A well-tuned Google Adwords (PPC) campaign is extremely effective in generating car sales leads. Pay per click advertising, when combined with a good landing page, can deliver an excellent ROI. Google display and banner ads, even when they are not clicked, can also increase brand awareness in your local market. If you are not using Google Adwords, you are making your competitors very happy.
During difficult economic times, everyone is evaluating their spending, so I thought I would comment on what I have observed in September and October managing dealer SEM campaigns. In the past month we have seen the most volatile sessions in the history of the stock market. We have seen great companies collapse and other tossed away like dirty rags. It’s a scary time for consumers and for car dealers. This fear is manifesting itself in consumer click behavior.
For car dealers, PPC beats the pants off a full page ad in a local paper. It has more quantifiable results than radio or TV. Many of my car dealer clients have pulled out of the typical Sunday ad section. The money spent on a full page newspaper ad in New Jersey may cost around $2,000 - $3,000 depending on the paper and the results are very hard to track. That same investment in PPC would yield traceable sales results and help to develop your Internet cost per new retail sale.
Economy is Changing CPC rates
In the past month, my automotive clients have actually seen an increase in their costs per click (CPC) and a decrease in conversion. Bids for popular keywords have risen about 20%. My guess is that more car dealers are shifting the ad spending to the Internet. It may also be that dealers are more desperate and throwing money at the Internet without a true digital marketing plan. The costs per click for some keywords are becoming absurd.
In this economy there are more window shoppers than buyers. The data that I am seeing would indicate that dealers should test specific PPC ads vs. more general PPC ads. Dealers should also test different messaging for used cars since used car sales are on the rise. With CPC rates rising, its important that your ads don't attract unqualified buyers.
For example, a Google ad that says “Ultimate BMW Car Sale” may generate a lot of clicks and costs but few leads. In this economy, I would suggest that you test a general ad with an ad that is more specific. A specific ad would be “08 BMW X5 $450/m”. The idea is that if someone could only afford a payment of $300 a month, they will not be clicking on your ad and wasting your money. You can repeat this type of ad test for each model you sell and make sure that ad goes to a model specific landing page.
Free Offers Can Burn Cash
We manage the SEM campaign for an award winning Australian winery. Mollydooker winery tested a free shipping offer on Google this week and had to pull it after 2 days. The ad’s curb appeal was great and generated double the amount of clicks, but the offer resulted in very few purchases.
In this case, I think that people are cutting back on non-essentials. They "act" like they may buy but in the end they are just shopping. In the Mollydooker example, I get the feeling that consumers are deciding to buy a few bottles of wine locally compared to buying a full case online. When things are great, people don’t mind stocking up on good wine. Today, when cash flow is tight, even free shipping is not enough to get their wallets open.
SEM is actually achieving excellent click rates in this crisis, but the "offer" should be refined to compensate for the fact that there are more tire kickers surfing the Internet than those who are ready to buy. To run an effective Google PPC campaign there should be one standard operating procedure: test and test again. As long as you are testing your ads you will avoid spending good money on bad ideas. Don't start a PPC campaign and let it run unsupervised, it could be costing you more than you realize.
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