Much of the discussion in automotive digital marketing is starting to center around Google AdWords and the quality of Website traffic that is being generated. Over the past decade, we have measured our results on Google AdWords by looking at cost per click (CPC), bounce rates, impression share and click through rates. These simple metrics worked great when cars were flying off the shelf.
Over the past few years, however, the quality of that traffic has deteriorated and the cost per sold unit has skyrocketed. The fact that every single dealership in your market is competing for the same set of eyeballs has not helped the situation. Now that sales have slowed down, it’s time to take a deeper look into those AdWords budgets.
Research has shown that around 80 percent of the Google AdWords traffic being driven to dealership Websites are people simply searching for the name of the dealership. People who would have searched you out anyway, so there is no need to pay for their click. Basically, it becomes an overpriced Yellow Pages directory for your dealership.
Now, add in the bot traffic and service traffic and you are left with very few sales opportunities from your AdWords budget. You can easily analyze what is being generated by putting a tracking system on your Website to monitor engagement and isolate bot traffic. You can use a call tracking service to score your phone calls as sales/service.
Once you start to analyze your AdWords traffic deeper, you will quickly realize that you are left with very few sales opportunities. The ones you do have are usually looking for the lowest price and they expect you to lose money on them when you sell them a vehicle. You’ve been told that you must be on Google. Google is the beall, end-all of digital marketing. The majority of most dealerships’ digital spend is with Google. You’ve been told that is where people go to shop for a car. What are you supposed to do?
The answer is right in front of you. Most of you are on it multiple times throughout the day: Facebook. When Facebook entered the marketplace, there was a lot of snake oil being sold. Vendors telling you they could increase sales for $500 to $1,000 a month by setting up a Facebook page, generating some “fans/ likes” and starting to post some cool engaging content. It was supposed to be a cheap and easy way of selling more cars.
I was one of the first vendors to jump on the bandwagon. I shifted my attention from direct mail to Facebook marketing. I spent eight years trying to find the right formula to help dealers sell more cars for less. I, along with the industry in general, approached this in the wrong way. Remember, nothing in life worth having is free or easy.
We changed everything we knew about marketing. We’ve even been told that you “don’t sell cars on social,” that you were supposed to post engaging content that may not even be related to your business. Vendors and dealers did this because they were trying to fight the ever-changing algorithms that Facebook implemented to reduce the amount of spam content their user base was exposed to. That, and they wanted to push marketers to a “payto-play” strategy so they could increase their bottom line.
Over the past year, many dealers have taken a different approach. Many have invested in “paid” Facebook ads and shifted large portions of their budgets over from Google to Facebook. Facebook released something called “Lead Gen” ads about a year ago. It finally gave us a way to generate large volumes of leads from paid ads.
These ads, combined with the right response mechanisms, showed us that these are real people looking to talk business about buying a car. Many of these people are not in-market when they see the ad on Facebook, giving the dealership first crack at the consumer’s business, not having to compete with every other dealer in town.
In February John Carlson, general manager at Frank Hyundai, spent $10,000 on paid Facebook advertising. Much of this budget was reallocated from Google AdWords. His dealership went from generating clicks with a low conversion and few new sales opportunities to more than 500 people text messaging them about buying a car. They have drastically increased sales and their overall gross on each unit sold. They are reaching customers in ways their competition isn’t. This gives them the advantage they need to dominate their market.
If you feel like it’s time to take a deeper look at your AdWords campaigns but don’t know where to start, email me at the address above for an AdWords spend analysis.