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New Research: “Deep Linking” Delivers Twice as Many Real Shoppers – and Twice the Shopping Engagement of Traditional SEM Campaigns

LotLinx Data Indicates That Car Dealers Need to Re-think Where They Target Paid Search Advertising Traffic and What They Spend

 

New Orleans, LA,  January 25, 2014 – LotLinx, developers of the auto industry’s first deep- linking inventory serving platform, today released key findings at the 2014 National Automobile Dealers Association Conference from a national Dealer Tracking Study comparing Google AdWords’ campaigns against a new search strategy: Deep Linking inventory results on over 100 leading auto vertical search sites. The results of this month-long research were eye opening: while Google AdWords spend was significantly higher, driving more raw clicks per dealership (736 vs. 489), inventory syndication at shopping search sites drove double the rate of true, in-market shoppers (489 vs. 233). And Google was dramatically more expensive across all fronts, including critical metrics like Cost-per-VDP-View ($18.55 vs. $3.17) and Cost-per-Shopper ($73 vs. $3.95).

“Since Google AdWords launched in 2000, dealerships have spent literally $billions to drive direct-to-site traffic. Search engine marketing (SEM) currently represents 55% of their total digital spend[1],” said LotLinx Founder Len Short.  “But the auto Internet landscape, consumer behavior and the shopping funnel have profoundly changed over the past decade and inventory search is now the #1 online auto shopping activity.  This research takes a hard look at how that Adwords spend delivers vs. a Deep Link strategy.”

 

How the Test Worked: The study was conducted among 55 nationally representative dealerships in November 2013. Google Analytics data was used for monthly keyword spends, and all comparative site metrics like monthly visitors, VDP page views, etc.  Dealerships’ live inventory was syndicated[2] at 130+ popular auto search sites – these 130+ inventory-search sites reach the vast majority (85%) of auto shoppers each month and excluded classified sites like AutoTrader and Cars.com, which don’t allow shoppers to click through to dealer site VDPs.

 

KEY FINDINGS:

 

PPC vs. Search Site Inventory Syndication: Shoppers vs. Visitors (Monthly)

 

                                              Visitors   Shoppers   %Shoppers   %New       Monthly Cost

Inventory Syndication             489          489            100%           94%           $1,933

Google AdWords Total/Avg[3]  736          223             30%            81%           $17,444

-------------------------

 

Inventory Syndication Drives FAR More Shoppers: This chart clearly reveals that while a hefty Google AdWords spend delivers dealerships traffic – it is inventory presence on auto search sites that delivers far more true shoppers. The average dealer reported that while AdWords delivered 50% more monthly visitors (albeit at a much higher cost-per), a deep link inventory syndication strategy drove 120% more actual shoppers a month. “Shoppers” are defined here as people that navigated to the dealership site via a specific inventory listing, or went on to search inventory at the dealer’s site, i.e. viewed a VDP (vehicle detail page).

 

One hundred percent of visitors delivered via inventory postings at auto vertical sites were identified as real shoppers, more than 3 times the rate of visitors from AdWords: 2 in 3 Google ad-clicks result in a “bounce”, or non-shopping activity (i.e., seeking service, contact or general info.) Worth noting is that competitive keyword campaigns (where dealers spend 2/3 of their PPC dollars, bidding competitively with OEMs, third-party sites and other dealers over key terms) represent the highest per visit cost, and yet deliver traffic with the lowest percentage of shoppers, and the lowest VDP views per visit.

 

This visitor/active shopper AdWords divide indicates that car shoppers tend to rely on Google at the early or “discovery” stage of their shopping journey (1-6 months out from purchase). Google’s own research[4] validates these findings: the #1 thing car shoppers use Google for is “to obtain general info,” while only 19% use it to research where to buy.

Inventory Syndication Drives More New-to-the-Dealership Consumers: This new dealership data indicates that the majority of site visitors (94%) generated by inventory syndication represent consumers that never visited the dealership website before – while Google AdWords’ campaigns drove a lesser, 81% new traffic. Inventory exposure across “shopping search” sites drives both more – and more new – customers for dealers.

 

PPC vs. Inventory Syndication: True Cost of Shoppers & VDP Views (Monthly)

 

   VDP Views    VDP Views/Visit    Mo. Cost     Cost/VDPView  Cost/Shopper

Inventory Syndication        609             1.08                $1,933                   $3.17             $3.95

Google Adwords Total/Avg[5]      900             1.06                   $17,444                 $18.55                 $73

-------------------------

 

VDP Views Cost 6X More with AdWords: Research from Cobalt[6] shows that VDP views trounce all other behavioral metrics in identifying the very lowest-funnel shoppers and a looming sale. Of course, unlike AdWords traffic, all visitors generated via deep link clicks have already viewed a dealer’s VDP, and the chart above shows that they subsequently view more vehicle detail pages per visit (1.08) than visitors generated by the average AdWords campaign (1.06 views/visit).

 

AdWords campaigns delivered more VDP views/month/dealership than an inventory syndication strategy (900 vs. 609), but at a dramatically higher cost. The real cost to drive a VDP view via AdWords was $18.55, while driving one via inventory syndication at shopping search sites was a low $3.17 – six times less expensive.

 

Cost-Per-Shopper 19X Lower through Inventory Syndication: And the cost differential for a dealership to generate a true shopper (i.e., one actively searching a dealer’s inventory) was even more extreme: $73 via AdWords campaigns vs. only $3.95 through broad inventory syndication. So, while dealerships have been narrowly focused on cost-per-click metrics, touting the couple of dollars it costs to drive a visitor, this new data indicates that the key, new metrics that should be added to all AdWords (and digital marketing performance) reports are Cost-per-Shopper (CPS) and Cost-per-VDP-View (CVV). In this head-to-head comparison, inventory syndication at 130+ automotive shopping-search sites drove twice as many shoppers to dealership websites – at an overall cost of 8X less a month – 6X less per VDP view - and 19X less per shopper.

 

“Dealerships may still be refining their AdWords strategy, but this new research clearly shows that they also need to aggressively expose their inventory outside general search, concentrating on shopping search platforms where 85% of car shoppers find the inventory that leads to a lot visit” continued Short. “This may represent their best opportunity to use technology to improve both sales volume and velocity.”

 

 

About LotLinx

LotLinx is the auto industry's first direct-linking technology platform and connects over 6.5 million consumers searching vehicle inventory online every month directly to the dealership websites where that inventory resides. Founded by a team of veteran automotive and digital innovators, the company's mission is to tear down the third-party wall between dealers and their customers, and provide a more positive and efficient experience for dealerships and consumers alike. LotLinx's patent-pending technology replaces lead forms on third-party sites with direct links that transport consumers searching for inventory directly to the dealer's Vehicle Detail Page (VDP), all at a higher conversion rate and fraction of the cost of other online options. LotLinx is based in San Francisco, CA.

 

Media Contacts
Melanie Webber, mWEBB Communications, 949-307-1723 / melanie@mwebbcom.com
Cassandra Cavanah, mWEBB Communications, (818) 397-4630 / cassandra@mwebbcom.com

 


[1] Dataium report, “Rethinking Online Media Attribution,” 2012

[2] Dealership inventory syndication to these 130+ sites was performed by LotLinx, for a fixed monthly fee.

[3] An average percentage, or aggregated total, combining branded and competitive keyword campaign results and spend.

[4] Google/Compete “Auto Shopper Behavior Study,” 2011

[5] An average percentage, or aggregated total, combining branded and competitive keyword campaign results and spend.

[6] Cobalt Business Intelligence’s VDP Study, 2012

Views: 600

Tags: Adwords, Car Dealer, Deep Link, Google, LotLinx, SEM, Search Advertising

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Comment by Alexander Lau on October 7, 2014 at 8:29am

They're not going to be doing it with keywords, I can tell you that much. Keyword manipulation is going to DIE and quickly!

http://www.mediapost.com/publications/article/235593/preparing-for-...

Comment by Alexander Lau on January 31, 2014 at 6:44am

Deep Links is just one part of a greater digital marketing strategy.

Hey dealers, check out the following and if you're not on board with this, give me a call. I will gladly fix your digital marketing strategy.

Comment by Alexander Lau on January 27, 2014 at 8:59am

Thanks David, we'll be unleashing it in the coming months. However, if you want to do a conference call with our sales manager Dan Ferguson and Paul Accinno (currently at NADA), we can do it. I'd rather not give out the sandbox link, as of yet. Give me a shout at alex(at)worlddealer(dot)net, thanks! The comparison pages alone have sooooooooo much indexing power, it's silly.  Remember, Google's algorithm is about answering questions now and that is what our inventory system will do, it was developed with their algorithm in mind. :-)

Comment by David Addison on January 27, 2014 at 8:09am

Looks cool Alexander.  How do I get a sneak peek?

Comment by Alexander Lau on January 27, 2014 at 7:14am

We're currently building a system that will knock the socks off of any inventory linking / listing platform and this can be made to do the same in terms of deep linking (completely open platform for any dealer inventory requirement). A preferential, decision making engine, that has the best SEO power. 

Comment by Alexander Lau on January 27, 2014 at 7:06am

From what I remember, NING sites give off nofollow's, by default.

Comment by David Addison on January 26, 2014 at 11:54am

A bit off subject and nerdy, but why does Ralph Paglia get two rel=nofollow's on his A HREF in your post below?  Two condoms better than one?  Is this a coding bug with Ning?

Comment by David Addison on January 26, 2014 at 11:23am

Manny, that's a good point.  If dealers do SEO correctly they achieve a high ranking in the SERPs and might be able to spend less in paid.  I don't have anything negative to say about LotLinx. 

In general, I buy PPC and push to syndicated sites because I want my brands to be found where the prospects are looking. I want to be everywhere.  But each piece of "everywhere" needs to stand on its own ROI metric.

I think that a balanced mix is important.  The LotLinx piece is very one sided (e.g. buy LotLinx because of these metrics).  Personally, I advocate for a balanced interactive strategy. That's how "balanced" got into this thread.  We can certainly drop any further discussion about 'balanced'.

I love to see successful dealers. 2K is a sweet number.  Enlighten us.  What is their niche and how did they do it?  Are they all-in with LotLinx?

Sorry, can't help myself.... I LOVE this stuff.

Comment by David Addison on January 26, 2014 at 10:29am

Micah, like what you said about a 'balanced approach'.

Comment by David Addison on January 26, 2014 at 5:28am

Crystal, thanks for sharing. That’s some good data.  I agree with much of what was said.  Notwithstanding, I think that you’re selling a bit too much here.  And that’s okay.  We all sell.  Please don’t take what I have to say as negative or hostile.  I know that we’re all here to help dealers.  Sharing openly in a forum like this is great.

Deep linking is not new.  We all know that linking to the VDP or special pages has higher conversion than the home page or generic inventory results pages.  This is ancient history in the digital realm (so 2004).  That said, it is always good to remind dealers of best practices.

There is no doubt that shopping site traffic has a higher propensity to convert.  Prospects searching on AOL Autos, LemonFree, MotorTrend and the other auto shopping engines are “serious” shoppers.  They’re closing in on the bullseye. This holds true for the non-auto world where the www.mercent.com and www.channeladvisor.com feed services have a much higher conversion rate in shopping than Google SERPs AdWords Ads.  LotLinx is the same deal – a syndication management tool.  Again, higher conversion and lower CPA is not a surprise.

This post, IMHO, makes it seem as if Google is a bad buy.  I would not want Dealers to get that impression. [As an aside, I’m no big fan of Google.  They’re too powerful – a virtual monopoly on search.] Google controls better than 6 in 10 searches.  There is no Google vs. Syndication when it comes to advertising. If you don’t take a Google ad your completion will have free reign over those leads. Dealers need to use Google Adwords, Bing Ads AND a full suite of inventory syndications (emphasis on AND).

Absolute ad efficiency is not the name of the game in auto advertising or any other direct response vertical. As long as you are achieving an acceptable CPA, then continue to spend. This is the way marketers should think about paid advertising in all channels. The issue with the Trada.com PPC model, and any other model like it, is high efficiency = less cars sold.  A big component of the LotLinx pitch is lower cost per visit and increased shopper engagement. I’d like to see more emphasis on a holistic approach.   Branded, Non-branded, Direct, Syndication – PPC, Print, Television, Radio – these are all important.  It is not one vs the other.

Dealers need to cast a very wide net.  By virtue of the advertising landscape, the CPAs will vary.  The end game is to sell more cars. Some leads are on the outer edge of the bullseye target.  These leads are not mature yet.  Exposure to your brand/inventory is super important here. Many of these prospects start with Radio.  Then they move to Google. Then they get to a shopping engine.  The sales path is messy and spaghetti-like.

The study here does not take into account cross browser or cross device traffic.  Those of us who have spent thousands of hours researching this stuff know that there is a ton of cross-over between Google and the syndications. If you attribute the sale to the last click you get a very different picture than attributing to the first click. Syndicated sites are toward the end of the sales journey. This is why they have a juicy CPA.

Smart marketers push all channels to achieve the best results.

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