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Oh Good! Another OEM Mandated Digital Partnership program horror Story

dscarry

Noob
Feb 14, 2011
22
4
0
First Name
Duncan
It's really just about the different in perspective between a dealer and OEM.

The OEM is trying to help the dealer body, not single dealerships.

Our data suggests that only 45% of dealerships run SEM campaigns at all. If you're an OEM and you can put a program in place that encourages dealers to run SEM campaigns and that number goes to 65% - it should be a win for your brand overall.

Since the OEM is ponying up the money and needs to know that what they did was effective, the select limited providers they've vetted who will provide a base level of experience and agree to aggregate data for them in a particular manner. This way, they can prove whether the effort is working or not.

For a dealer like you, who appears to be more savvy than the norm, it may not be as effective for you. However, for the average dealer in the body, it's a win.
 
Reactions: 1 person

ddavis

Sr. Refresher
Jun 28, 2011
1,493
491
113
First Name
Doug
Our data suggests that only 45% of dealerships run SEM campaigns at all. If you're an OEM and you can put a program in place that encourages dealers to run SEM campaigns and that number goes to 65% - it should be a win for your brand overall.
Most dealer websites are teflon. Bringing customers to a poorly merchandised site doesn't do anyone any good.

According to the Datium Cars.com study, dealerships are spending too much on SEM, now. Cars.com Study
 

dscarry

Noob
Feb 14, 2011
22
4
0
First Name
Duncan
My point was that from an OEM perspective, getting the 55% of dealers not effectively marketing into the game is a benefit to the brand overall.

According to the Datium Cars.com study, dealerships are spending too much on SEM, now. Cars.com Study
On the other point: I really do like Dataium and think they do a great job presenting real data for auto dealers.

However, in this case, the data is flawed and conclusions are inaccurate.

With 6000 digital campaigns and dealer websites in our portfolio, we have access to the pre-click data, post-click data, website analytics and conversion data. Dataium doesn't have that width of data. With our view into the entire process, we have more insightful data. On top of this, we have quite a bit of breadth and depth of research coming from our sister ATG companies.

Here's some of the misses in that study:

"$2,000 and $20,000 in paid SEM monthly"
While we have dealers that spend much less and much more than those figures, our average dealer spends $2431 on search engine marketing. In addition to that, Google provides us very detailed information on industry averages. While we can't publish that data, I would say that our SEM customers have stronger than normal search spends. The language in the Dataium study insinuates that the mean or median spend is much higher. The industry average search spend is actually below the bottom end of the range they state.

'Investment in automotive marketplaces, while also experiencing variation, averages 25%'
While we don't always have access to a dealer's overall digital budget, this study states that dealers spend 55% of their digital budget on SEM and 25% on automotive marketplaces. Given the real SEM spend statistics from the prior paragraph, for this to be true, the average dealer would have to spend $1215 on average on automotive marketplaces (between both AutoTrader.com and Cars.com). I think everyone on this thread would agree that dealers spend much more on the portals than that. Dealers are not spending more on SEM than marketplaces / portals. In fact, it is the other way around.

"Based on the firm’s analysis of the search terms that led users to dealership websites, 78.6% of search engine referral traffic resulted from search terms that were a variation of the dealership name, which theoretically causes the dealership URL to appear among the top organic search results for websites that follow best practices for search engine optimization."
This statement is confusing at best, but seems to insinuate that nearly 80% of search traffic comes from the dealership name. While the statement is ambiguous, clearly it's intent is to illustrate the impact of brand name searches on traffic. First, that statistic is incorrect; the average amount of traffic from brand terms from search campaigns is 39%. What Dataium (and most people) don't truly understand, is that SEM traffic volume and cost aren't directly correlated. While 39% of SEM traffic comes from brand terms, only 11% of spend goes towards those terms.

There are quite a few other inaccuracies, but I don't know that we need to go through all of them here.

The difficulty in this industry is that Cars.com took a sampling of research, didn't understand it and then presents it as fact. I think you suggested this in another thread - a lot of this research is just a big ad - and dealers read the research and can't tell fact from fiction and it results in a dealer body that is less-educated or misinformed and subsequently make less than perfect buying decisions.

This also pits digital marketing channel versus digital marketing channel. That shouldn't be the case. The real imbalance in marketing budgets is traditional versus digital. Today, digital only makes up 25% of the average dealer's marketing budget. Dealers still spend nearly as much on newspaper as they do on ALL digital marketing channels combined.
 

Daniel J. Mondello

Refresher
Oct 17, 2011
181
49
28
First Name
Dan
It's really just about the different in perspective between a dealer and OEM.

The OEM is trying to help the dealer body, not single dealerships.

Our data suggests that only 45% of dealerships run SEM campaigns at all. If you're an OEM and you can put a program in place that encourages dealers to run SEM campaigns and that number goes to 65% - it should be a win for your brand overall.

Since the OEM is ponying up the money and needs to know that what they did was effective, the select limited providers they've vetted who will provide a base level of experience and agree to aggregate data for them in a particular manner. This way, they can prove whether the effort is working or not.

For a dealer like you, who appears to be more savvy than the norm, it may not be as effective for you. However, for the average dealer in the body, it's a win.

Scarry, I am one of the 45% who has already been using paid search why am I forced to participate? And since when is 45% a small percentage? My math tells me that 45% is almost 1 out of every 2...
The money is ill-spent most of those paid clicks land customers on the homepage instead of model specific inventory, a landing page or somewhere else that makes sense.

What percentage of dealers are utilizing tv? what about radio and billboards?

"it should be a win for your brand overall" So basically its ok to penalize progressive dealerships so that late to the party dealers can catch up? Sounds like communism to me.
 

Daniel J. Mondello

Refresher
Oct 17, 2011
181
49
28
First Name
Dan
Most dealer websites are teflon. Bringing customers to a poorly merchandised site doesn't do anyone any good.

According to the Datium Cars.com study, dealerships are spending too much on SEM, now. Cars.com Study
Hell will freeze over before I start taking periodicals published by Cars.com seriously.
 

ddavis

Sr. Refresher
Jun 28, 2011
1,493
491
113
First Name
Doug
Hell will freeze over before I start taking periodicals published by Cars.com seriously.
Dan, it was commissioned by Cars but done by Datium. With big data, they are able to track millions of shoppers as they migrate through the web.

So you trust Google more than Cars.com?

Give me one of the top three positions in organic and that website will out perform the top position in paid search. I have a friend that does that for the immediate market and ten adjacent markets and his dealers using the same key words. His dealers have seen dramatic increases in website traffic spending far less.
 

Daniel J. Mondello

Refresher
Oct 17, 2011
181
49
28
First Name
Dan
I trust no one :P
 

ddavis

Sr. Refresher
Jun 28, 2011
1,493
491
113
First Name
Doug
There is an abundance of snake oil and plenty pitch'n it. Go on DealerElite.net and look at how many vendors. They are all kiss'n each others behinds and laying in wait for the rare decision maker.
 
Reactions: 1 person

Eley Duke

Sr. Refresher
Nov 30, 2009
471
252
93
First Name
Eley
Unfortunately, What's worked for us in the past is to do everything within our power to contest the OEM on these types of actions. Kick and scream until a happy medium is reached with them or they allow us to opt out of the programs.
hows kicking & screaming worked for you with Chevy? Are you in SFE, EBE?
 

Daniel J. Mondello

Refresher
Oct 17, 2011
181
49
28
First Name
Dan