10                                               Dealer Marketing Magazine   October 2006

     How SEM works for
     Cou...
12                                               Dealer Marketing Magazine                                              Oc...
October 2006                                       Dealer Marketing Magazine                                              ...
14                                                         Dealer Marketing Magazine                                      ...
Automotive SEM by Ralph Paglia
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Automotive SEM by Ralph Paglia

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Automotive SEM by Ralph Paglia

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Automotive SEM by Ralph Paglia

  1. 1. 10 Dealer Marketing Magazine October 2006 How SEM works for Courtesy Chevrolet 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 campaigns. 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 and month. These reports are sent to management by Google via email. We use unique
  2. 2. 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
  3. 3. 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 tising impressions 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 process. 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 know. • 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.
  4. 4. 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 sales@autodealertraffic.com sean@bzresults.com sales@cobaltgroup.com sales@dealer.com Jason@dealerskins.com www.AutoDealerTraffic.com www.bzresults.com www.cobaltgroup.com www.dealer.com www.dealerskins.com

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