In my weekly visits with automotive dealerships, the largest area of waste in digital marketing spending is with paid search. Unfortunately, dealers have been sold on the fact that paid search is the answer to every digital marketing need, and that is far from the truth. Whether it be for branding, new cars, used cars, or even purchasing the names of their competitors, dealers seem willing to essentially write a blank check to their paid search agency and trust the agency to make smart keyword purchases. The key to success with paid search is close inspection of the campaigns, keywords, and downstream performance of the website traffic.
For dealerships who may be reading this article, and are wondering how their monthly paid search spending is performing, here are four (4) easy questions to ask their agency to begin to peel back the layers:
1. What is our paid search strategy? – This is a great place to start, asking the agency to broadly outline the overall strategy of the individual campaigns. In my mind, there are five (5) categories I see agencies focusing on, including brand, vehicle make with geographic terms, new vehicles, used vehicles, and fixed operations. Of these categories, the one that likely contains the largest amount of wasted spending is used vehicles. In my opinion, using paid search to market used vehicles is a great way to waste money, especially for off-makes. That is why the large third-party classifieds sites (Autotrader, Cars.com, CarGurus, etc.) exist. These sites can more cost-effectively market your used vehicles at a much lower cost per vehicle detail page (VDP) as well as a lower cost per lead when compared to paid search.
2. How much of my paid search spending actually goes to Google or Bing? – Many dealers mistakenly assume that if they give the agency $10,000 per month for paid search, most or all of this money is going to Google or Bing. If the agency doesn’t clarify on their monthly invoice, the dealership should demand this granularity. The agency will charge either a variable percentage or a flat rate each month for running the paid search campaigns. I’ve seen rates ranging anywhere from 15% to 100% of the actual paid search budget that is supposed to be going to Google or Bing. I recommend two (2) courses of action to maintain transparency. Dealers should either ask the agency to break out this percentage on the invoice each month, or simply ask the agency to bill their credit card directly for the Google and Bing charges. The latter approach ensures that the dealership will always have clarity on how much they are being charged for agency fees.
3. What were my most expensive paid keywords last month? – The old saying “The Devil is in the Details,” could not be more appropriate in the context of paid search. Do not allow the agency to simply show you rolled up performance metrics for cost-per-click, click-throughs, phone calls, etc. Instead, ask to see the actual keywords that were purchased, along with the cost and performance of each keyword. Once you begin looking at keywords, I would want to know which ones were the most expensive, which ones performed the best and worst, and how well the paid keywords match the actual shoppers’ search queries. This type of inspection will help discover poor performing keywords that need to be eliminated, while also finding top-performing keywords that the dealership should make sure are properly funded.
4. What do you mean by “Engagement” or “Conversion”? – Unfortunately, these are two words that tend to have very different meanings across agencies and vendors. If a dealership hears these words thrown around, they need to make sure they ask for definitions. The word “engagement” should truly measure a shopper interacting with a page, vs. simply landing on a page. For instance, VDP visits are not engagements, but scrolling through photo carousels or playing a video are. The same concept applies to the word “conversion,” which shouldequate to the dealership getting in contact with a shopper. Unfortunately, I’ve seen too many agencies mischaracterize search results page (SRP) visits or VDP visits as conversions. The true definition for conversion should be phone calls, email lead forms, chats, texts, trade-in-leads, etc.
My goal is to help the dealership better understand the questions to ask to properly frame up the structure of the monthly agency reviews. If the agency is uncomfortable with this discussion, then run in the opposite direction! The agency should be educating the dealer along the way, to make them a more informed and intelligent buyer of digital marketing. The dealership needs to understand the strategy, dive into the details, and have full clarity on the fee structure in order to partner with the agency on measuring success.
If you are an automotive retailer, let us help you find and eliminate the wasted spending in your digital marketing investments. We can help you greatly improve your return on ad spend and gain more transparency with your digital marketing investments.
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