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Are Dealers Spending Too Much On Paid Search?

ed.brooks

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Jan 15, 2010
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Damn this is a loaded question @Ed Brooks

Overall I would say dealers ARE spending too much on paid search but for several reasons...

One of those reasons - Dealers are being swindled into paying STUPID money for ineffective paid search services. My dealer included.

I have more to say but I'm going to refer to @mwpistell for the rest because he knows way more than me...
 
On this note: I helped a client this week examine his paid search and SEO efforts. Basically, the client (a smaller dealership) wasted $20K over the last 3 months. Absolutely criminal, in my opinion.

That said, I also know where this "Paid Search is a Waste" chant is coming from, so I have to ask @Ed Brooks : Were you compensated in any way to write your post or your forum comments?

I will take you at your word.
 
@Stauning --
What is implicit in the statement "Paid Search is a Waste", is the notion that ALL paid search is a waste -- something that I never said. What I actually said in "It’s Enough to be ‘Found’, Right?" is "(p)aid search has a place in dealer budgets".

So to be clear, "Paid Search is a Waste" is your phrase, not mine.

For years I've said that dealers do better when they have a balanced marketing budget. And all I'm saying here is that the amount of money spent on Paid Search may have outgrown its return for many dealers.

The cause of this 'imbalance' is debatable, but I suspect it is the combination of a lack of transparency with some resellers and agencies in regards to management fees and poorly managed campaigns.
 
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It was a question, Ed. My apologies if you thought it was something else. There is far too much undisclosed paid placement of "studies" and other content in the automotive blogs, so I think it's a valid question. Were you compensated in any way for your post or your forum discussion? A simple yes or no is all I was looking for; and as I wrote, I will take you at your word.

And, I am hopeful I made it clear that the "Paid Search is a Waste" chant we are starting to hear from some vendors in automotive was my phrase.

Finally, if you read my first three sentences, you'll note that I am personally seeing dealers wasting thousands on paid search. (To be clear, I received zero compensation for the opinions I expressed both for and against paid search, except for the satisfaction of sharing this story with others who might also be wasting $20K per quarter on smoke and mirrors.)
 
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@Stauning - I was not paid for this discussion or the blog post that lead to this discussion, but I've never made a secret of my affiliations or employers, current or past. I am a salesman and I do get paid when I sell something, but that is it.

I'm a pretty open book. Anyone who wants to connect with me or research me is welcome to do that - Connect with Ed Brooks
 
Thanks, Ed. I didn't realize you were now with Cars.com until I clicked through on your profile. Explains the post and discussion.

Good luck with that approach. Personally, I'd rather see Cars.com focus on greater attribution tools (which they are) and greater conversions/exposure/traffic for dealers (which they do not appear to be working on); than to see them attacking another industry as a corporate strategy.

Lots of great people at Cars and a lot of integrity there.
 
@Stauning -- You write on the blog quite often, are YOU being paid for your contributions? ;-)

Great question! And, no, I have never been paid for a blog post, opinion, study, white paper, etc, unless it was fully and clearly disclosed within the material. (There is WAY too much of this happening across the blogs, the automotive "press," the webcasts, the "studies," etc...)

I like to say "I have a mirror and three sons; and I have to look at each one every day."

(Of course, two of my sons are in college now, so that statement probably needs to be updated.) :)
 
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I'd be curious to hear how some of you are tracking the ROI on your SEM efforts. With the dealers that I've worked with it's ranged from "Throw money at it and hope something sticks" to "measure VDP views, form submissions from SEM and hope that impacts sales" to "DMS matchbacks via email addresses and phone numbers"

So I think the answer to the question "Am I spending too much on SEM?" has to be based on quantitatively measuring the impact on the bottom line. Looking at clicks, impressions, CTRs, etc doesn't tell you much. They're useful metrics to track over time, but they shouldn't be how you measure ROI. Tracking phone calls, website conversions, VDP views, etc is better, but still doesn't tell you if you sold anything. Looking at finalized deals in the DMS and tying those back to phone calls or website leads that came from SEM is going to give a much better picture of the ROI.

And that is still imperfect. But if you are tracking all of those things then you can make a much more informed decision about where to allocate that digital spend.