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Defining Your Competitors: OEM Mandated Search Marketing vs Dealership Focus

Let's face it. Websites are becoming a commodity in the automotive world. Most quality website vendors are putting out solutions that are good enough to work well. Few are coming up with innovations that can differentiate them, and those differences are relatively small in the whole scheme of things. The difference between a good and a great website is minimal when translating it to increased sales.

 

The reason for this is that consumers are becoming increasingly impatient when in car shopping mode. It's not that they don't spend as much time doing it as before. It's that they are doing most of their research on websites other than a dealer's site and only visiting when they're ready to look at live vehicles. At that point, they're going straight to inventory or specials and deciding from there whether to consider doing business with a dealership or not. If you have the right inventory items that they're considering, a bad website isn't going to keep them from contacting you. Conversely, if you don't have the vehicles they're seeking, an amazing website isn't going to coax them into doing business with you.

 

Websites are websites. Some are better than others and have strong conversion tools, but the real arena through which dealers can move the needle is in the quality of their digital marketing efforts. One of those efforts, search engine marketing, is arguably the greatest opportunity for advancement because it translates into more visitors, more leads, and potentially more sales when done right.

 

The biggest challenge that dealers with OEM-mandated search marketing products face is in defining competition. From the OEM's perspective, a Ford dealer's competition is the Chevy dealer down the block and the Honda dealer around the corner. They want search exposure that can take sales from the other brands. This is a good and noble cause, but unfortunately it's not the most practical target for individual dealers and dealer groups.

 

From the perspective of the Ford dealership itself, their primary competition isn't the Chevy dealer and the Honda dealer but rather the other Ford dealers in the area. It's how they're graded; we all see reports every month that tell us how we're doing against other dealerships in the area that sell the same brands. It is for this reason that OEM-mandated search marketing, as affordable as it is, simply isn't the best way to improve sales. At the dealership level, the lowest hanging fruit for increased business is by taking sales from the real competition, namely the other Ford store a few miles away.

 

As mentioned, there is one advantage to the OEM-mandated search marketing: it's cheaper. It's often paid for in whole or in part and can act as a check box on your marketing. "Yep, we're doing SEO and PPC. The OEM is taking care of that for us."

 

Unfortunately, that's really the only advantage. It's designed in most cases to keep every dealership inside their own little box. Reaching outside of the direct market area is a no-no for companies that work for the OEMs. In fact, they're goal is to keep the boxes neat and tidy.

 

When the search marketing is focused at the dealership level, it's a completely different strategy. The goals have changed; it's not that a Ford dealer doesn't want to take market share from a Chevy dealer, but that's a heck of a lot harder than taking a deal from the Ford dealer down the road. Let's say there's a dealer in a small town a few miles from you. They're the only Ford dealer in that town. Everyone in town knows them. When they want to do business with that dealership, they'll search for the dealership by name.

 

Consumers who search for the dealership by city are looking for an alternative. They know about Bob Ricky's Toyota in the heart of town. If they do a search for "Somewhereville Toyota Dealers" or "Toyota Dealers Near Somewhereville", you'll want your dealership to pop up. People that do searches like that are trying to find someone else from which to buy their Toyota. If they wanted to buy from Bob Ricky's Toyota, they would have searched for "Bob Ricky's Toyota". They didn't. They want someone else. They want you. If you're ranked for that search, there's a good chance they'll check out your website to see if they can do business with you instead of Bob Ricky.

 

Unfortunately, the OEM-mandated search marketing products aren't designed to help in this regard. In many ways, they're designed to prevent this from happening.

 

If your goal is to beat the competition, your competition, then don't look to the OEM's search marketing company. Don't just check off the search marketing box and call it a day. Explore your options and see if there's a way to improve your search marketing to focus on helping your dealership the best way you can, by being aggressive and getting your dealership in as many relevant searches as possible.

Views: 769

Tags: Dealership, OEM, SEO, Search Engine, Search Engine Advertising, Vendors, car company, search Marketing

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Comment by Tom Gorham on August 4, 2013 at 11:26am

JD, I read this again and it is more timely than ever.  I wish that I could push this post out to the automotive world.  Dealers cannot look to their OEMs for a competitive edge over their REAL competition.  Nor can they look to their OEM for customer loyalty.  These are very personal and localized ambitions.

I dread the loss of competition in website development.  The result is the dumbing down of progress and competition.  It eliminates innovation and creativity.  It eliminates entrepreneurs... the foundation of success.

What is customer loyalty to the OEM?  It is buying the same brand no matter where.  To a dealer, customer loyalty is buying only from that dealer for a lifetime and/or several generations.  Why would dealers rely on OEMs to decide their fate in the marketplace?

I rely on the manufacturer to provide me with the best product in the world.  I am gratified.  I rely on my dealership to be the best place to buy that product.  And I must sell that to the world.

 

Comment by Alexander Lau on January 4, 2013 at 5:26am

I wrote that incorrectly, I meant: "If you think about it, OEM mandated SEM / PPC is BS. The OEM doesn't "allow" you to compete against one of their other distribution partners or dealerships (your competition). How does that help the individual dealer?" Goes with what Tom said alone the lines of non-compete. Let's say you sell Nissan, do you honestly freakin' think your OEM sponsored SEM campaigns are going to compete against a Nissan dealership 75 miles away. I can almost guarantee you that buffer zone, in between the dealerships, is being ignored, based upon the agenda of the OEM (not wanting upset the cart). A gray area that needs to be tackled by the dealerships themselves. It's all a bunch of BS.

Comment by Tom Gorham on January 3, 2013 at 9:35pm

LOL, good answer... I think!

Comment by Keith Shetterly on January 3, 2013 at 6:26pm

Tom, they've had years of $50million+ earnings to save for a rainy reputation day or bad OEM decision.

Comment by Tom Gorham on January 3, 2013 at 4:43pm

Keith, I am absolutely sure that the real number is higher.  Eventually the OEM or OEMs become the lifeblood of that company on which they live or die.  Who owns who? 

I have often wondered about the wisdom of such an arrangement from the standpoint of the company being mandated.  It must seem like quite a coup when a company manages such an arrangement.  But what happens when their reputation is affected and eventually the OEM moves on?  A little off the subject, but...

Comment by Keith Shetterly on January 3, 2013 at 4:35pm

Ahem.  Let's say an OEM has 4,000 dealers of which 4,000 are using the OEM-mandated website for an average of $800 per month, average $200 for PPC and SEO (b/c some don't particpate), and that the OEM "matches marketing funds" for all of it.  That is $1,000 x 4,000 = $4million A MONTH.  And the only way to differentiate yourself in your market using the PPC program from your OEM-mandated website is to spend MORE, so the average PPC and SEO could be lots MORE, as well.

However, in order not to identify any specific OEMs, this math is also altered to give the scale of the scandal and not to zero in on any one program.

That's $48million a year by this math.  I assure you the real number is much higher.

Tom hit the nail on the head.  It's made attractive because of matching funds, but the truth is that you only provide yourself in a bundle of other dealers in the area on this particular PPC program.

Comment by Tom Gorham on January 3, 2013 at 4:23pm

Keith your analysis is right on.  We live in a competition driven economy.  When a company becomes OEM mandated, it becomes a monopoly (on that segment) which is by nature non-competitive.  Without a need to compete, there is no need for superior results on behalf of a dealer.

In actuality, they don't really serve the dealer.  Their boss or master is the OEM.  The OEM has different marketing goals than a dealer and those are the goals being met by the mandated company.  It is simply OEM marketing disguised as dealer marketing.

Comment by Alexander Lau on January 3, 2013 at 1:10pm

Agreed Keith. Scandalous, indeed...

If you think about it, OEM mandated SEM / PPC is BS. The OEM doesn't you to compete against one of their other distribution partners or dealerships (your competition). How does that help the individual dealer?

Comment by Keith Shetterly on January 3, 2013 at 1:06pm

Take a look at your OEM-mandated website and their PPC program.  Ask to see the text of the ads (they will fight).  Ask if the text of the ads is the same between all same-brand dealers in your area (it is).  When cornered, they will tell you that the adwords being bid on are also the same.  Now, different PPC companies can come up with similar (same, even) adwords to bid on, but the text which is the CLICK DRIVER can be a huge differentiator.  Essentially, if I ran a PPC company providing to five GMC dealers in a large metro the same text, adwords, and bidding process . . . well, wouldn't that be scandalous?  Especially if I was an OEM-mandated website provider AND my offering qualified (of course) for matching funds?  This happens every day, and its a "screwing dealers" scandal that (in proportion) dwarfs everything folks complain about re: different vendors of other "essentials" (i.e. CarFax, etc.).  So, to sum up, JD's post is right on the money.  So much money, in fact, that I've seen few ready to talk about it.  Thanks JD!

Comment by Alexander Lau on December 10, 2012 at 5:53am

In terms of OEM mandating, I'm unsure there will be an option in the future. From the looks of it, OEMs are going to try and take everything into their own hands, which includes controlling how a dealership markets themselves. In their eyes, they can do it better. I'm unsure if that's true.

Agreed, it depends on the size of a dealership and what they predominantly sell, new versus used, size of dealer, brands they sell, etc., but this is the way I see it going.

[*Sarcasm ] -- Why not...? They already have systems in place for web content management system  and hosting through weak digital marketing companies like Dealer.com and Cobalt / ADP. Why not just throw everything into one basket? Especially for digitial marketing for OEM / child sites. I suppose a dealership will always have the freedom to control their own websites (portal), however, why segment the effort if all of your other sites are being marketed through a 3rd party of the OEMs choice.

In terms of what 3rd parties website solution providers offer, I think there is a massive difference. As mentioned in the article, there are those that take into consideration lead and conversion production better than others. Those that are certified through Google. Those that have a better understanding of the retail industry and those that pick up their phones when you call them and return E-mails, etc.

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