More paid search leads don’t automatically mean more dealership opportunities. Cody Naccarato examines three questions that help dealers investigate where ads run, how paid campaigns affect overall website performance, and whether advertising spend duplicates opportunities organic search already delivers.
Money is like water in automotive. It finds every crack and crevice in the pavement. If standard operating costs like your CRM and your website are slabs of pavement buried in your parts statement, then Paid Ads is a sponge soaking up puddles on the surface.
A well-run Paid Search campaign can complement the rest of your marketing efforts and create cohesion. A poorly run Paid Search campaign is an anchor that drags the rest of your progress down. Think smarter, not harder. Measure your paid ads like an SEO expert by asking yourself the following three questions.
Where Are My Ads Running?
Google. Okay, we’re done here…
Google is a BIG place, right? Did you know there are many different placement types on Google? In the earliest days of Performance Max, one of the placements was on parked domains. Those are websites that are not active but that someone has registered. How valuable are those clicks and conversions, do you think?
We know that the positions with the highest click-through rates are on the Google SERP. Starting with organic positions one through three, you are looking at 30% to 10% CTR on average. The next-highest click-through rates on the page belong to the map pack, which is based solely on the position of the person conducting the search. The number-one position in the map pack has an average CTR of 13%, followed by 11% for positions two and three. That is solely determined by proximity to the location, so there is no optimization to be done.
The Paid Ads positions appear at the top of the page, but that doesn’t mean they are the most impactful. The top Paid Ads position has an average CTR of 3%, followed by 2% for the second position and 1% for the third position. On the outside looking in are the other “sponsored” positions in the GBP and scattered throughout the SERP.
Not all results are created equal. Clicks from the Google Display Network, for example, are much cheaper and can create an artificial boost in your results. Those square image ads that line the side rails of the most disreputable sites? Those are Display Network placements. How many times have you accidentally clicked on an ad when you actually meant to click out of it? Someone got charged for that, ya know! These placements are not going to have the same level of intent as someone searching directly on Google. Display has not ever worked for automotive, and I doubt it ever will.
Ask your paid ads provider where your ads are running. You want to know how these campaigns are structured and get a breakdown of the placements. Most vendors will provide a breakdown at the campaign level upon request, but ask for a breakdown of performance by placement within each campaign and see where your money is really going.
The Question for You: Ask yourself if the results being presented to you are indicative of the reality of your dealership environment. If someone tells you that you received 1,000 sales calls in February, is that congruent with your lived experience? What tools and safeguards do you have in place to capture that information accurately? Is it possible that these calls are not being routed properly? Is it possible that the results are being inflated artificially?
How Is the Rest of My Marketing Doing?
It’s not the job of your paid search vendor to protect the performance of all of your channels. More often than not, their stated goal is to deliver you the best results. The shortest distance between two points is always a straight line, and paid ads vendors are great at driving in straight lines. They don’t always care what they have to drive over to get there because their continued employment is predicated on presenting you with bigger and better numbers every time.
Let’s talk through a scenario. A new paid search vendor comes on, you increase your budget, and in 90 days, you’ve received 250 leads from Paid Ads. You’ve increased your monthly spend, but are those 250 new leads you weren’t getting before? Many dealers are surprised to learn that while their paid search provider may be getting them a slug of leads, their overall lead count from their website is lower.
Do not be fooled by “bigger number, better person.” As we discussed earlier, not all results are positive results. Don’t measure success against the raw number your advertising vendor provides you. You should measure growth and success based on the number of leads, net of what you had on your own before they came on board. Would you spend $5,000 a month for 250 new leads? Many of you would say yes. Would you spend $5,000 a month for 25 leads? I bet all of you would say no.
Ask your website provider or SEO provider to break down your analytics by Session Default Channel Group, and then compare this year’s results with last year’s. Look at your total traffic and then the breakdown by each channel. Then look at your conversions. Are you actually getting more, or are you paying more to get less?
The Question for You: How many leads do you get every month in your CRM from phone ups and your website? Many dealers may know the total close rate from all sources, but many don’t know offhand how well their website actually converts. Not all leads are created equal. What processes and protections do you have in place to make sure your best leads make it to your top performers?
Are We Duplicating Efforts?
I’ve never met a paid search provider who didn’t like to bid on a dealer’s name. Why wouldn’t they? People who are already looking for the dealership? What’s higher intent than that? If I Google “McDonald’s,” it’s pretty clear that I want a Big Mac and not a Whopper. So why run ads on your own name?
In most cases, it’s because these are the campaigns with the highest efficiency and effectiveness. It is the social equivalent of a dating app only matching you with people you’ve been on dates with before. A good chunk of those customers know they want to go to your store because they’ve already done business with you. Are those new customers you’re acquiring? Or are you burning up your budget cannibalizing organic search results just to show up in front of existing customers?
The argument is always the same. If your store’s name is also the name of the city you’re in, you basically can’t help but bid on your name. It’s unavoidable! Cost of doing business. How else are you going to show up in your own town that you’re named after? Organic Search may take time, but its results compound and often far outperform the results you can achieve with Paid Search if given time to thrive.
This is a real example of a Wikimotive client. One of my clients spent 50% of their paid budget each month on their name. Not only did the client rank first in the organic position in their backyard, but they also ranked number one for their name in the entire state of Kentucky and parts of Southern Illinois.
Ask: Are we running ads in areas where we already rank well organically? How can we reduce spend in those areas to get lower-funnel, transactional leads for other queries where the customer might not know they’re looking for us? How can we put our money into areas where we are deficient in other channels so it works better for us?
The Question for You: Agencies have evolved the way they have because clients are often impatient and demand to see results faster than those results can usually be delivered. Are meaningless glamour metrics in a PowerPoint more important than results that will actually generate business? It’s important to hold vendors accountable, but how are you holding yourself accountable for the results they are delivering?
Final Thoughts
You can’t keep a fox in the henhouse and be surprised to wake up covered in down feathers. It is to their benefit to present you with data that only looks positive. A low cost per click, a high volume of clicks, and a smattering of conversions ensure their continued employment. This is the path of least resistance—why make it harder when you don’t know the difference anyway? Which isn’t to say that all vendors are inherently dishonest; there are many operating in our space who make strides to cooperate with SEO.
At the same time, it takes two to tango. On the dealership side, you need to know the facts and figures beyond units and gross. What are your best-performing lead sources, and where do they come from? Where is your ad spend going every month? How does this affect the rest of your marketing channels? There may have been a time when you could have stood to not know the answers to those questions, but that time has since passed. The time to fix your roof isn’t when you start seeing leaks—it’s before the water starts coming in.
