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Why Do You Use PPC-No Seriously Tell Me?

I am going to make my best case for why PPC is a total waste of money in the automobile industry, and I invite you, the dealerships, or PPC salespeople to join the fun and make your case. This should be some fun, let’s keep it clean, and professional. In the interest of full disclosure I of course sell SEO, in many ways a direct competitor for PPC marketing dollars. (Even though we don’t agree with the logic) We do feel dealerships should do some PPC, as well as SEO, the problem we see are so few dealerships invested in SEO because there isn’t immediate results. So in the spirit of the holidays, let’s get this rumble going!


PPC Is a Total Waste of Money


Yes that’s right I said it! Spending money on pay per click advertising is a waste for so many reasons. It has the staying power of a two year old newspaper ad. Although we do concede that targeted PPC can be quite effective, why on earth would anyone invest in something that will continually cost you money? Your cost per acquisition will always be there, and the second you stop paying for it, your customer will disappear. The fact is, even when PPC is executed perfectly, high quality ad copy, great converting landing pages and great follow up, you are still paying for every single click.

If dealerships can see that buying third party leads is a dead end, why can they not see PPC as the same thing? You get no long term marketing benefits for your investment, and depending on the market you may or may not even have a chance to close those leads you are paying upwards of $20.00 each for. We really want someone to make a compelling argument against this logic! In an era where dealerships are trying to cut costs and maximize their return on investment, how can paying for clicks possibly fit that business model? The sad thing is it still does for many dealerships.

Keep this in mind, in most markets you are bidding against yourself, OEMs are pouring piles of cash into online advertising and at least the big three all spend on PPC, why would you bid against yourself? It just doesn’t make sense, bidding against your local marketing group for the same customers? If you pull back and really look at PPC, your bidding against yourself by bidding against OEM’s, bidding against lead generation companies who want to sell you your own leads, and your competition all in the same market!


PPC Offers No Real Long Term Solution

Yes, that’s right PPC is a band aid, a temporary fix for lack of traffic to your dealership website. Google and other search engines are built to serve up the most relevant sites, so why isn’t your site coming up in the top position? It isn’t relevant, we don’t mean to poke fun, and are apprehensive to make such a blanket statement, but the fact is its true. It’s not really the dealerships fault, it’s the website providers and their misleading talk about how their sites will be great for SEO, dealerships believe it and even pay for “SEO” from their website providers.

A perfect example of this is Cobalt, (not to pick on them, there are plenty of other offenders) charged one of my clients for “seo services” for months, and never even bothered to customize the Meta descriptions and title tags. Within 3 months on our smallest package he had increased his organic traffic 300% and that hasn’t gone away. He has since stopped PPC advertising and diverted the money to SEO seeing similar increases consistently each month. The fact is, PPC is great for getting dealers all excited about “traffic” to their websites, but it doesn’t offer any real long term solution to the overall problem due to their lack of relevance. The important thing to know here is that if our client fired us tomorrow, he would still continue to receive that extra traffic, each and every month, generating more leads, and ultimately more sales. Let’s see PPC do that!


The ROI in PPC Pales in Comparison To SEO

The three letters driving any good dealership are ROI, we don’t disagree that PPC advertising can provide positive ROI. What we are saying is that it pales in comparison to the ROI a dealership will see with a good SEO service. Below we will explain.


Let’s say XYZ dealership is spending 2500 a month on PPC advertising, and generating maybe $5000 in positive revenue, now in our opinion that number is high, but we will, in the spirit of the holidays give PPC some credit. At the end of the year the dealership has made $60,000. (doubling their investment not bad!)


Now let’s say XYZ spend the same $2500 on SEO. For the first several months, the dealership wouldn’t see any results, and lets say perhaps they generate fewer leads, that said leads generated from SEO convert much better and maybe the dealership starts to make $2500 a month after month 3. At the end of year one, they will have made $22,500.


But, now let’s assume after one year you stop spending, PPC’s year two profits will be 0, while SEO will remain and bring you another $30,000. Year two the same and so on, you see a trend forming here? Although these numbers are somewhat arbitrary the point remains the same SEO offers long term increased profitability while PPC only offers ROI today. Turn off your marketing dollars, and SEO continues to run on empty while PPC is out of gas! (Like our car reference?) In the real world dealerships have limits on what they can spend and often times two solutions will have positive ROI’s but the key is looking long term.


OK PPC people bring it on!


Jeremy Hambly
SEO For Dealers
www.seofordealers.com

Views: 14

Tags: click, engine, gen, internet, lead, marketing, oem, optimization, party, pay, More…per, ppc, search, sem, seo, third

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Comment by Ralph Paglia on December 1, 2008 at 9:00pm
Just make sure you point the ad to the actual vehicle inventory detail page, and that you have forms on that page, as well as VERY obvious and easy to see phone number... Preferrably to your personal cell phone!

Don't be afraid to use a large number of keywords, such as 2008 Mustang Shelby, Mustang Shelby, Shelby Mustang Gt, 2008 Ford Mustang, 2008 Mustang, and every variation using Adwords Keyword Tool...

The key is that because the ad is written for specific vehicle, you can go after a wider range of keywords, since the odds are that unless someone is interested in THAT specific Mustang you describe in the sponsored link, they most likely will not click on it... Or, use up your budget.
Comment by Mike Warwick on December 1, 2008 at 8:02pm
Ralph - I'm going to try this tomorrow. I have an 08 Shelby GT Automatic with 1200 miles that is perfect for a National Campaign!
Comment by Ralph Paglia on December 1, 2008 at 6:24pm
Great post from Mike DeCecco,

However, in the spirit of constructive debate that advances all of us who participate in these discussions, i would like to take exception to one issue Mike raises (but then immediately semi-redeems himself), and that is when Mr. DeCecco states:
"If your PPC service is not measuring the lead generating ability of every keyword they buy for you and bidding based on the actual effectiveness of the words, then find another company because you will see lower conversions because you’re blind bidding."

In my personally extensive experience of using both a hands-on manually managed approach, as well as some fairly sophisticated Search Advertising Optimization Applications, I have come to the conclusion that there are several factors that far outweigh the "keywords" themselves as the sole and single cause of success or failure for PPC bids converting into phone calls and submitted web forms on a cost effective basis. What i have seen is that the nature of the message, as stated in the actual search advertisement (sponsored link) and the corresponding landing page and it's continuation or completion of the offer hinted at within the sponsored link itself, has FAR MORE IMPACT on conversion rates than the keywords being bid upon...

Let me illustrate... For example, i was working with a dealership in the San Francisco Bay Area and we decided to experiment with different search advertisement "constructs". Using an "A-B" strategy, we created 2 search advertisements, one of which was generic to used Ford Mustangs as a category of used vehicles, as in (I am paraphrasing from memory):

Used Ford Mustangs
Best Selection in San Francisco
See Our Entire Mustang Inventory
www.ABCFord.com

(Ad pointed to deep-link of all used Mustangs as a pre-sorted search result)

The other ad we created was something like this:

2006 Ford Mustang V6 MPG
Red Sport Coupe, AC, 14K, Auto, FI
Like New, Bose, Full Ford Warranty
www.ABCFord.com/2635491

(The ad pointed to the inventory detail page for this specific vehicle)

Here's what we ended up with... High Click-Through-Rates (CTR) for the first ad, but very low conversion rates into phone calls and completed web forms... Not horrible, but resulting in a Cost per Conversion of around $82... Which is actually not terribly poor and we did get some appointments...

However, the second ad, for the specific Mustang, had a CTR of about 10% that of the first ad, with a conversion rate that was OFF THE CHARTS! Try between 20% to 30% depending on the day and the geotargeting! Oh yeah, we sold that V6 Mustang the first weekend after my visit to the dealership...

NEXT SCENE; I was at Dick Smith Ford near Kansas City, MO when their deal on one of only 1,500 or so 2008 Ford Mustang Cobra KR's fell apart due to financing (August 2008). I thought back to the lesson we learned in San Francisco and convinced the dealer to run a NATIONAL Search Advertising campaign with an ad that listed the vehicle and the serial number... With the ad pointing to the inventory details page for the Mustang KR inside the dealership's web site. After about $600 in clicks over a 48 hour period, one of over 100 phone calls/web forms was a woman calling in from Los Angeles... She arrived that weekend and paid $25,000 OVER WINDOW STICKER for the Mustang KR.

So... Does the content of the ad itself matter? DOH!

Does the landing page and the offer it contains matter? DOH!

When do I SERIOUSLY use PPC Seacrh Advertising? When I REALLY need or want to sell a specific vehicle!
Comment by Mike DeCecco on December 1, 2008 at 4:41pm
Hi guys:

Saw this same post on DrivingSales and thought I would post my little rant here. Ralph, I loved your comment on on Quality Scores... right on. Quality content will always be king and when coupled with targeted SEM... watch out!

I wanted to post some thoughts on PPC advertising. In our opinion, to not do any PPC is a very flawed strategy. Sure, we sell PPC, but think about it….. The worlds leading online retailers in every vertical imaginable all do tremendous amounts of PPC. Could they all be wrong ?
The most sound strategy a dealership can undertake is to be strong in both SEO and PPC. If you’re doing PPC at the dealership, it can be extremely cost effective and targeted if you’re using the right platform.
The immediacy of PPC is it’s perhaps strongest asset. I agree that it doesn’t provide serious long-term branding other than your ads continuing to appear as long as you’re paying, but that’s not the point.
If you’re running a special promotion and want the word out now and want to put your ads in your competitor’s marketplace now, then geo-targeted PPC based on sounds bidding architecture is incredibly powerful.
Of course you should have a strong SEO base and be paying for an advanced service, but no SEO service can get your message out in seconds to a targeted market and allow you to measure you’re results effectively.
With our system for example, you can build out a PPC campaign in minutes for your specials, put a budget behind it and have it launched on Google in literally less than 3 minutes. You can then measure every phone call, click through, and lead conversion for that specific campaign. This level of speed to market and measurability with SEO is not possible.
If you’re a dealer and you’re thinking about cutting advertising costs, drop some more print, cancel a few radio spots and, maybe a TV ad and take that money and invest in measureable media like PPC and watch you’re ROI grow dramatically.
In my opinion, the last thing any dealership should be doing is dropping their PPC spends. They should be creating a strong balance of managed SEO and targeted PPC.
Now, to the point about horrible conversions….
If your PPC service is not measuring the lead generating ability of every keyword they buy for you and bidding based on the actual effectiveness of the words, then find another company because you will see lower conversions because you’re blind bidding.
Your campaigns should also point to specific pages that are incredibly relevant to key terms… not just your homepage. If you’re campaigns are targeted for specific needs, and landing your customers on the right pages with multiple calls to action, specific phone tracking numbers, and strong shopping tools you’ll see some of the very high conversion rates many of our PPC clients enjoy.
Anyway, as a final thought…. PPC is not going away and it’s all about how you engage with it that will make the difference.

Always a pleasure to being part of such a dynamic group of really savvy folks...
Thanks!
Comment by Ralph Paglia on November 30, 2008 at 7:51pm
Jeremy,

For all practical purposes it is IMPOSSIBLE to build effective Search Advertising Campaigns without putting a certain amount of attention into SEO "Housekeeping" because the minimum bids required to get your search advertisements (sponsored links) to appear are heavily based on Google Adwords "Quality Score"... AND, the quality score is highly weighted towards landing page quality, being initially based on indexable content, and then highly impacted by post-click consumer behavior after the ad generates some CTR... Ultimately, the same content, title, meta, domain name and other factors that impact organic ranking also have a significant impact on the Google Adwords Quality Score, and the overall effectiveness of any PPC Search Engine Advertising campaign... Whew... The bottom line is that to engage in PPC Search Advertising without setting up all the same content and keyword SEO "housekeeping" items would be a tremendous waste of money... You get a lot more bang for your PPC buck if you optimize your landing page content first and then construct your Search Advertising Campaigns to optimize your bids on the keywords that your campaign has the highest quality score ratings for... THAT'S WHY I LIKE MICROSITES, so the Search Advertising Campaigns can be optimized for a wide range of targeted search queries that the dealer's regular full-scaled all-purpose website does not organically rank well for!!!!
Comment by Indie Results on November 30, 2008 at 4:37pm
great responses, I admit I was intending to be a little inflammatory to try and get a lot of posts, looks like it didn't really work. these are two great responses though. I look forward to you contacting me too, I do focus on white hat techniques, and I of course would welcome an opportunity. I would argue however that ppc should not be the foundation of online marketing, quality content and seo should be, ppc is a great add on though.
Comment by Indie Results on November 30, 2008 at 4:32pm
lol I would never call anyone an idiot. I am suggesting however that relying purely on ppc is idiotic.
Comment by John Phillips on November 29, 2008 at 12:04pm
Mr. Hambly:

Presently there is lots more to PPC than ever before, and Best Practices have proven that SEO and PPC work together to provide a synergestic environment of trust and confidence to those searching for a new car. With that said, our core business is PPC, but we outsource SEO to experts (like yourself) who have a "WHITE HAT" approach and plan and do what they say they will do. We look forward to contacting you for our outsourcing program. Now to add a little -- not a lot because it would take too long -- to Ralph's excellent reply.

For just about any business seeking to advertise online, Pay Per Click campaigns should come first and be used to their maximum potential before investing elsewhere. PPC Campaigns are the foundation of most online advertising plans, delivering the most precise targeting and the furthest reach for the lowest cost here at Advantix Marketing -- www.advantixmarketing.com

Simply put for all those reading this blog, the concept of Pay Per Click or PPC search advertising is simple -- you have your listing placed within or alongside search results in exchange for paying some fee each time someone clicks on your listing in those search results. Most search engines set advertisers against each other in auction-style bidding for the highest positions on search result pages.

There are several benefits to Pay Per Click advertising that make it useful to just about any web business, and make it so important that it should be exploited to its fullest before advertising in any other medium.

BENEFIT #1: TARGETING

Targeting is essential to any marketing, online or off. In order to be effective, ads have to reach the right people. If that's not happening, you're just wasting your money.

More than anything else, people turn to search engines to find things they need on the Web. Pay Per Click search engine advertising lets businesses capture these people while they are actively seeking out their product or service. By listing a website under specific search results, advertisers can capture a target audience and pre-qualify them with the ad at the same time. By the time the visitor is on the website, the business knows that they are looking for their product or service and have an interest in the particular offer.

BENEFIT #2: REACH

No matter how robust the radio station, magazine or newspaper, their advertising potential will never reach as many individuals as the top search engines. Google and Yahoo! each reach 80% of the Internet user population and display Pay Per Click ads above and alongside search results. Billions of searches are made every month and Pay Per Click advertisers can easily be listed at the very top of the very first page.

BENEFIT #3: COST

Pay Per Click search ads cost nothing until an interested individual actually clicks through to the specified website. Even with the competitive bidding process that pits one advertiser against another for the top spots at most PPC search engines, costs per click can still be just pennies. If you work out the average cost to acquire a new visitor from other mediums, it'll likely end up higher than the search engine ad without the benefits of precise targeting and pre-qualifying the visit with the ad text.

It becomes clear why Pay Per Click advertising should be the foundation of an online advertising plan when you consider the combined benefits of the targeting, costs and reach of this medium:

• There's no guessing how many visitors will result from an advertising spend. Since the advertiser sets the click price, the advertiser can determine how many visitors each dollar buys in advance.

• Conversion rates and ROI are easy to calculate.

• Visitors are pre-qualified before arriving at the specified website by the ad text.

• Ads are placed without long-term commitments or high up-front fees.

• PPC search advertising reaches so many internet users that almost any niche audience can be targeted.

• Ad text can be changed at any time.

PPC search advertising is targeted, affordable and abundantly available. It should be immediately exploited in full, at Google and Yahoo, and then SEO should be implemented in full or even partially before spending money elsewhere, as almost any other medium will be less targeted, less controllable and more expensive.
Comment by Ralph Paglia on November 28, 2008 at 11:18am
I will respond being very specific to how I use Google Adwords Cost-Per-Click Keywoard targeted search engine advertising:

1. Highly targeted by demographics
2. Ability to change listings, links and offers by geography
3. Display specific search ads by (sponsored links) time of day
4. Choise of either Broad based text, or exact search phrase bidding
5. Position preference settings
6. Can use negative keywords to eliminate sponsored ink from showing for undesirable searches
7. Content network placements can be a vible and profitable supplement
8. 100% control by dealer over the actual verbiage liste in the ponsored link by geography, keywords, etc.
9. Direct a specific message to specific searchers
10. Target conquest search advertising that does not appear in dealer's immediate markt area.
11. Target specific keywords that the dealer's other sites do not rank organically well for
12. Many, many more advanatages....

Does your post insinuate that the millions of people spending billions of dollars on Google Search Advertising are all idiots?

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