Paid Search Does Not Work In Automotive Retail.

At least not the way you think it does or that you’re being lead by your SEM vendor or E-Commerce director to believe that it does.

For the past 4 years we have sold, managed, measured, conducted control group testing on mail, email, and SEM and after meticulous control-group studies we found for ourselves that at best, after accounting for costs in administration and execution of those campaigns (not to mention the management fees) there were no (meaning less than zero, a negative ROI) benefits to continue a dealerships SEM campaign. We’ve stopped doing them and we’ve stopped selling them. But hey, that’s us… and “who are we” right? Well what about Devin Wenig and his tiny little company eBay?

Look, I’m going to go out on a limb here and suggest that eBay has far more resources to evaluate efficacy in paid search than your SEM vendor or your E-Commerce director… it’s just a guess but roll with it for a second.

Read this very carefully: back in 2012 eBay commissioned scientists and marketers to conduct “control group” studies and they determined that paid search Does. Not. Work! They stopped it in 2012 and haven’t picked it up since. Yet Amazon, Walgreens, and more still do.

 

Now before you unload your Tuesday Freak-Out read this article. (I’d recommend reading it twice).

 

http://www.slate.com/articles/business/harvard_business_review/2013/03/paid_search_ads_did_ebay_just_prove_they_don_t_work.html

 

 

Now consider your brand for a second, let’s say Honda, or Chevrolet, or Toyota. Do you believe that in your market, those brands aren’t strong brands?

Now consider your dealership name and how Google rewards a search query with the aforementioned brands in it. I.e. “ABC Honda dealer” or “Toyota Dealer.” Experiment yourself to see how Google gives the query-er exactly what they’re looking for. A neat organized list of every BRAND dealer near them. They even answer “Where?” questions with Google Maps, “Why you?” questions with Google Reviews, and “When?” questions with “closed now”… but I digress.

The eBay study proves that it doesn’t work the way the vast majority of dealers, their staff, and vendors believes that it does. We have many clients that are dramatically reducing their SEM spend and many more that have gone dark and you should too. Immediately.

But, in the spirit of good sales and expense economics you should first ask to conduct “control group” studies of your own to measure the impact if any exists (unlikely) in your current SEM campaigns. You can do it yourself and we can supply you the strategy, or you can hire us and we will do it for you. And if we do, you’ll save yourself tens and in most cases hundreds of thousands of dollars per year.

Asking your SEM vendor to do it will avail you nothing but half-hearted excuses and poor rationale as to why Control Groups won’t work for you. They’ll respond that way for two reasons: 1) it is only in your best interest, not theirs, and 2) if they knew how to do it they would have been doing it to show you the value of your SEM campaigns rather than doing their Jedi-Mind-Tricks with attribution and DMS/CRM transactions and hoping you never awaken to the fact that correlation is not causation.

Of course we’re completely open to being proven wrong. We’ll fire up the BBQ and ready ourselves for some spicy crow and a recantation of this article provided that the proof comes from scientific marketing disciplined research (control group studies – plural) and not DMS/CRM to CTR/VTR “correlation”  or isolated dealership sales growth where other factors like market, management changes, inventory played a factor. If vendors have multiple control group studies then it would only be in their best interest to share them here. “Feeling it” in your showroom isn’t a thing anymore Mr. Dealer. SEM campaign audiences either have quantifiably measurable results over their control-group audience counter parts or they don’t.

Look this isn’t a case against SEM vendors and consultants in automotive retail and certainly not against the many E-Commerce Directors that are the unsung heroes of a dealership. Many dealership staff and many SEM vendors are my closest friends and mentors (hopefully they still are after this post), and the vast majority of them are well intentioned, honest, hard working people that actually want your dealership to grow and they believe that SEM is a good way for  you to do it. Unfortunately,  like the Greeks in 6 BC, had it not been for Herodotus… they’re current belief system is absent scientific marketing fact. The world isn’t flat, someone had to stand up and say it. Paid Search does not work in automotive retail. There, I said it.

 

Pro tip #1: Re-Read the eBay article again now.

Pro tip #2: When your E-Commerce Director or SEM vendor says that they’re smarter with your money than eBay is with theirs… and with no control group studies of their own to prove it… well… hopefully you know what to do with that.

 

If you want to discuss this in more detail we’d be happy to chat. You can reach me directly at ronmorrison@pureinfluencer.net.

 

One last thing, if you found this article at all helpful or if it a least gave you food for thought, please share, post, tweet, etc. Your friends will appreciate you for it.