Welcome to DealerRefresh Forums!

If this is your first visit, be sure to check out the FAQ by clicking thelink above. You may have to Register before you can post: click the register link above to proceed. To start viewing messages, select the forum that you want to visit from the selection below.

Does SEM work? Not according to this stinging indictment.

Discussion in 'Online Dealership Marketing Best Practices' started by Ed Brooks, Mar 14, 2013.

  1. Ed Brooks

    Ed Brooks Sr. Refresher

    First Name:
    Ed
    Company:
    vAuto - 402.427.0157
    Twitter:
    VelocitySales
    Joined:
    Jan 15, 2010
    Posts
    633
    Likes Received:
    270
  2. ddavis

    ddavis Sr. Refresher

    First Name:
    Doug
    Company:
    Retired
    Joined:
    Jun 28, 2011
    Posts
    1,464
    Likes Received:
    465
    Location:
    Arlington, Texas
    Ed, great article. I put a link to the study that Dataium did for Cars.com on here before. It came to many of the same conclusions. Note that it says that the average dealer is spending 55% of their internet budget on search. This is a subject that many don't seem to want to talk about. To Read the study click here.
  3. Alex Snyder

    Alex Snyder Administrator Staff Member

    First Name:
    Alex
    Company:
    DealerRefresh
    Twitter:
    axsnyder
    Joined:
    May 1, 2006
    Posts
    1,845
    Likes Received:
    343
    Location:
    Vermont
    A couple of things:

    1. eBay is an enigma. To try to run your dealership off of eBay practices is not advisable.
    2. With a nationally known brand name your advertising needs are more about branding than specifics.
    3. With a nationally well known name and great reputation you are a destination that people don't need to search for. You are the search engine!

    I'm not going to deny that a diverse portfolio is always the key to good investing and that applies to marketing as well. But if you're not eBay, don't try to be eBay ;)

    Thanks for sparking the conversation Ed - this may turn into a lot of fun.
  4. Ed Brooks

    Ed Brooks Sr. Refresher

    First Name:
    Ed
    Company:
    vAuto - 402.427.0157
    Twitter:
    VelocitySales
    Joined:
    Jan 15, 2010
    Posts
    633
    Likes Received:
    270
    eBay is a completely different animal - agreed. But studies from Cars.com, Dataium, AutoTrader.com, Polk, etc. all suggest that dealers at least reevaluate their SEM money when it is spent on Branded Keywords - "Billy Bob's Ford" rather "West Bumblefudge Ford".

    All the data suggests that a reevaluation is in order.
  5. jgreen0909

    jgreen0909 Noob

    First Name:
    Jeffrey
    Company:
    VinSolutions
    Twitter:
    jgreen0909
    Joined:
    Jun 23, 2011
    Posts
    2
    Likes Received:
    1
    Great article. Clearly, not every business is an "Ebay" however, If you are properly optimizing your website and regularly producing timely relevant content, your organic search results will be sufficient enough that you wouldn't have to spend significant ad dollars for your brand specific keywords. There is a place in your marketing mix for that, but it should not be a significant investment. Paid ads are best used for expanding the reach of your brand beyond the basics. Use paid for special events, promoting smaller aspects of your business that you are not as well known for. Of course, none of this matters if you're not effectively measuring the return on your advertising dollars.
    • Like Like x 1
  6. ddavis

    ddavis Sr. Refresher

    First Name:
    Doug
    Company:
    Retired
    Joined:
    Jun 28, 2011
    Posts
    1,464
    Likes Received:
    465
    Location:
    Arlington, Texas
    I'm sure this would be more "fun" if it was on one of the other websites where the vendors out number the dealers by 10:1 and their participation (self promotion) is encouraged.

    Jeffrey, good points and glad to see your participation.
    • Like Like x 2
  7. Adam Ross

    Adam Ross Noob

    First Name:
    Adam
    Company:
    CarbizAdam
    Twitter:
    CarbizAdam
    Joined:
    Oct 23, 2011
    Posts
    10
    Likes Received:
    0
    Location:
    Oakland, NJ
    Good discusion, Ed. In defense of AdWords, Ebay can blame Google all they'd like, but when you don't differentiate your campaigns, you're destined to fail. Don't blame the medium, blame the one placing the ads. They were bidding on keywords that they already ranked for organically, not using AdWords to expand their reach. Check out this article that explains WHY Ebay failed, over and over again, at AdWords. "Historically, eBay’s approach has been to bid on pretty much every keyword possible, with no targeting whatsoever" How Not to Run a PPC Campaign, Inspired by eBay?s AdWords #Fail | Search Engine Journal

    From "The UK's Daily Telegraph" - "The eBay study found that most people who clicked through the advertised links were loyal customers who would have come to their website anyway." This is what dealerships used to tell me was the reason they didn't need to buy leads, or advertise online. The "Anyway argument" opens the door for your competition to steal away your loyal organic followers. It's also, for dealerships, almost impossible to accurately measure. eBay study dismisses value of advertising on Google - Telegraph

    Maybe somebody at Google should have worked closer with them, considering that they were spending millions monthly on AdWords?
  8. JoePistell

    JoePistell Super Moderator

    First Name:
    Joe
    Company:
    Dealer.com
    Twitter:
    JoePistell
    Joined:
    Apr 7, 2009
    Posts
    2,883
    Likes Received:
    850
    Location:
    Vermont
    I didn't read the article and I already know drawing conclusions from an ebay study and applying it to a local Landscaping Business is simply failed science.

    ...Likewize, so goes the loose connections to our market place.



    (I can't help but stirr the pot!! ;-)
  9. JoePistell

    JoePistell Super Moderator

    First Name:
    Joe
    Company:
    Dealer.com
    Twitter:
    JoePistell
    Joined:
    Apr 7, 2009
    Posts
    2,883
    Likes Received:
    850
    Location:
    Vermont
    I know LOTS of smart people making BONE HEADED decisions because the "pied pipers song of big data".

    The Larger, wider and deeper the data set, the more critical becomes CONTEXT.




    p.s. I still haven't read the article ;-)
  10. Ed Brooks

    Ed Brooks Sr. Refresher

    First Name:
    Ed
    Company:
    vAuto - 402.427.0157
    Twitter:
    VelocitySales
    Joined:
    Jan 15, 2010
    Posts
    633
    Likes Received:
    270
    Wow, Joe! So many obscure and unrelated references. Big Data. Landscaping Businesses. I'm assuming that you have started smoking SOMETHING since the move to Vermont. I look forward to your insights AFTER you read the article. :)
  11. Eley Duke

    Eley Duke Sr. Refresher

    First Name:
    Eley
    Company:
    Duke Automotive
    Twitter:
    eleyduke
    Joined:
    Nov 30, 2009
    Posts
    438
    Likes Received:
    230
    So, who's tested this out? I'd be interested in hearing from dealers and what results they found if they reduced their SEM and saw any change, or if they put it to other forms of online, such as a market place, and saw any change. Our SEM was turned off for 8 days in the end of Nov and we saw little traffic change.

    If Dataium did a study on 20 million car choppers per month, I think that's a significant sample size. The info from Cars is impressive, if only 6% of dealer web site traffic is coming from SEM, and only 1% result in a lead, we might be wise to rethink and test this. I am in a extremely competitive market for Chevy, maybe I am wasting my new car digital money when I could be putting it somewhere with a better ROI.

    I'd like to hear some dealers views on this and what they are experienced.
    • Like Like x 3
  12. ddavis

    ddavis Sr. Refresher

    First Name:
    Doug
    Company:
    Retired
    Joined:
    Jun 28, 2011
    Posts
    1,464
    Likes Received:
    465
    Location:
    Arlington, Texas
    Eley, my closest competitor, in Dallas, stopped all of his display advertising and put all of his money in SEM. He was spending 50% more than my entire internet budget. He had this idea that he could drive all of the traffic to his website and not be competitive with his pricing. His business went into the tank and he is no longer the GM of that store. I know there were other issues, but this didn't help.
    • Like Like x 1
  13. csabatka1

    csabatka1 Refresher

    First Name:
    Chad
    Company:
    Anderson Auto Group
    Joined:
    Jan 7, 2013
    Posts
    101
    Likes Received:
    44
    In Aug-mid Jan I ran a decent manual SEM campaign. 3 markets, St. Joseph, MO, Lincoln, NE, and Grand Island, NE. We have Ford, Lincoln at all locations, Kia at St. Joe and GI, and Mazda and Pre-owned store in Lincoln. I set up campaigns for new and pre-owned in each market.

    What I found was:
    Lincoln market (our biggest) was cheapest PPC and users searched more new vehicle search terms and very generic (new ford dealership, new f-150, etc.)
    St. Joseph market was searching more pre-owned and very specific sets of keywords (ex. used Ford F-150 for sale in St. Joe)
    Grand Island market was nearly 1.5x cost PPC over Lincoln and users search a mixed of new and pre-owned.

    Conclusions From Analytics:
    Depends on you unique market if SEM approach is best. Our markets showed different levels results and I cannot track exact sales or leads on SEM traffic, I can only do a comparison traffic to sold or website lead chart and website solds and leads trended up with the the search engine increased traffic. Website conversion rate and website solds remained consistent (within 2% of previous month). With that data I can say or assume sales increased based on increased traffic, due to SEM - to what degree, it is not measurable.

    Looking at the Total Search Traffic column you can say that it appears the traffic remained somewhat consistent with a small bump in July/Aug. But if you take out monthly trends and compare it previous year, we saw substantial increase in total search engine traffic over the previous year. SEM took away from some Organic visitors, but still show increased in total shoppers over previous year.

    From what we experienced we decided to go to an all or nothing managed SEM approach with Haystak in March as an AutoTrader replacement. This will be able to give us better numbers and stats of if a SEM approach works for us. Does this really work? We will see within a few months. We didn't stop or tv, direct mail, or other marketing avenues, just took AutoTrader out of equation and inserted paid SEM. All-in approach is never good, we still wanted a good mix of marketing avenues.



    Analytics (we increased budget in late Oct):
    [TABLE="class: grid, width: 700, align: left"]
    [TR]
    [TD]Month[/TD]
    [TD]Paid Visitor Total[/TD]
    [TD]Organic Search Traffic[/TD]
    [TD]Total Search Traffic[/TD]
    [TD]Search Traffic Increase Over Previous Year[/TD]
    [/TR]
    [TR]
    [TD]May[/TD]
    [TD]0[/TD]
    [TD]9,300[/TD]
    [TD]9,300[/TD]
    [TD]2,661[/TD]
    [/TR]
    [TR]
    [TD]June[/TD]
    [TD]0[/TD]
    [TD]11,864[/TD]
    [TD]11,864[/TD]
    [TD]4,913[/TD]
    [/TR]
    [TR]
    [TD]July[/TD]
    [TD]0[/TD]
    [TD]13,189[/TD]
    [TD]13,189[/TD]
    [TD]4,924[/TD]
    [/TR]
    [TR]
    [TD]Aug (28 days paid)[/TD]
    [TD]1,158[/TD]
    [TD]12,868[/TD]
    [TD]14,026[/TD]
    [TD]6,246[/TD]
    [/TR]
    [TR]
    [TD]Sept[/TD]
    [TD]1,253[/TD]
    [TD]10,560[/TD]
    [TD]11,813[/TD]
    [TD]6,801[/TD]
    [/TR]
    [TR]
    [TD]Oct[/TD]
    [TD]1,723[/TD]
    [TD]10,951[/TD]
    [TD]12,674[/TD]
    [TD]6,400[/TD]
    [/TR]
    [TR]
    [TD]Nov[/TD]
    [TD]3,369[/TD]
    [TD]8,362[/TD]
    [TD]11,731[/TD]
    [TD]6,032[/TD]
    [/TR]
    [TR]
    [TD]Dec[/TD]
    [TD]4,391[/TD]
    [TD]7,991[/TD]
    [TD]12,382[/TD]
    [TD]6,577[/TD]
    [/TR]
    [TR]
    [TD]Jan (12 days paid)[/TD]
    [TD]2,600[/TD]
    [TD]9,761[/TD]
    [TD]12,361[/TD]
    [TD]4,352[/TD]
    [/TR]
    [TR]
    [TD]Feb[/TD]
    [TD]0[/TD]
    [TD]10,079[/TD]
    [TD]10,079[/TD]
    [TD]3,587[/TD]
    [/TR]
    [/TABLE]
  14. jscole86

    jscole86 Getting Refreshed

    First Name:
    Josh
    Company:
    Huebner Chevrolet Subaru
    Twitter:
    jscole86
    Joined:
    Mar 2, 2011
    Posts
    79
    Likes Received:
    41
    Location:
    NE Ohio
    This past Tuesday, I sat in on a webinar that Brian Pasch did that was called "Becoming VDP Factories". We've known for quite a while that Vehicle Detail Page views are one of the most important metrics to measure for our 3rd party partners like Autotrader and Cars.com, and there is a direct correlation to VDP views and sales (assuming the sales process is good).

    Next to a phone call / email / chat, the most important thing you want from your website is to maximize the number of vehicle detail pages that are looked at. What I learned from this webinar is how to look at the % of visits that resulted in a vehicle detail page view, and look at it from each source, including your SEM spend. I assume it's different for each dealership, but if you spend $1,000 on SEM and get 500 visitors, what percentage of them viewed a VDP- 30%, 60%? What was your cost to have that visitor view the VDP aka cost per VDP?

    IMO this is how we need to start evaluating our SEM spend. Anyone else sit in on this webinar?
    • Like Like x 1
  15. ddavis

    ddavis Sr. Refresher

    First Name:
    Doug
    Company:
    Retired
    Joined:
    Jun 28, 2011
    Posts
    1,464
    Likes Received:
    465
    Location:
    Arlington, Texas
    I would be interested in how this effected your lead count. According to the Dataium study, traffic coming off of cars.com (assume it would be the same for AutoTrader) are much more likely to submit a lead.
    What is your internet budget compared to the total advertising budget?
    Last edited: Mar 17, 2013
  16. JoePistell

    JoePistell Super Moderator

    First Name:
    Joe
    Company:
    Dealer.com
    Twitter:
    JoePistell
    Joined:
    Apr 7, 2009
    Posts
    2,883
    Likes Received:
    850
    Location:
    Vermont

    Geez Ed, the FIRST PARAGRAPH in the study, the CONTEXT is established:
    "We find that new and infrequent users are positively influenced by ads
    but that existing loyal users whose purchasing behavior is not influenced
    by paid search account for most of the advertising expenses, resulting in average
    returns that are negative.
    We discuss substitution to other channels and implications for
    advertising decisions in large firms."

    http://conference.nber.org/confer/2013/EoDs13/Tadelis.pdf


    Ed,
    This weed smokin' tree huggin Vermonter is a master at marketing. Marketing is strategy. It's a chess match. EVERYTHING in chess is context. World class marketing types are skilled at spinning data to create pretext*.

    SUMMARY: Without reading it, looking at the business profiles alone, I knew moving the ebay evaluation was un-related to our industry (parts and service traffic not incl'd).

    Now... Off to Stowe!
    Grab a snow board, my growler of VT craft beer and where's that bag of organic weed? ;-)
    stowe-skiing-snowboarding.jpg

    Ed, Meet you at the base of Stowe for a brew at the http://www.matterhornbar.com/



    *pretext[ˈpriːtɛkst]n1. a fictitious reason given in order to conceal the real one

    http://www.thefreedictionary.com/pretext
  17. Ed Brooks

    Ed Brooks Sr. Refresher

    First Name:
    Ed
    Company:
    vAuto - 402.427.0157
    Twitter:
    VelocitySales
    Joined:
    Jan 15, 2010
    Posts
    633
    Likes Received:
    270
    If I read this correctly, your PRETEXT for not getting getting involved in a national discussion on revolving around the CONCEPT of whether branded-keyword SEM does nothing more than cannibalize your own SEO results seems to be the CONCEIT* that the automotive vertical is completely different from, and unrelated to, the larger marketing community.

    I don't dispute your position as the Master of Marketing - I even voted for you to be Pope of Interactive at last week's conclave. I thought you had more knowledge than Francis. Enjoy the High-Quality Vermont Hydroponics, dude.

    *conceit [kən-ˈsēt]n (1) : a result of mental activity : thought (2) : individual opinion
  18. JoePistell

    JoePistell Super Moderator

    First Name:
    Joe
    Company:
    Dealer.com
    Twitter:
    JoePistell
    Joined:
    Apr 7, 2009
    Posts
    2,883
    Likes Received:
    850
    Location:
    Vermont
    haha, ok, all wordy hosersh*t aside, heres my $0.02

    The study's abstract clearly states



    1. [*=1|left]"...We find that new and infrequent users are positively influenced by ads"
      [*=1|left]"...but that existing loyal users whose purchasing behavior is not influenced by paid search account for most of the advertising expenses, resulting in average returns that are negative."

    Ebays business is not our business, Car dealers and ebay have little incommon.



    1. [*=left]Ebay has a few million products for sale. You can buy ski passes, Shoe laces, car manuals, a TV, carpets, dry goods, real estate, antique cars, a vacation, etc... eBay loyalists know that ebay is it's own marketplace with no equal in the world.... its a destination all unto itself.
      [*=left] Car dealers website shoppers come by once every 3-6 years & they only want to look at cars.


    The Shopper dynamics could not be further apart. Applying lessons learned from ebay and applying it to car dealers has the potential to create incorrect conclusions.

    Last edited: Mar 17, 2013
  19. JoePistell

    JoePistell Super Moderator

    First Name:
    Joe
    Company:
    Dealer.com
    Twitter:
    JoePistell
    Joined:
    Apr 7, 2009
    Posts
    2,883
    Likes Received:
    850
    Location:
    Vermont
    Ed,

    Repeat visitors are a great thing for car dealers. From my 20,000+ surveys at delivery, one of the hallmarks of a buyer is multiple visits to the dealers website.

    Funny how this metric was the where the low ROI came from. It just goes to show how different the 2 business models are.
  20. csabatka1

    csabatka1 Refresher

    First Name:
    Chad
    Company:
    Anderson Auto Group
    Joined:
    Jan 7, 2013
    Posts
    101
    Likes Received:
    44
    Pretty easy to do this within Google Analytics. The link below gives you the steps needed to do this sort of tracking within Google Analytics. Set up your Google Adwords or Bing Ads to use Campaign URL tracking. Then within your reporting in Google Analytics you can track PPC visitors and view the content/pages they visited by using the Advanced Segment filter in the reports. Looking at the Content Report you can search for a portion of your VDP URL and view visitors of VDP pages only based off your PPC campaigns.

    Google Analytics PPC Conversion Tracking

Share This Page