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Pay p/Click -vs- 3rd party Classifieds

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joe.pistell

joe.pistell

Uncle Joe
Apr 7, 2009
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Joe
#1
Pay p/Click (PPC) vs 3rd party Classifieds-

Buckle your seat belts, my nose for marketing has me in an early stage project that feels like it's a BIG home run.

Background:
IMO, AutoTrader and Cars (and the rest) charge us boat loads of money because they have traffic. IMO, that traffic occurs because they rank well in search engines. Remove this "search advantage" and what do you have? My gut tells me that less than 10% of its traffic* comes from direct address entry.

So What?

Under this assumption, if 90% of the 3rd party Classified traffic is Search originated, then why not join them in the fight and roll your 3rd party Classified dollars into a well managed PPC campaign? When you advertise on google,
  • You get instant top rankings,
  • You pay only for ads that people click on,
  • You advertise only for brands you want,
  • When you want,
  • Where you want
  • and how much you want to pay.
Home Field Advantage BONUS:
This traffic is on your home turf. You're not slugging it out with 22 other dealers trying to sell the same year/make/model/trim unit.

Ok... let's see some dollars turn into sales
I am going to attempt to connect ad dollars spent to units being sold. 1st, we all know that it's impossible to create a direct connection between a dollar spent and that dollar creating an up. So... Some voodoo is required, so, I am walking into this very slowly.

Let's do some "what if" math.
BoomBoomMotors.com spends $1000 a month with AutoTrader and $1000 a month with Cars.com. How many buyers comes from this ad spend? (we'll never really know, voodoo is required) Roll that cash into a Google ad campaign, assume that you pay $1 per visitor (this is a fair number)

This $2000 google spend will produce 2000 visitors to your site.

How many sales could BoomBoomMotors.com see?
I estimate 12.8 sales. This projection has voodoo in it, BUT, it has less voodoo in it than you think. Follow along... We created an un-scientific survey (below) and asked everyone to tell us what your visitor to sales ratio is. We've found that for every 1,000 visitors to your site, 6.4 of them buy.



BoomBoom Management now has the beginning of some hard analisys.
  • How well does their site work (# of visitors to sales ratio)
  • How much biz will be lost if 3rd parties are turned off?
  • Is there a high ROI solution that keeps both?
This is an exercise, YOUR "visitor to sales ratio" maybe above this or below. Get more details and See for yourself, Here is is the survey fyi:
http://forum.dealerrefresh.com/f40/web-visitors-vs-sales-survey-218.html

Want More?
My pre-sale surveys say that 70% of the auto-shoppers don't have a specific year/make/model/trim in mind and are looking for "something" to inspire them. What a wonderful up this is, far better than a grinder looking for your best price on an 07 impala LS.

Based on the premise that Google searches are the beginning, middle and end of the autobuying oddesy, Re-allocating Ad Dollars makes sense.


*1st time user
 
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#2
You're on to something here Joe. It might be slightly early to totally move away from the third parties, but I can definitely see that happening for a few of us in the future. I do see where it will take longer for some third parties to lose all their steam, and I don't think they'll all go away - I think they just won't be as effective as they are today.

Google is already pushing the middle man out. You mentioned in the eBay thread that eBay went to hell (for dealers) when Google didn't give the listings the same exposure anymore. The same thing is already happening for other third-party sites as I type this. Google's logic is that nobody is going to buy a car from Autotrader. The customer is going to buy the car from a dealer or a private seller (the private seller being Google's gray area), so why help a middle man confuse the situation? Google's goal is to get the searcher the most relevant results available. In that goal, the middle man is not relevant.

So, it will force the middle men to spend more money on SEM if they want to continue to get business from search engines while the dealers will dominate the organic results. It is actually a great money-maker for Google because the dealers will still be spending money on SEM too.

As for the private seller, that is definitely a tough one. Maybe CraigsList, twitter and other social media sites will become the main online classified sections for individuals. I sold my old Landcruiser by building a website for it (1997 Landcruiser for Sale in Virginia Beach) and it got great results when I first put it up - way cheaper and effective than putting it on Cars.com or Autotrader.com! But...I'm not the typical individual selling a personal car.
 
#3
Joe, this in a very interesting thread and I'm surprised that I missed it.

Actually, there is a local import dealer that cancelled all their display advertising in favor of PPC. Initially, I assumed that the decision was made primarily due to inventory issues. I heard from one of the Internet Directors, in the group, that their sales have hit an all time low. They took the money that they would have spent, plus some, and applied it to PPC. They were an Alpha, Premium dealer on AutoTrader.

Looking at their website, I don't see a compelling reason for anyone to contact them. You have to wonder why someone would spend that much money to draw people to a website without any hooks.
 
#4
Haha. Arguably, you don't need "voodoo" to attribute advertising dollars spent online to sales -- assuming the user took the time to fill out one of your contact forms. As long as you're tagging your URLs correctly in AdWords and utilizing Google Analytics goals & event tracking, you should have enough information to look at your CRM and decide which ups came from your PPC campaigns and exactly which campaigns are working.

Those people that choose not to fill out a form on the other hand.....a bit harder to track. I think the only way you'll truly know is by offering some sort of incentive for them to fill out the form. We're running a special on our site now -- a $500 coupon for a new vehicle IF you fill out a form. Once the form gets filled out, we automatically have an email response that sends them a coupon, so it also means they can't give us bogus emails :) Not too sure if it's working yet as we just started the promo, but we shall see.

EDIT: Also, the contact form suite that we use offers a plugin that tacks on Google Analytics UTM info to all submitted forms. 1 more reason to control the source code for your site :)
 
#6
sweece said:
I think the only way you'll truly know is by offering some sort of incentive for them to fill out the form. We're running a special on our site now -- a $500 coupon for a new vehicle IF you fill out a form. Once the form gets filled out, we automatically have an email response that sends them a coupon, so it also means they can't give us bogus emails :) Not too sure if it's working yet as we just started the promo, but we shall see.
Click to expand...

sweece,

I come at the ROI calc's differently. Think about this interesting puzzle.

Question: Why do we obsess about lead counts?
Answer: Because we can.


Here's the math I obsess over:
95% of shoppers prefer to shop stealth.
5% of shoppers send a lead (& only 15% of those leads get closed)


The REAL Pot of Gold that we all overlook:
90% of your buyers were shopping at your site prior to purchase.


Question:
Why are we obsessing over lead counts, yet IGNORING the silent majority?
Answer: Because leads are visible and the math is easy.


Question: Can the pursuit of leads take our eyes off of rewarding our stealth shoppers?
Answer: Yes.


I've been pounding the table on behalf of the silent majority for a while now http://forum.dealerrefresh.com/goog...0&sa.y=0&siteurl=forum.dealerrefresh.com/#577

HTH
Joe
 
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#8
JoePistell said:
sweece,

I come at the ROI calc's differently. Think about this interesting puzzle.

Question: Why do we obsess about lead counts?
Answer: Because we can.


Here's the math I obsess over:
95% of shoppers prefer to shop stealth.
5% of shoppers send a lead (& only 15% of those leads get closed)
Click to expand...

I agree, and good point Joe. Here's why I obsess over lead count -- my ad budget is dependent upon lead count and conversion. I only manage Internet spending and without some hard #s to show upper management, they have no reason to believe that we should be spending more money online. And maybe we shouldn't -- but I feel like I need a deeper understanding of customer behavior in order to make that choice.

Simply put, how do I justify the money that we are spending on PPC ads, banner ads, etc. if I can't show a direct correlation between those ads and sales? That's the reason I try to so hard to get people to fill out a lead -- make things easier for me while still allowing the customer to choose their preferred method of contact. Advice?
 
#9
Oops, I forgot to add...

If lead count is not #1, then how do I score ROI?

The stealth shopper (aka buyer) is seen in the stats that measure the QUALITY OF THE VISIT.


  1. TIME ON SITE
  2. # OF RETURN VISITS
  3. # of pages viewed <--last place
If any lead source can give me great visitor stats, then I've got an engaged visitor and a perfect stealth shopper.

Example:
FaceBook Ads* = FAIL
Google PPC ads = WIN


*I'll admit I haven't deep dived FB traffic to see if I can trace traffic to it PAST the initial visit, the initial visit blows!
 
#10
sweece said:
...my ad budget is dependent upon lead count and conversion. I only manage Internet spending and without some hard #s to show upper management, they have no reason to believe that we should be spending more money online.Advice?
Click to expand...

Sweece,

Your management team needs an "ah ha" moment. They need to see the NEW BATTLEFIELD as clearly as our brilliant John Guinn sees it:

"The Front Door ain't that thing on the hinges on the front wall anymore, now is it? The Front Door has moved."

So simple, it gets it all in, I LOVE THAT QUOTE!

Your upper manager(s) that make the decisions have NO IDEA how many BUYERS were at your site prior to purchase. If they did, they'd realize that your website is the SINGLE BIGGEST INFLUENCE ON ALL OF YOUR BUYERS (90% of all sales pass thru it).
 
Dominion DMS
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