10 Dealer Marketing Magazine October 2006
How SEM works for
Search engine marketing coupled
with an aggressive use of third-party
lead providers has generated a sub-
stantial return for Courtesy Chevrolet,
Phoenix—more than 174 units sold in
120 days at an average cost-per-vehicle
retailed of $412.65.
The dealership, which uses a combina-
tion of business development centers
and dedicated Internet sales teams in
conjunction with a fully integrated
interactive marketing strategy, certainly
dominates the online buying experience
for anyone looking for a new or used
Chevrolet in its market.
The dealership receives more than
6,000 leads a month, of which about
1,500 are incoming phone calls and
the balance eLeads, with 1,000 of that
balance driven by the dealership’s SEM
Ralph Paglia, CRM/eBusiness director
for Courtesy Chevrolet, was asked by
Dealer Marketing Magazine to share
how he uses SEM to drive online shop-
pers through his dealership’s doors.
Q: What results does SEM
deliver? Can you separate those
leads from OEM, third-party, and
other online listing results?
A: We have no problem separating
SEM leads from our other lead sources,
as well as by individual SEM campaign.
We use designated landing pages with
separate lead routing addresses into our
CRM tool as well as specific campaign
source tags embedded into each online
form. This way the leads identify them-
selves as a separate lead source within
our CRM tool.
When we use deep links within our
general purpose Websites (we have
five), we use Google conversion track-
ing code that we asked the Website
providers to embed into the content
that we link some campaigns to. This
results in conversion tracking that is
automatically reported to us by our
Google online applications each week
These reports are sent to management by
Google via email. We use unique
12 Dealer Marketing Magazine October 2006
toll-free phone numbers on each of leads at less than $16 each. Many of our Sometimes, we notice that other adver-
over 40 landing pages, micro sites, and internally managed SEM campaigns tisers run out of SEM budget near the
Websites so that we can also monitor generate leads that cost in the neighbor- end of the month and that creates an
and factor in the phone calls generated hood of $50 to $55, some as low as $30 opportunity to pour on the steam and
by our SEM campaigns. Each phone each, depending on the subject matter scoop up leads at a far lower cost than
call is automatically converted into an of the campaign and how many other at the beginning of the month. The cost
XML data feed that is then routed to a dealers, third-party lead providers, and per lead is then mitigated by sales clos-
specific campaign address within our non-automotive businesses we are ing rates for each SEM campaign.
CRM tool. competing with for keywords or site All our SEM campaigns produce higher
Here’s an example of just one of many placement. closing ratios than what we yield from
SEM campaigns we have effec- third-party lead providers, but
tively executed within the past none of our SEM campaigns yield
year, based on one of Courtesy sales closing ratios as high as our
Chevrolet’s in-house Google full-featured Website-produced
Adwords Campaigns from leads or the leads we get from
December 1, 2005 through the GM Certified Internet Dealer
March 31, 2006: program.
• 33,257,657 car shopper Generally speaking, if an SEM
impressions generated campaign nets us a $600 cost PVR
• 29,528 car shopper or less, we will keep running that
visits to Courtesy Chevrolet specific campaign. SEM campaigns
Websites, landing pages, and that produce sales at a PVR of $300
micro sites or less usually result in us getting
greedy; we start to pour more mon-
• 2,248 electronic leads and ey into it to get more sales, which
phone calls generated we do get, until the cost-per-sales
• 174 vehicles sold hits $600 and then we back off on
• $71,801.30 was invested with the money being invested into that
Google Adwords & Google’s specific campaign.
Display Advertising Website Over time, some of our SEM
network campaigns fizzle out and the cost
• $2.16 cost-per-thousand car PVR starts to go up. Eventually there
shopper impressions are some campaigns we simply pull
the plug on and roll those funds into
• $2.43 cost-per-car shopper other newer or higher-yielding SEM
that clicked through to a campaigns. It is a lot like more tradi-
Courtesy Chevrolet site tional advertising, except that it is far
• $31.94 average cost-per- more profitable and infinitely more
lead generated measurable.
• $412.65 average
cost-per-vehicle Q: Are the leads you
retailed (PVR)* receive from shoppers closer
to the beginning or end of
Q: Overall, what is the sales funnel?
your lead acquisition
cost by source?
A: This is a huge variable
and is often determined by the
A: Our cost-per-lead nature and content within your
SEM campaigns, and has little to
generated by Courtesy
Chevrolet’s various do with SEM in and of itself. A long
SEM campaigns varies time ago, a very wise veteran
by both campaign and car guy told me, “A lead is
by month. For example, a lead is a lead.” And we
our ClickMotive-managed have found that unless the
SEM campaigns produce phone number is wrong or
leads at the lowest cost from the email address is bad,
amongst all our SEM cam- the vast majority of SEM
paigns; ClickMotive produces leads are the result of ads
that only people who want
October 2006 Dealer Marketing Magazine 13
or need to buy a car fill out the online not happen to our SEM-generated SEM-managed campaign efforts that
forms. leads which we own and control. we self-administer using the same on-
We have far more problems with bogus line applications that we use to manage
leads from certain unscrupulous third- Q: What recommendations might sponsored links (search engine ads) and
party lead suppliers who are buying you offer to dealers considering targeted Websites that consumers visit
them second and third hand to sell at a integrating SEM into their total within the Google advertising network.
profit to dealers with little knowledge media mix? 3. Who will be assigned responsibil-
as to how they were produced. That is
why our SEM leads always out-yield
A: The top three considerations that ity for the daily tasks of managing self-
administered SEM campaigns and/or
should be addressed before a dealer
third-party leads, with a few notable begins spending money on any type of monitoring and reporting back on the
exceptions. paid search engine marketing are: results from SEM services providers?
Certain third-party lead providers have The key issue here is accountability.
1. Will the campaigns be managed by Both for internally-run SEM campaigns
sophisticated “scrubbing” technology in-house staff or outsourced to an SEM
and processes that weed out any truly and for any services charged to the
service provider? In-house managed dealership by an SEM services pro-
invalid leads. Dealix, for example, campaigns avoid the various fixed and
does a remarkable job of validating vider. The key metrics that we monitor
variable fees charged by suppliers, but for every SEM dollar spent at Courtesy
phone numbers and email addresses the daily management tasks can eas-
from prospective customers who sub- Chevrolet are:
ily consume an hour out of each day.
mit leads through any of its network Experienced suppliers can often times • Dollars spent by campaign
of sources. If you ever want to see outperform a dealership employee at a
something interesting, go to a Dealix • Total impressions by SEM
rate that more than offsets the fees. campaign
source site and submit a lead using
a valid email address, but a bogus We use a mixed SEM strategy with half
• CPM or cost-per-thousand adver-
phone number. Do that and you’ll get our budget invested into self-managed
an email from Dealix asking for your Google and Yahoo! SEM campaigns,
correct phone number, or asking if you and the other half invested with SEM • CPC or cost-per-click
would prefer that the dealer send the service providers such as ClickMotive
and BZ Results. • Clicks-to-leads submitted (conver-
price quotes by email. sion rate) by landing page, micro
The same thing done on one of our 2. How much of the dealer’s advertis- site, or deep link
SEM landing pages or micro sites ing budget will be allocated to SEM
would result in a lead coming in to and online advertising? That depends. • Total number of leads generated by
us with a bogus phone number. My We have continuously shifted advertis- each SEM campaign
compliments to Dealix; from amongst ing funds away from underperforming • Cost-per-lead generated
the 25 third-party lead providers we media channels and moved those funds
use, Dealix does the best job of scrub- into our Interactive Marketing Budget, • SEM generated lead conversion
bing invalid leads before we get them. which includes SEM campaigns. This rate into showroom traffic (whether
However, this validation process is budget shift has been used to place by appointment, or otherwise)
offset by lead duplication, which does online display advertising within the
SEM Terms To Know
As the number of online vehicle consumers continues to grow, so does their use of search engines. According to J.D. Power and
Associates 2005 New Auto Shopper Survey, 89 percent of online vehicle shoppers used a search engine during their buying
As more and more dealerships look to boost performance from online sales opportunities, search engine marketing, whether
handled in-house or by a SEM provider for the dealership, is gaining momentum.
As you consider SEM for your dealership, the following SEM terminology, compiled by The Cobalt Group, are important to
• Search Engine Optimization (SEO) – SEO is a process designed to attract search engine “spiders” to a Website.
Spiders “crawl” the Web to match consumers search terms with relevant content. SEO increases the odds your site will
get high rankings in “organic” search results, which are free, as opposed to paid advertisements. SEO also incorpo-
rates keywords popular with consumers into your Website copy, making it more search engine friendly. Your Website
provider should supply this service to you.
• Search Engine Marketing (SEM) – SEM is a “catch all” term that includes the different techniques used to get
your Website optimal placement in search engine results. SEM includes search engine optimization, paid placement,
paid call, contextual advertising, etc.
14 Dealer Marketing Magazine October 2006
• Keywords – Keywords are words and phrases used to find relevant Websites. The goal of search engine marketers is
to match their advertisements with popular keywords used by potential customers.
• “Organic” search results (Algorithmic results or natural results) – Organic search results are ads and
Website links returned by a search engine based on the relevancy of the search query to various Websites. If you search
for something with Google, the results you get in the middle of the page are the “organic” listings, while those at the
very top and to the right are paid advertisements.
• Paid listings (paid placement, sponsored links, or pay-per-click advertising) – Advertisers pay to
have their ads displayed at the top, or on the right side, of the free listings, or “organic” search results. Advertisers bid
on keywords in an online auction setting in an effort to get optimal placement. Those that bid more for keywords, and
also get the most clicks on their ads, have the best odds of premium placement in search results.
• Pay for performance – Pay for performance relates to the paid advertising part of SEM. Advertisers pay the search
engine (or Web publisher) when a prospect takes a desired action, such as clicking on their ad, hence “cost-per-click.”
The pay for performance model can work in other ways too, such as the advertiser paying when a prospect calls a
trackable phone number in their ad.
• Cost-per-click (CPC) – CPC is what the advertiser pays the search engine when someone clicks on their ad in
search results. CPC is the most common pay-for-performance program in search engine marketing. While some CPC
rates may seem quite low, around $0.05 or $0.15 per click, they can also go as high as $8 or more. You need to ask
yourself if it’s worth it to pay $0.05, $2, or $8 every time someone clicks on your ad.
• Paid inclusion (trusted feed) – Paid inclusion allows you to pay a per click fee to submit to a search engine or
directory via XML to a Web page(s) that is indexed in organic search results. CPC can occur from paid inclusion.
• Pay-per-call – As noted above, pay-per-call is a pay-for-performance program where the call to action is for the
prospect to make a telephone call (usually to a trackable phone number.)
• Cost-per-acquisition (cost per lead) – Your average cost generated when a prospect calls, fills out a form, sends
an email, or otherwise submits a sales lead. Calculation: Number of clicks it takes to generate one lead multiplied by
the cost per click.
• Cost-per-vehicle retailed (cost-per-vehicle sold) – Your average cost accrued from your SEM efforts to sell
one vehicle. Calculation: total cost of the SEM program for a given month (or set time period) divided by the number
of sales generated from the program in that time period.
• User-centric design (site optimization) – Designing the layout and functionality on your Website in order to
convert visitors into leads. For instance, you can show incentives and special offers on your home page to give added
incentive for your visitor to take action.
Directory of Search Engine Marketing Providers
Auto Dealer Traffic BZ Results The Cobalt Group Dealer.com Dealerskins
325 E Livingston Ave 5 Great Valley Pkwy, Ste 350 2200 First Avenue South 431 Pine St P.O. Box 23088
Columbus, OH 43215 Malvern, PA 19355 Seattle, WA 98134-1408 Burlington, VT 05401 Nashville, TN 37202
614-225-0580 877-297-8728 888-895-2991
firstname.lastname@example.org email@example.com firstname.lastname@example.org email@example.com Jason@dealerskins.com
www.AutoDealerTraffic.com www.bzresults.com www.cobaltgroup.com www.dealer.com www.dealerskins.com