AMA PPC Fraud and bad oversight - at 92% of dealerships

[Steve Stauning]

Okay, I made up the 92% statistic, though I doubt I am too far off.

It's been over 8 years since we recorded a 15-part video series covering "How to Spot & Stop SEO & SEM Theft and Fraud," and although some of the content in that series is a little dated, the need for dealers to be vigilant about how their digital marketing dollars are being spent has only grown.

In that series, I mentioned that SEM Shouldn’t Stand For “Steal Everyone’s Money” - though, sadly, that's the reality I see with dealers even today.

Much of the waste and fraud I see today is the direct result of OEM digital programs. To be clear, the waste and fraud in these programs is a feature, not a bug. These programs are profit centers for the OEM. Those running them don't care if any metal is moved, just so long as they score their bonuses.

Some of the waste and fraud I see is the result of either nefarious or inattentive digital marketing vendors. Again, this is a feature, not a bug. Truly managing a dealer's marketing budget with a goal of maximizing that dealer's return on investment doesn't always come with high margins. Not if you have to hire competent people to run the campaigns and provide the dealership with full transparency. While I want the SEM Vendors to make money, I don't want them to make all the money.

Finally, there's Google. The remaining waste and fraud I see is caused by Google being Google and blowing your budget chasing clicks that would've converted organically or have nothing to do with moving metal. Again, this is a feature, not a bug. You see, Google knows how to run your business better than you do. Don't believe me? Just ask them. Every interaction with someone on the Google Ads Team is all about showing you why you need to spend even more money despite the lackluster results.

Not sure if your SEM budgets are being wasted or stolen? Ask me anything - if you know me, you know I love my opinion, and I don't mind sharing it.

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[carguyfiles]

Well good ones should be providing value and not selling dirt. If they provide value and help move the metal like you say then it is clearly worth it. If they dont then obv its not going to last long for either side

 

[Steve Stauning]

If they dont then obv its not going to last long for either side

In theory, yes. In practice, not so much.

Those moving no incremental metal (vehicles sold to customers who would not have found the vehicle organically) have no incentive to change because very often, the dealership's team has no idea what to look for. They sit through the monthly "Performance" meetings looking at worthless charts and believing the big words coming out of the vendor's mouth.

Moreover, the OEM programs have been known as black holes for marketing dollars for years, though I see zero positive changes. In fact, I see just the opposite: more and more worthless, wasted spend that does nothing except increase the bonuses the OEM Execs "earn".

 

[Alex Snyder]

Hey Steve, thanks for doing this!

How often do you find a PPC company pushing the dealer to purchase their own brand name? And about how much of the budget does that usually equate to

 

[Dan Sayer]

Okay, I made up the 92% statistic, though I doubt I am too far off.

"Hold my beer," said OTT.

If there was anything media agencies learned from SEM, it was the longer you keep something a mystery, the longer you can maintain profits. I don't want to take away from your continuation of the SEM alarm, but can you at some point run a series on OTT and the fleecing of automotive retail in that space? I doubt I'd be that far off if I made up a statistic that 98% is fraud!

 

[carguyfiles]

They sit through the monthly "Performance" meetings looking at worthless charts and believing the big words coming out of the vendor's mouth.

dang thats pretty rough and i can see what you mean. do these ads works at all? if they do what are the ways you have seen them be effective? if they are total junk, whats the better alternative? you said they found them organically.. is this mostly through google search or through stuff like facebook marketplace or searching cars.com etc?


and where are these ads being placed that are the junk ones? I imagine some places could be good lanes for serving ads... for instance if ppl look on cars.com for cars then paying cars.com to surface a listing via an ad might turn into more sales, no? you sound like an expert here so really curious your thoughts

 

[Steve Stauning]

How often do you find a PPC company pushing the dealer to purchase their own brand name? And about how much of the budget does that usually equate to

Great question! Good PPC companies will advise dealers to only spend on their Dealer Name when there is clear evidence of competition successfully bidding on the name. And even then, the budget will be small (~5% of the total spend) and all Dealer Name clicks will be in the Brand campaign.

That is, they make all variations and misspellings of the Dealer Name negative in every other campaign.

Not-so-good providers will run a Brand campaign with 5-10% of the budget while at the same time not policing Dealer Name clicks in other campaigns (meaning Google will push budget toward the Dealer Name even in the non-Brand campiagns). When I catch vendors doing this with a new client, Dealer Name clicks can account for 70% or more of the total PPC conversions in a given month, though the dealer has been reliably told by their vendor that they're only spending 5-10% on Dealer Name clicks.

(The exception to not bidding on a Dealer Name is when the Dealer Name contains a city/area name like Atlanta Toyota. With those variations, all bets are off because these dealers must bid on brand terms.)

 

[Steve Stauning]

do these ads works at all? if they do what are the ways you have seen them be effective? if they are total junk, whats the better alternative? you said they found them organically.. is this mostly through google search or through stuff like facebook marketplace or searching cars.com etc?


and where are these ads being placed that are the junk ones? I imagine some places could be good lanes for serving ads... for instance if ppl look on cars.com for cars then paying cars.com to surface a listing via an ad might turn into more sales, no? y

A lot to answer here, but I'll try.

When managed properly, both Google and Meta ads will move incremental metal. The problem is that virtually all OEM Programs and many SEM vendors literally don't care about moving incremental metal. That's why dealers need their own access to Google Ads (and know how to find the waste) and need to use GA4 to measure the traffic quality (and number of hard conversions) from Meta Ads.

When I wrote about Google chasing clicks that would've converted organically, I was referring to Organic Search.

The "good lanes" for serving ads are: Almost Everywhere and Virtually Nowhere. My point is that many (but not all) digital channels can efficiently drive incremental volume, though dealers (because they're busy selling cars and digital is not their expertise) can be easily fooled.

This means that even if Google Ads is efficiently moving incremental metal for one dealer, the dealer next door might be wasting 90% of their Google Ads budget (because that dealer's digital provider is lazy, dishonest, or unknowledgeable). So for the latter dealer, there are no "good lanes" so long as they keep that vendor around.

 

[Dan Sayer]

when there is clear evidence of competition successfully bidding on the name

First step for franchise dealers is to point it out to their OEM rep if the competitor is a like make. I know for Ford, when they see obvious Ford on Ford crime, that will activate a pretty swift slap on the hand to the other dealer.

 

[Steve Stauning]

but can you at some point run a series on OTT and the fleecing of automotive retail in that space? I doubt I'd be that far off if I made up a statistic that 98% is fraud!

TBH, my clients run very little OTT because we measure EVERYTHING!

When they do run OTT, we expect to see a jump in Organic Search and Direct traffic. (Because, if the creative is effective and the ads are being seen, then people should be Googling the dealership, correct?)

OTT is (and likely always will be) "Faith Based Marketing." You just have to believe it's working...