks and SUVs Listed for Sale on Driverbase

10,000+ Cars Trucks and SUVs Listed for Sale on Driverbase

Car shoppers can now search over 10,000 new certified and used vehicles on the Driverbase marketplace. In the last month we increased from…

Path of Exile: What is reduction and extra reduction?

Path of Exile: What is reduction and extra reduction?

Reducing this affix is rare in Path of Exile. Let’s take the bodyguard. When you have a bodyguard on your body, you are hit by 20% to reduce the dama…

Rock’s Rants: You Need Dispatch

Rock’s Rants: You Need Dispatch

Whenever I visit dealerships, I often see technicians standing around at the parts counter or waiting to talk with service advisors. This is a waste of you…

Automation, Speed, and Your Dealership Marketing

Automation, Speed, and Your Dealership Marketing

I recently sat down and chatted with AutoLeadStar CEO Aharon Horwitz and discussed how technology is improving the speed in which dealers can make…

4 Sales Lessons from Real Car Shoppers

4 Sales Lessons from Real Car Shoppers

I’ve worked with auto dealerships across the country and 99% of the time, when I ask what their primary goal is, the answer is increasing car sales. …

It’s Time to Address the 10,000-Ton Elephant in the Room

Why are you paying Google to drive traffic to your site?

The automotive industry wastes billions on paid search, social, and re-targeting to drive consumers to their own websites – and consumer behavior data suggests that people are increasingly avoiding these sites. The auto industry needs to resist the seductive lure of spending billions to drive consumers to their websites. Instead, they need to focus on where consumers spend their time and invest there while appreciating the conumers’ growing desire to invest their times in comprehensive online market places.

A Disparity Between Spend and Results

In 2017, digital automotive ad spend alone will hit nearly $10.7 billion -- with 45 percent, or about $4.8 billion, being sunk in paid search, and 48.7 percent, or about $5.2 billion, going to display.[1] It’s fair to assume that automotive OEMs, local dealers, and their agencies will spend more than $10 billion to drive consumers to their first-party websites. 

The auto industry is wasting a ton of money on advertising – actually, 10,000 tons. Here’s one big reason why: while agencies spend billions to drive consumers to their websites, traffic to these sites is decreasing as first-party sites do not meet the customer’s expectations.  For instance, according to comScore data, from May 2016 to May 2017, traffic to automotive manufacturer sites alone decreased by a whopping 28 percent. [2] In addition, comScore data indicates that:

  • Traffic to multiple national dealers’ sites over a similar period decreased by an average of 15 percent.[3]
  • Third-party automotive resource sites (marketplaces) such as Cars.com averaged 2.4 times the unique monthly visitors as automotive manufacturer sites.[4]

The $10 billion wasted to promote first-party website traffic looks even more grim when you realize that shoppers don’t spend much time on dealership and automotive sites, either. In fact, they spend 60 percent of their time on third-party sites and only 25 percent of their time on dealership/OEM sites combined.[5]  

To make matters even worse, advertisers risk spending their money on bogus sites or sites that will hurt their brand. As recently reported, Google is refunding businesses whose advertising dollars were spent on websites with fake traffic. In all, advertisers lose $6.5 billion to fraud, and tracking the value of their legitimate spend is complicated by a system that fails to be transparent.[6] The 10,000-ton Google elephant in the room is the $10 billion that automotive industry is wasting to drive traffic to first-party websites. And the industry needs to talk about the elephant or else continue wasting money. With a flat-to-down seasonally adjusted annual rate in 2017[7], OEMs and local dealers need to be hyper-vigilant about the effectiveness of their marketing or risk losing share to more advanced/aligned OEMs and local retailers. 

Why do automotive shoppers prefer third-party reference sites over first-party automotive sites? Well, two reasons stand out: 

Rising Consumer Digital Expectations

Consumers’ expectations of automotive sites are being influenced by their experiences on comprehensive marketplaces sites such as Amazon, Zillow, and Expedia. On these and many other market place sites, consumers have become accustomed to and demand:

  • Speed.
  • Trustworthiness.
  • A wide selection of easily searchable inventory.
  • Expert reviews as well as user-generated content.
  • A mobile-first experience.
  • An experience free from ad disruption – either free of ads completely or free of ads (such as pop-up ads) that get in the way of finding what consumers want to find.

Consumers continue to interact with non-automotive sites even as they research for an automotive purchase. All the sites they visit shape their expectations of their digital experience with automotive sites.    

Automotive Sites Come Up Short

Most dealerships and OEM sites still struggle to provide a complete, easy-to-navigate vehicle selection and an independent as well as crowdsourced reviews of the price, vehicle, dealership and sales staff. According to a DrivingSales white paper, Competing on Consumer Experience, “. . . consumers use online sources they consider to be the most trustworthy and objective. Three out of four shoppers reported using third-party car buying websites while shopping for their new car while substantially fewer used dealership websites.” The white paper cited these reasons for why consumers avoid dealership sites:

  • “They find them confusing and cluttered 

  • They don’t want to be ‘bugged’ if they submit a question or inquiry 

  • They feel information on 3rd party sites are more ‘trustworthy’ and complete” 


Being mobile-friendly is another trait that consumers have come to expect. According to Google, the average load time for mobile landing pages in general is 22 seconds – yet 53 percent of visitors abandon mobile sites that take more than 3 seconds to load[8]. Chances are your site is not fast enough for the mobile consumers. (At Cars.com, 59 percent of our traffic comes from mobile and we can help you reach those consumers no matter what device they’re using.) You should consider the mobile experience of your site before spending advertising dollars to drive consumers to your first-party site.

The real beneficiaries for the promotion of first-party traffic have been Google, Facebook, and their reseller agencies that promote such traffic.  For instance, Google recorded $25.7  billion in revenue for Q2 2017, and Facebook beat expectations for its most recent earnings report. Advertising fuels earnings for both companies. In Google’s case, advertising accounts for 87 percent of the company’s revenue, thanks partly to automotive dealers and OEMs pumping money to drive people to first-party websites that do not meet the consumer’s digital expectations.

How to Address the 10,000-Ton Elephant

To address the 10,000-ton elephant in the room, OEMs, dealers, and their agencies need to meet consumers where they are in their journey (rather than try to pull them to automotive websites) and understand what influences consumer’s decisions. I recently discussed in a blog post how the automotive industry needs to operate by a redefined four Ps of automotive marketing: product, price, place, and person. As I discussed, consumers have redefined place to mean not only the lot, but also all the digital destinations where they interact with your brand as they research their purchase.

We know from our own experience and data that the consumer’s purchase journey is varied and layered. Those research touchpoints include social media, reviews, OEM sites, industry trades, and third-party publishers such as Cars.com. Leading automotive OEMs and local auto retailers understand the perils of spending too much money and energy on driving traffic to first-party websites. Instead, they are trying to best promote their people, dealership, product, and vehicle price, on third- party marketplaces to get them to walk into the dealership. 

Finally, it is critical to understand and appreciate the differences in goals that your OEM or local auto retailer have against the car shoppers’ goals. As the DrivingSales white paper discusses, car shoppers want independent validation; a large, unbiased selection of inventory; and trust and transparency.

Understanding the 4 Ps and differences in your goals versus the consumer’s goals is key to addressing the 10,000-ton pound elephant in the room.

 

[1] eMarketer, US Automotive Industry StatPack 2017.

[2] comScore, based on an average of % Change Unique Visitors from June 2016 to June 2017 for carmax.com, enterprisecarsales.com, autonation.com, drivetime.com, offleaseonly.com, and hertzcarsales.com.

[3] comScore, based on an average of % Change Unique Visitors from June 2016 to June 2017 for carmax.com, enterprisecarsales.com, autonation.com, drivetime.com, offleaseonly.com, and hertzcarsales.com.

[4] comScore, based on Automotive Resource Sites Total UVs and Automotive Manufacturer Sites Total UVs from May 2016 to May 2017.

[5] DrivingSales, Key Insights into Understanding the 2016 Car Buyer’s Journey, May 17, 2016.

[6] Business Insider, Google’s refunds point to two of the biggest problems in ad tech, Aug 28, 2017.

[7] Forbes, Why the Decline in U.S. Auto Sales May be Less Painful Than it Seems for Automakers, June 27, 2017.

[8] Think with Google, Find out how you stack up to new industry benchmarks for mobile page speed, February 2017.

Chip Dorman

What a complete load of BS John. This is exactly what automotive vendors don't need. For a company that's afraid to give dealer's their data you've got some nerve. One of the biggest wastes in dealer's budgets is Cars.com. If any dealer would like me to show them exactly how bad Cars.com performance is, I'll be happy to show them.

What's missing from your article is context. There's a time and a place for purchasing traffic, and it's obvious you have no clue about how to do it and are only interested in promoting your company's overpriced service.

Chris K Leslie

Confirmation bias is strong in this one... 

Lezlie Brannan

Better to address the rise of your 3rd party competitors (ie, CarGurus) than try to take on Google and Facebook. And how did CarGurus rise to be IMHO the strongest 3rd party provider? SEM and SEO. Nice try. I can show you legit traffic increases for our website for the past 7 years, and I can also show you legit traffic decreases of traffic TO our website from Cars.com.

Brad Paschal

Id rather brand my dealership than brand a third party site. If dealers get innovative they can take back their customers and brand their dealerships.

Shean Kirin

When I see articles like this, I sense a Wolf in Sheep's clothing. This is a vendor trying hard to make their product look good by making Google look bad. That is simply poor advice. Here is some advice to Dealers from a vendor who manages advertising budgets for dealers around the country..

  1. Always look at the person writing the article. They are using data to attempt to make themselves look good.
    1. Controversy sells. They will state controversial things in order to "prove" their point. An example would be the statement around 4 years ago where this same vendor put together a case study showing that 20+% of a dealerships traffic came from their website. That study was based upon one company and didn't include any comparison data from a store that didn't use their product. That study contained manipulated data similar to this. We had a store who did not use said vendor and had the same result (20% of their traffic was on this vendor's website prior to coming to our stores site). Our takeaway was - Consumers browse on these third party sites and then look for a dealer when they are ready to buy. Be on Google when they are ready to buy.
  2. When you see these articles, find the relevant information for you. Examples from this article-
    1. Site Speed Matters - A LOT. Do a Google Site Speed test. Look at Mobile and Desktop.  Too many dealer websites are dreadfully slow. All the scripts you have been adding have slowed down the website. When your site is slow, challenge your vendor to speed it up. There are DEFINITELY vendors who perform better than others, however ALL of them can make speed a priority.
    2. Mobile First - What does your site look like on Mobile? Eliminate distractions on the site so that browsing is easy. If you ask, your website vendor can probably help you with this. One of your top priorities is easy browsing of inventory. Another is easy contact to the dealership. We saw a mobile website where click to call was impossible to see. A vendor switch proved an 8x improvement in phone calls.
    3. Your Site Layout Matters - It IS your #1 Showroom. You should treat it like that. Do you let your showroom look like crap? Why would you let your website look bad? Put the time into it because your customers are going there.
  3. I am not saying that Third Parties are bad. I am happy to say that we went from removing the vendor who wrote this article from our advertising budgets around 4 years ago to recommending their product now, albeit in a smaller fashion than they would like.  We generally choose them over one of their long time competitors because data has proven that this vendor now generates leads. Their main competitor seems to fall behind in this area.
  4. A well rounded strategy would include:
    1. Manage your site. You should pay VERY CLOSE ATTENTION TO THIS.
    2. SEM/SEO - Who you choose matters (There are lots of good choices there). There are some VERY poor choices here that are some of your manufacturer approved vendors. Don't just use the website SEM/SEO. Shop and learn first.
    3. Third parties - The ones who have been paying attention have improved their products. There are some very good choices here. For example - The article writer HAS improved their product as time has changed. Saying they are more important than Google is straight BS.

I hope this helps people see through the smoke & mirrors. I don't pipe in often, however I REALLY don't like when I see articles like this that will directly negatively impact dealers. Our business is hard enough without the bad advice.

Cheers!

 Unlock all of the community & features  Join Now