Acura Adwords Bidding Strategy Increases Online Competition For Franchise Dealers

its-safe

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, 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.

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Brian

Brian Pasch, CEO

PCG Consulting

732.672.2356

Google

Vehicle Search Result Pages (SRP) May Not Be Good Adword Landing Pages

By Brian Pasch

There are many companies that pitch Google Adwords management services based on the premise that their technology will create a better bidding strategy, lower cost per click, and higher conversion rates.

A case in point is VIN level advertising, offered by a number of vendors, that automatically create ads based on each Vehicle Identification Number (VIN) in stock.

In the example below, a consumer searches for a 2011 Toyota Corolla, and two franchise dealers show in the paid search results, shown by the arrows.  The website addresses of these two dealers have been erased for privacy concerns.

For the record, the two dealers listed were a Toyota Dealer and a BMW dealer; both had at least one 2011 Corolla in stock.  VIN level advertising gives hope for the BMW dealer that they can sell off-make used cars from their store through SEM.

Why? The average consumer is not going to a local BMW dealership website to buy a used Toyota.

vin-level-ads

If you are not familiar with VIN level advertising, the Google Adwords ads are created based on the current inventory of a dealership .  The current inventory is fed to the Adwords vendor each day, and vehicle specific ads are created based on current  inventory and consumer searches.

Where Are Vendors Taking Consumers on The Click?

If there is only ONE 2011 Toyota Corolla in stock, the automated Adwords campaigns will normally take a consumer to the specific Vehicle Detail Page (VDP).

However, when multiple cars in stock match the search criteria, consumers are often sent to a Search Results Pages (SRP).  The search results page would show all the “2011 Toyota Corolla” vehicles in stock.  Search Results Pages are a common feature on retail automotive websites.

SRP

However, when I investigated the performance of clicks landing on Search Results Pages (SRP), I have found some very troubling data.  It looks like SRP’s are not a great place to land consumers.  The data indicates that the majority of consumers are NOT ready to dive into specific Vehicle Detail Pages (VDP) from an SRP.

Landing Page Research Indicates THAT Something Is Wrong

I reviewed 20 Adwords VIN Level Advertising Campaigns, that send clicks to Search Results Pages (SRP), and have found that they share similar characteristics:

  • High Bounce Rates – 55-80%
  • Low VDP Engagement – Only 10-30% click to a VDP from an SRP
  • High Cost per VDP View: Over $10 per VDP view
  • High Cost Per Conversion: $50 – $250 per phone call or lead submission

The research we have shared in this article should challenge dealers using VIN Level advertising services to inspect their vendor partners that are using Search Results Pages (SRP) and Vehicle Detail Pages (VDP) as landing pages for SEM campaigns.

It is critical for someone at the dealership to inspect Adwords campaigns designed to sell new or used cars to see what percentage of clicks view a VDP and what is the true cost per conversion.  Many new car campaigns I have inspected, that send consumers to new car SRP’s, have the worst performance metrics!

Please keep in mind that VIN level advertising can be very effective if it is setup properly.  The sad fact is that many campaigns are set on auto-pilot and dealers are not getting the ROI that they were promised.

Dealers Need To Test Alternative Landing Pages

Dealers will likely find that they will need to create custom landing pages to engage the Adwords consumer in a more creative way.  Dealers cannot assume that the consumer who clicks on their SEM Ad is ready to dive into a SRP or VDP.

Dealers must test different landing page designs in their Adwords campaigns; this is not a new concept. Give the visitors from your paid search campaigns more options to convert!  Provide choices that are attractive throughout the entire lifecycle of the sales process.

Ignoring the click path metrics of your Google Adwords campaigns can be very costly. I hope that you will inspect your VIN Level Adwords campaigns based in % VDP Views, Bounce Rate, and Lead Conversion Costs.  Let me know what you find!

Brian

Brian Pasch, CEO

PCG Consulting

732.672.2356

Google