Does SEM work? Not according to this stinging indictment.

[joe.pistell]

I lifted the title from a line from the Search Engine Land article. And Joe, I LOVE bombast!

My only problem with SEM (well my main problem) is the practice of buying your own branded keyword - "Billy Bob's Ford". It appears as if much of the discussion about this study in the broader online marketing is centering on this practice as well.

What do you think Pope Joe, would you buy "Billy Bob's Ford" (If you were Pope Billy Bob).

Ed,

You asked: "would you buy "Billy Bob's Ford" (If I were the White Smokin' Pope of Billy Bob's Ford)."


IMO, this is a gut call. I'd review the SERPs and decide how well I own the top of the page (the name "Ford" can fire off a lot of PPC ads) While I am here, can someone explain to me why the name "Courtesy Ford" is so popular?

An interesting study to review would be a business that buys it's name in PPC. There hasn't been a study on how a shopper looking for "billy Bob's ford", that may have clicked on another link (PPC or Organic).

Regarding ROI, From my experiences, I'd wager these calls are often low to non-competitive SERPS that create service calls, or shoppers trying to reconnect with a rep.

 

[ddavis]

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?

When I first got involved in the internet I viewed a VDP exactly like my old newspaper layouts. I figured that if it was good, it would generated more leads. I have received emails from AutoTrader stating that we led the market in new car VDPs. One was titled "Who is Selling New Cars in Dallas?" making the assumption that a large number of VDPs translates to sales. That was several years ago. Nothing really new but I do like his approach to tracking it.

 

[jscole86]

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.

Chad, Yeah I do now have this set up. Thanks!

I would say that increased VDPs is the MOST important thing whenever you're looking at automotive digital marketing. Calls, emails, chat sessions are all leads. A majority of your customers will never submit a lead in any format - they simply show up at the dealership AFTER conducting a considerable amount of research. I'd submit to you that a website's job isn't to generate leads, it's job is to help your customers complete their research and make a purchase decision.

I agree that the VDP is the most important thing within digital marketing - It is the online equivalent of the customer that's at the dealership looking at the vehicle. But getting the shopper onto a VDP is only half the battle.

The 2nd half is to optimize your VDP to address all the questions and issues they have - whether it's something about the vehicle, the dealership, financing, trust, etc.. - basically help and guide them into making a purchase decision, like you said. I would venture to say that the better you get at addressing shopper's concerns and issues on the VDP, a greater % of shoppers will instead just "walk-in".

Classified sites tend to generate VDPs at a considerably reduced cost than SEM - as Brian mentioned in his webinar.

At least for us, VDP views from SEM are more expensive than VDP views on classified sites. However, that shopper from SEM is now on our website, looking at JUST your own vehicles, without any other distractions from other banner ads and competing cars. So you'll pay more, but you'll most likely have a more focused shopper.

IMO, You just have to make sure that if you participate in SEM, that you figure out which campaigns / ads / keywords bring you a VDP view. If someone is searching for us using a branded term, we just have to know whether there are competing campaigns out there that could show up. If so, SEM is a smart move. If not, save the money and buy some of that good craft beer from Vermont...

 

[ddavis]

Brian has a new article on the main page of DealerRefresh. He states that dealers might consider print and electronic for cost cutting rather than SEM. My previous dealerships did spend a higher percentage of the total advertising budget on these rather than for the internet department which was always a point of contention. According to the Dataium study, dealers are spending 55% of their internet budgets on SEM which, in my estimation, could use a haircut. The "balanced approach" makes me think of the Obama administration taking from the rich which in our case is the print and electronic media where dealerships often spend the most. The prudent dealer is going to consider all areas of the advertising budget. Of course, I don't sell SEM services.

 

[joe.pistell]

I just dont see how it's possible that a dealer can spend 55% of their total ad budget on SEM*.

With an avg ad cost of $500 PVR, and if a smaller store sold 100 units, that's a $50k monthly ad budget. That's over $25k in SEM. I must be missing something...

*no fair using dumb ass settings in Adwords, like 500mile distance and ads for cars that dont exist, with no negative keywords, etc...

 

[Jason Ezell]

Great discussion as always. This is a very important subject and it's great to see the different perspectives as there is not one right answer, the same strategy does not work for every dealer and certain tools and ad sources work better in some areas than others. So the perfect mix really depends on a formula of location, demographic, product line, competitive landscape, and many other factors. But there are certainly best practices that should at least be looked at and considered to really hone your own strategy.

One item to clarify, the actual stat is that dealers spend on average of 45-65% of their Internet ad budget onSEM, not that percentage of their total ad budget. It certainly does not compare to the spend on traditional.
This is typical of the bulk of dealers because their web stats will show them that 65+% of their traffic is being driven by search engines.
Therefore, most dealers use direct referring URL reports for their digital ad spend allocation.

What we know is, there is awareness or attribution for your dealership and vehicles being created prior to the search engine visit that led that shopper to your site. And it tells a much different story of how your digital ad spend should be allocated. Again, most dealers here on DR are privy to this new level of knowledge and learn from each other and professionals, so you are definitely ahead of the curve. But when we look at 1000s of dealers, we see most are still miss-allocating digital dollars based on looking at only direct referring sites vs. leads submitted.

We also know that shoppers that type in your URL, or used your name as key word search, still represent the highest quality traffic and the vast bulk of leads, usually 52+% of all email leads came via your URL or name. Where did people learn your URL? How did they know to shop for you by name as almost 79% of search engine traffic does, weather organic or paid? Is there really no value in traditional advertising if branding terms and direct traffic is still your best source of leads and sales? How do I position myself to get my name and vehicles in front of the most in-market shoppers?....put your brand and your vehicles where the car shoppers are

JGreen really says it best in this thread; constant optimization and relevance is the best practice. So much of what you learn from good PPC and SEM is how to better optimize your site organically and stop buying key words that your site should support itself. Allocate ad dollars based on Return and don’t expect to get 200% more from a source just by adding 200% more dollars to it. Use PPC and SEM as a strategic tool to gain advantage where your site does not have an advantage organically; special promos, new vehicle launches where you might not have inventory yet, service and parts, advertising in surrounding areas where your name might not be the household name.

Too many dealers are using PPC as a crutch because they don’t focus on optimizing the site itself, or on driving quaity traffic. It's a simple "more traffic = more leads" philosophy that as another post here mentioned, drove one dealer out of business.

There is a distinct percentage mix of traffic to your website and identifying that traffic and the sources that drive it, help allocating digital dollars much more obvious and effective.

Great discussion

 

[ddavis]

I just dont see how it's possible that a dealer can spend 55% of their total ad budget on SEM*.

With an avg ad cost of $500 PVR, and if a smaller store sold 100 units, that's a $50k monthly ad budget. That's over $25k in SEM. I must be missing something...

*no fair using dumb ass settings in Adwords, like 500mile distance and ads for cars that dont exist, with no negative keywords, etc...

Joe, my mistake. I should (and did change it above) have said internet budget not advertising budget.

 

[ddavis]

I thought this was an interesting article: Paid vs. Organic

 

[csabatka1]

I'm a firm believer that SEM works, only with proper budget, the market, and keywords sets. We dropped Autotrader in March of this year and tried a SEM through Haystak. Even with our limited budgets we have had great results in 2 of our 3 markets and the 3rd market is a "less than digital market".

In one market last month we spent approximately $10k less on our SEM budget compared to what we were spending on Autotrader and 2 sold more units than what we were seeing on average from Autotrader. Would we have seen these solds in organic - probably not. I did extensive research on keywords used on our SEM leads and most we were in bottom 1/3 of page 1 or deeper. As a direct lead source SEM is out performing Autotrader in the 2 markets. Our website traffic, not including paid keyword traffic, in year-over-year, and month-over-month substantially higher since dropping Autotrader. We have found their argument of an indirect source of driving traffic to websites a very poor one.