Reprinted from Automotive News

Dealers refine Google paid-search strategy, slash online marketing fees

Prices for Google paid search — a powerful digital marketing tool for auto dealers — have moderated in recent months after a big run-up in the previous two years, dealers say.

Part of the reason is that dealerships have become smarter in choosing different, lower-cost key word combinations that drive traffic, and staying away from words and phrases that don’t work. Asbury Automotive Inc., the nation’s seventh-largest dealership group, has cut Google paid-search costs in recent months by choosing less expensive words and phrases that still attract shoppers, said Ryun Pavlicek, Asbury director of retail strategy.Paid search works like this: Dealers bid for key ad words. When a shopper chooses those key words in a search, the dealer’s ad appears in a shaded box on Google search results. If a shopper clicks on the ad, the dealer pays Google the price of that winning bid.

Asbury, which has 80 dealerships, pays an average of $1.47 nationally whenever a shopper clicks on a Google ad that carries the shopper to an Asbury dealership Web site, Pavlicek says. That’s down from $2.47 per click 14 months ago.

Asbury, a relative latecomer to Google advertising, got serious about advertising on Google and other search engines 18 months ago when it hired a third-party vendor, Haystak Digital Marketing, to handle the bulk of that chore, Pavlicek said.

“Our costs have trended down as we’ve gotten better at” ad words, he said.

Another support metric we actively measure is the number of times account managers communicate with their clients. Frequent communication is critical to campaign performance and customer satisfaction.

“Pavlicek said vendors can be critical to results because they have the time and expertise to identify the best-performing key phrases and measure how many visitors the strategy is driving to adjust words and spending on the fly.”

Luring shoppers
Asbury’s experience is being repeated across the industry. Dealers big and small have discovered the power of search engines to drive shoppers to dealer Web sites, a crucial step in what typically is a months-long buying process.Once a shopper enters a dealer Web site, he or she is enticed by vehicle specials, engaged by live chat and encouraged to leave contact information, or a lead, that salespeople can follow.

As the world’s dominant search engine, Google is a key resource to dealers. Two of every three visitors to dealer Web sites go there directly after doing a Google search for vehicles or dealers.

Only in the past two to three years have dealers and auto manufacturers pushed heavily into paid search as they have shifted money to online marketing from traditional media such as print, TV and radio.

That paid-search demand initially caused a spike in prices. But that has calmed down as dealers have learned to be better buyers of words, dealers say. With a greater variety of words and word combinations seen as desirable options, supply and demand dictates that the price of individual words and phrases goes down.

Dealers, factories and third-party lead generators fight for visibility at the top of a Google search page by bidding for popular vehicle key words and phrases such as “2012 Ford Mustang Chicago” or “Toyota Camry Columbus.”

Paid search differs markedly from banner advertising. Banner ads typically are purchased upfront for posting on Web sites. Paid search appears in shaded boxes on Google and other search engines above and to the right side of free search results, also called organic search. Google calls its key words and phrases AdWords.

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