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The Acura SEM Strategy Will Hurt Local Acura Franchise Dealers

By Brian Pasch

Acura's new policy on Google Adwords bidding strategies is an attempt to control click costs in SEM campaigns for their national marketing, regional marketing, and dealer marketing strategies.  Using cost as the justification for this new policy, Acura believes this move will reduce the Cost per Click (CPC) charges in SEM campaigns on Acura related keywords.

The strategy is likely to fail for a number of reasons, which I outline in this follow-up post on Acura Adwords strategy.  This decision comes at an odd time in the evolution of digital marketing.  If we extend Acura's SEM policy to other forms of advertising, Acura could justify preventing local dealers from advertising:

  • on local and regional radio because it is driving up advertising costs for the market.
  • in newspapers that cover large metro areas like the New York Times because it drives up ad costs.
  • on television in major metro areas because it drives up costs.


Acura makes the argument that specific keywords represent "Tier 1" intent which is best served by OEM content and landing pages. They have come to this conclusion based on research from MediaVest, the ad agency associated with Honda and Acura brands.

Are dealers willing to ignore the fact that consumers use broad match keywords in Google for a "yellow pages" functionality to find local car dealers?  If local dealers are not allowed to appear in paid search, does that funnel their local leads through Acura's lead program and generate additional costs to dealers?

Limited Protection of Positions 1-3


Acura Tier1 ads can only hold one position out of the top three spots in Google Adwords.  This leaves competitors and third party lead collection sites to advertise in key positions 2 and 3 without fear that Acura franchise dealers will buy those keywords.  Here is a search result for one of the keywords reserved for the OEM: Acura Auto

acura-auto

You will see that Lexus (green) is willing to purchase this "reserved keyword" as well as Edmunds (red).  Is this the best strategy for Acura?

Shouldn't a local dealer be able to be in position 2?  Since Google knows the URLs of all franchises associated with Acura, a high quality LOCAL dealership landing page could easily beat out unrelated listings.

QUALITY SCORE IGNORANCE


The Google Quality Score of landing pages are important factors in keywords costs and most OEM's have not invested in creating high quality landing pages.  Competitors and third party automotive portals have been students of SEO and SEM for years.  They know how to create high quality, consumer facing content that can yield a high quality score.

Let's do a search for another reserved (banned) keyword: Acura Cars

acura-cars

For this keyword you will see two competitive brands easily sitting in positions 2 and 3.  However, take a look at the second ORGANIC position for this keyword; its occupied by Cars.com (green).

Google obviously considers this page from Cars.com to have high quality.  It would NOT cost Cars.com a high price to buy the word "Acura Cars" in their Adwords campaign and point clicks to this page.  It would have a very high quality score and filter traffic to their website.

CONTROLLING MARKETING INNOVATION


The ability to dissect keywords by intent and reserve those keywords for Tier 1, Tier2, and Tier3 SEM campaigns sounds like a nice idea in a socialist world, However, this is the United States where entrepreneurs are rewarded for developing local marketing campaigns that make their local franchise profitable.  The strong can also survive if they are able to innovate and dominate.

The attempt at limited SEM campaigns, while other forms of media are not restricted, seems like a "knee jerk" reaction to someone building a case that our free market system is driving costs too high and delivering a poor experience for consumers.

I'm calling bullshit on that claim.

I understand the need for OEMs to have a consistent offline and online marketing strategy that supports the brand. However, I would not place this SEM keyword strategy in the top 10 things Acura can do to increase market share and/or improve the online customer experience.

What is a better use of Acura's marketing team?

I would start by co-oping dealer education of digital marketing, phone skills training (i.e PhoneNinjas.com), and internet sales process.  In these three areas, more profits are lost, by a factor for 20:1, compared to the costs associated with a perceived increase in SEM click costs.

Who cares how many extra pennies SEM clicks cost if dealers don't answer the phones properly or respond to leads in a timely and professional manner?

What do you have to say Acura dealers?  Honda dealers, get ready this may be coming your way as well.

brianpaschnewheadshot

Brian

Brian Pasch, CEO

PCG Consulting

732.672.2356

Google

Views: 789

Tags: acura, marketing, sales, sem

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Comment by Brian Pasch on April 16, 2014 at 9:03am

Automotive News did a piece on this very important conversion this week.  Read David's story here: https://www.autonews.com/article/20140414/RETAIL03/304149969/honda-... 

Comment by Thomas Reidy on March 28, 2014 at 10:39am

Thanks for your input David.

Comment by David DeSantis on March 28, 2014 at 8:02am

First, awesome article Brian!

Second, dealers are franchisee's, and just like any other franchise segments in the US.  You're at the mercy of the franchisor.  The manufactures have absolute control, and power how things are done at the franchisee level.  Ford, and GM flexed their muscle by demanding dealerships update/redesign their facilities, or risk loosing their franchise.  Auto dealers, yes are retailers, however not in the same sense as traditional retailers.  By that I mean retailers like Walmart, your local grocery store, etc.  The product manufacturers do not dictate what happens with their product at the store level, the retailers do.  

Franchise business models are great, however again the biggest negative is that the franchisor has the authority to dictate exactly their will on the franchisee.  Auto manufacturers do not spend ad money, without a plan to recoup it.  In this case, Acura is attempting to funnel buyers to its site, and if a lead is generated, they probably sell it to the dealers.  I'm speculating, but they probably sell the same lead to all dealers in a certain mile radius.  Why?  Because they can!

For the comments/questions about dealers being required to use a specific website company's platform.  I would think, absolutely they would be doing this, and it's obvious why.  The manufacture wants to have access to their dealers website data.  They may want to look at traffic, or lead information etc.  Manufactures have allowed dealers to do what they want as far as their website provider, etc.  Go start a Subway, or any other franchise, and they are going to tell you exactly what equipment you're going to buy.  They absolutely will dictate what POS equipment, and program you're going to use.  Why?  Because it's control and monitoring, and that's not necessarily a bad thing.

Comment by Alexander Lau on March 28, 2014 at 7:03am

Improving targeting and segmentation approaches to boost conversion

http://www.smartinsights.com/digital-marketing-strategy/customer-se...

Comment by Alexander Lau on March 27, 2014 at 6:34am

@Manny, of course, GM is going to start forcing the hand of dealers. Pressure, pressure, pressure, 10 years from now, there will be no small companies supporting dealer websites. Watch!

Comment by Thomas Reidy on March 27, 2014 at 4:10am

Bruce and Manny, good questions; also, do the emerging OEM restrictions apply to promoting the dealers' used-inventories?

Comment by Bruce McFarland on March 26, 2014 at 6:43pm

So what's to stop Acura dealers from paying affiliate marketers to drive traffic to their sites? Affiliates are not bound by the Acura SEM restrictions.

Comment by Manny Luna on March 26, 2014 at 6:06pm

Breaking News!

was just told Chevy dealers in Denver can no longer use any other website platform than Cobalt. Chevy dealers cannot use any other website provider as a secondary site. 

Is this true?

Comment by Alexander Lau on March 26, 2014 at 10:20am

My question: Why would this surprise anyone? The OEM's have the money, they understand where they sell the most cars, so why wouldn't they attack it?

In terms of OEM landing page optimization, they are either uneducated or simply don't care, one of the two or potentially a combination gradient. It doesn't surprise me, there are loads of corporations and large companies that ignore the need to test their landing pages for better lead production / conversions. 

Here are my favorites: https://www.optimizely.com/ and https://www.leadpages.net/products/. Hmmmm, it makes me think I should partner with one of them and white label their software like we do with reputation, social, seo, etc. 

I say that, because there are no dealers on this site. :-)

Comment by Louie Baur on March 26, 2014 at 10:09am

Chip - I believe he did and yes you can:)

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