KIA denies co-op reimbursement for in-house PPC advertising

[mikesayre]

Most of us here have a bad taste in our mouth when OEM's force things down our throat, like website vendors. The good news is that trend is dying for the most part.

The latest on the digital advertising requirements from KIA isn't technically forcing dealers, but it's a clever workaround which heavily incentivizes dealers to use one of the approved vendors listed below in order to receive co-op reimbursement at 100% level.

So if any dealers are doing their own in-house PPC, no matter how well it performs, KIA will not allow dealers to spend their co-op money there. Been using a local vendor, or PPC guru at your KIA dealership? Sorry, you can't co-op 100% or any reimbursement level after this month is over.

I thought most OEM's have started to move away from this kind of forced use of vendors, and it scares me to think more will follow suit with digital advertising. I'm a firm believer in running PPC in-house, or using (choosing) a person, vendor you are comfortable with.

 

[Jeff Kershner]

Most of us are here have a bad taste in our mouth when OEM's force things down our throat, like website vendors. The good news is that trend is dying for the most part.

The latest on the digital advertising requirements from KIA isn't technically forcing dealers, but it's a clever workaround which heavily incentivizes dealers to use one of the approved vendors listed below in order to receive co-op reimbursement at 100% level.

So if any dealers are doing their own in-house PPC, no matter how well it performs, KIA will not allow dealers to spend their co-op money there. Been using a local vendor, or PPC guru at your KIA dealership? Sorry, you can't co-op 100% or any reimbursement level after this month is over.

I thought most OEM's have started to move away from this kind of forced use of vendors, and it scares me to think more will follow suit with digital advertising. I'm a firm believer in running PPC in-house, or using (choosing) a person, vendor you are comfortable with.

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Mike, that does indeed suck though you must remember you are a rare bird.

Any chance you're using any of those approved vendors for your website? If so maybe you could strike up a "deal"

 

[mikesayre]

Any chance you're using any of those approved vendors for your website? If so maybe you could strike up a "deal"

Absolutely Jeff, that's what we did, and I'm thankful Dealer.com was one of the options available.

I would hate to be a dealer that doesn't have one of the vendor website options listed though. And, all of the vendor options listed are great choices, and I understand I'm the major minority here. Plus I completely understand the move by KIA, but I'm not a fan of forced choice methods. Once you go down that path, it's hard to unwind. Look at the other OEM's that have done similar over the years.

Why not provide requirements or integration standards to meet? Let me fail to meet them, then I'll choose an approved vendor.

What if dealers have had success with their own in-house programs, or vendors for years now, but they are being forced to fire them because they can't use any co-op funds to pay for the advertising? No one has asked us about that, maybe they didn't care, I'm not sure.

Where does it end? What if 3rd party vendors are next? What if Cars.com & Edmunds are now the only 3rd party sites that are eligible for 100% co-op fund reimbursement? All the rest 0% reimbursement. How would that go over?

 

[ChrisR]

Just be careful with Dealer.com SEM - they were used at my last dealership, when I took over decision making on the marketing side, they had the store up to $18,000 a month in PPC spend!!! I changed SEM vendors, ended up getting roughly the same traffic, for a 1/3 the spend, with better bounce rate & conversion.

 

[umer.autojini]

Main reason for the approved vendors is the time and resources it would take to manage the program if it was open. Right now we got approved vendors... and may be may be some one looks into the vendor performance once a year... otherwise it is all just on autopilot.

 

[mikesayre]

Just be careful with Dealer.com SEM - they were used at my last dealership, when I took over decision making on the marketing side, they had the store up to $18,000 a month in PPC spend!!! I changed SEM vendors, ended up getting roughly the same traffic, for a 1/3 the spend, with better bounce rate & conversion.

We've used Dealer.com before and they do great, very similar to all on the list. It's easier for me to run the campaigns myself though, and using any vendor becomes more of issuing directions for me than anything, which actually takes more time.

I've never had Dealer.com run up any spend on me if I'm not signing off on it. My guess would be that's why you took over the marketing responsibilities, maybe most of that $18k was display? We determine spend based off demand per market, per brand, and many other factors to find the ceiling, plus we have to see a return in opportunities for sales or service that makes sense.

 

[mikesayre]

Main reason for the approved vendors is the time and resources it would take to manage the program if it was open. Right now we got approved vendors... and may be may be some one looks into the vendor performance once a year... otherwise it is all just on autopilot.

Absolutely nailed that one Umer. The overall dollar savings get's shifted around as well for the OEM's which makes it attractive, so the vendors pay for themselves with co-op dollars in the fees, extra markups, plus anything else they can sell. The extra attribution modeling for the OEM is a plus too, and good for the dealer network, but it all can be done without forced choice.

 

[ChrisR]

We've used Dealer.com before and they do great, very similar to all on the list. It's easier for me to run the campaigns myself though, and using any vendor becomes more of issuing directions for me than anything, which actually takes more time.

I've never had Dealer.com run up any spend on me if I'm not signing off on it. My guess would be that's why you took over the marketing responsibilities, maybe most of that $18k was display? We determine spend based off demand per market, per brand, and many other factors to find the ceiling, plus we have to see a return in opportunities for sales or service that makes sense.

It had a small element of display, their bidding strategy for keywords was out of line, they kept requesting more funds to maintain Impression Share, yet our CTR kept dropping. It seemed the SEM rep on my account was more about the shotgun approach, where I prefer precision. We went rounds, they couldn't improve, so we dropped DDC SEM for the other vendor. Even with display, we still ended up at 1/3 the spend. Campaign structure, strategy, etc did not seem to be the strong suit of DDC on our account. Your results may vary.

 

[mikesayre]

It had a small element of display, their bidding strategy for keywords was out of line, they kept requesting more funds to maintain Impression Share, yet our CTR kept dropping.

Sounds like you found a vendor you're happy working with Chris, I know that's usually the hardest part. I agree the keyword templates most vendors use are very broad, and need to be widdled down a bunch. Especially if you are going after high impression share, that can be very costly on broad keyword templates, near impossible if you're trying to do it on broad make/model keywords. The geo area is a big factor, most of the time it's over 30 mile radius, which is ridiculous to try to maintain a high impressions share on. Most vendors aren't familiar which the local nomenclature either, and usually grab the nearest cities in the keywords which aren't relevant in most cases.

On our in-house name & brand based campaigns we range from 10% to 24% CTR, most of which says a lot about a store's branding, keyword patterns, ad copy, and the OEM demand popularity too. On make & model keyword patterns, we're ranging from 1.9% to 3.8% CTR, we dial in the geo area and focus on high impression share with thorough coverage.

 

[ChrisR]

Sounds like you found a vendor you're happy working with Chris, I know that's usually the hardest part. I agree the keyword templates most vendors use are very broad, and need to be widdled down a bunch. Especially if you are going after high impression share, that can be very costly on broad keyword templates, near impossible if you're trying to do it on broad make/model keywords. The geo area is a big factor, most of the time it's over 30 mile radius, which is ridiculous to try to maintain a high impressions share on. Most vendors aren't familiar which the local nomenclature either, and usually grab the nearest cities in the keywords which aren't relevant in most cases.

On our in-house name & brand based campaigns we range from 10% to 24% CTR, most of which says a lot about a store's branding, keyword patterns, ad copy, and the OEM demand popularity too. On make & model keyword patterns, we're ranging from 1.9% to 3.8% CTR, we dial in the geo area and focus on high impression share with thorough coverage.

We did, took some time, which was wise. Landed on a vendor that communicates well, and works with us, as we need them to.

Funny thing about the 30 mile radius, I previously worked in Las Vegas, at the only Subaru store for over 100 miles. Once you get outside the city, it is open desert, definitely an interesting market to figure out.