Automotive Display Advertising: Driving Cost Efficiencies in Search

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http://tier10lab.com/2012/07/24/automotive-display-advertising-driving-cost-efficiencies-search/ - Utilizing a multi-faceted digital approach is key to running an efficient digital advertising strategy. We all know this to be true, but to what extent can we attribute the efficiency gains of running both Search Advertising and Display Advertising simultaneously? [...]

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Automotive Display Advertising: Driving Cost Efficiencies in Search

  1. 1. Automotive Display Advertising: Driving CostEfficiencies in Searchhttp://tier10lab.com/2012/07/24/automotive-display-advertising-driving-cost-efficiencies-search/July 24, 2012By Tim SchmidtUtilizing a multi-faceted digital approach is key to running an efficient digital advertising strategy. We allknow this to be true, but to what extent can we attribute the efficiency gains of running both SearchAdvertising and Display Advertising simultaneously? We took the liberty of taking a close look at the costefficiency gains for one of our clients running the “whole package” and the results were enlightening tosay the least.Let’s take a step back and put ourselves in the shoes of a consumer looking to purchase a new vehicle.Most likely they will begin their car buying process by researching applicable makes and models viaconsumer research reports, automotive forums, asking their friends and family, etc. That being said, atthe top of the purchasing funnel consumers are in the research phase. Communicating with thesepotential customers during this portion of the car buying process is extremely important at the Tier 3 level,as they likely have not decided on a specific dealership to do business with. This type of displayadvertising targeting is referred to as behavioral targeting, and is based on targeting users who haveshown interest in your makes/models via their Internet activity for up to 30 days. In addition to behavioraltargeting, display advertising can target consumers based on the content of the website the ad is servedon, and is referred to as “contextual targeting”. Both types of targeting play a vital role in a successfuldisplay advertising campaign.So the consumer has been researching the makes and models they are interested in, and has seen yourDisplay Ad boasting your low-priced lease offer on the model of interest “following them around theInternet”. This type of display advertising targeting is based on “Re-Targeting” consumers by IP address ifthey have seen your ad previously, or have visited your website. Re-targeting plays a vital role in reachingthe correct frequency of ad impressions, and is crucial in driving more branded search. Once theconsumer has gotten past the research stage and has moved into the purchase intent stage, theseimpressions should prove to be extremely valuable “assists” in driving leads and ultimately sales viaSearch Advertising. Assuming your offer has stood out to the consumer, chances are they will recall thename of your dealership and search for it by name via search engines once they are ready to purchase.  
  2. 2. This is where your conversion tool(Paid Search Advertising) comes intothe equation via capturing theconsumer’s click, conversion, andultimately the sale. Now that we havetouched on how Display Advertisingdrives more branded search, let’stake a look at the metrics showing thecost efficiencies we have seen withinour branded search campaignsthrough running Display andSearch simultaneously, as well asthe reasons behind these costefficiencies.The metrics shown above and beloware from a Tier10 client that startedtheir Display Advertising campaign inApril of 2012. The data shows the month prior to running a display campaign, and the three monthsfollowing where display and search were run together. (All other advertising held constant.)Over this three-month period, we saw a 26% reduction in Average Cost Per Click, shown above inExhibit A. This reduction in CPC can be explained through simple supply and demand. As the DisplayAdvertising campaign began driving additional branded search in April, the amount of times thedealership was searched for by name had increased significantly. During this same period, no additionaladvertisers were bidding on the dealership’s branded keywords. Because of this, Google lowered theprice point for each click, as they want to continue to serve our branded ads each time our brandedkeywords are searched. This is the primary reason why we have seen such efficiencies. Additionally, alarge portion of the branded keyword searches in April, May, and June were “assisted” by display ads, theclick-thru-rate on our brand campaign increased. Due to this increase in CTR, Google rewarded us by assigning higher quality scores to the keywords with increasing CTRs, which as we all know leads to a lower CPC at a higher position. We also saw an 18% increase in click volume, and a 14% reduction in Total Cost from the branded campaign over this three-month period. These efficiency gains stemmed from the increased CTR and reduced CPC due to the addition of the Display Advertising campaign in Q2. As the CTR increased each month, we began seeing increases in the amount of clicks received. If CPC had remained constant, we would’ve seen a higherCTR, but no increase in the actual volume of clicks. Since we were rewarded with a lower CPC, we sawboth a substantial increase in clicks and a substantial reduction in total cost. (See Exhibit B)The take-away from this article is as follows: Display and Search work best when run simultaneouslywith consistent messaging. Follow this simple principle and you will be extremely pleased with the results.Happy optimizing folks! http://www.Tier10Lab.com http://www.twitter.com/Tier10Lab http://www.facebook.com/Tier10Marketing http://www.Tier10Marketing.com  

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