How Search Has Radically Changed The Way Consumers Shop For Cars Version 2.0
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Prolific search engine use has radically changed the way people shop for cars. Moore & Scarry Advertising, a Google Adwords Premier SMB Partner shows you how and what you can do to stay ahead of the curve.
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How Search Has Radically Changed The Way Consumers Shop For Cars Version 2.0
- 1. HOW SEARCH HAS RADICALLY CHANGED THE WAY CONSUMERS SHOP FOR CARS
- 2. Moore & Scarry Expertise Moore & Scarry is one of only 13Google Premier Partners in According to Google and North America and one of only Microsoft, Moore & Scarry is the 3 in the automotive industry most-highly trained automotive search company in North America
- 3. Search Engine Use Monthly Searches in Billions 200 180 Average Trade Age: 6.2 Years 160 143 140 5200% 120 111 Growth 100 87.9 [ projected ] 80 61 60 40 32.4 20 2.7 0 2006 2007 2008 2009 2010 2011
- 4. Digital Marketing Landscape 2011 Digital Advertising Spend (Billions) Social Media $1,590 Email Marketing 5% $1,510 Search engine 4% marketing accounts for 54% of the digital Mobile Marketing $1,652 advertising spend 5% Search Marketing $18,756 54% Display Advertising $10,949 32%
- 5. Evolving Dealership Advertising 2010 Dealer Ad Spending 2000 Dealer Ad Other 9.00% Spending Newspaper Other 22% 7.50% Internet 4.60% Newspaper 52% Direct Mail Internet 6.40% 23.70% Radio Television 16% 15.50% Direct Mail 9.70% Television 20.10% Radio 14%
- 6. Internet Usage in Auto Shopping Dealerships Visited Internet Usage During the Auto Buying During Shopping 100% Process 5 Process 90% 20% 17% 32% 31% 27% 23% 4.1 80% 4 70% 60% 3 58% 62% 50% 51% 55% 47% 48% 40% 2 30% 1.3 20% 1 10% 21% 21% 22% 22% 22% 22% 0% 0 2005 2006 2007 2008 2009 2010 2005 2010 No Usage Internet Usage Submit Lead
- 7. Paid Results (SEM) Paid Results (SEM) Organic results (SEO)
- 8. SEO Site Traffic Sample Site Keyword Traffic: 7091 Visits 1459 Other Keywords Keyword 1 • 41.9% of SEO traffic comes from one keyword • 60.9% of SEO traffic comes from the top 6 keywords • 1459 other keywords make up the remaining traffic • After the top 6 Keyword 6 keywords, the traffic averages 1.9 Keyword 5 visits per keyword Keyword 4 Keyword 3 Keyword 2
- 9. Paid Search Site Traffic Sample Site Keyword Traffic: 3082 Visits Keyword 1 • 9.3% of paid search traffic comes from one Keyword 2 keyword • 33.3% of paid Keyword 3 search traffic comes from the top 6 keywords Keyword 4 • 403 other keywords make up the Keyword 5 remaining traffic • After the top 6 Keyword 6 keywords, the 403 Keywords traffic averages 5.1 visits per keyword
- 10. The Destruction of Organic Space Search marketing Maps Place s Search marketing Reviews
- 11. Google Advertising Revenue 2010 Revenue By Source Everything else 4% Google Market Cap: $197 Billion Advertising 96%
- 12. Google Marketshare General Market Share Other Automotive Market Share 4.3% Other Yahoo 1.6% Microsoft 8.9% 14.7% Microsoft 10.6% Yahoo 16.3% Google +18.6% 64.8% Automotive Traffic Google 76.9%
- 14. Plan Paid Search First 0.17%
- 15. Gaining Proper Perspective on Search Engine Marketing Average Customer Spends $3,200 $21,000 $62,000 Search Engine Marketing Electronic Media Electronic Media Desired Customer Spends $5,300 $18,000 $62,000 Search Engine Marketing Electronic Media Electronic Media +65% Increase in -10% Decrease in Medium 0% Change In Medium 60% Targeted 0.17%% Targeted Advertising Expenditure
- 16. Internet Usage in Auto Shopping Dealerships Visited Internet Usage During the Auto Buying During Shopping 100% Process 5 Process 90% 20% 17% 32% 31% 27% 23% 4.1 80% 4 70% 60% 3 58% 62% 50% 51% 55% 47% 48% 40% 2 30% 1.3 20% 1 10% 21% 21% 22% 22% 22% 22% 0% 0 2005 2006 2007 2008 2009 2010 2005 2010 No Usage Internet Usage Submit Lead
- 17. Internet Usage Dealership Web Site Usage 0 Home Page Other pages 16% 24% 76% of Dealership web site traffic is the home page, used cars, new cars or specials. All other web pages on dealer web sites account for Specials Used Cars only 24% of dealership web 12% 27% site traffic. New Cars 21%
- 18. Dynamic Inventory Marketing Haystack creates campaigns based on your actual inventory and updates each day Better Performance 382% Than Used Vehicle SEO Reduction In Clicks 158% Better Performance Than Non-Haystack SEM 58% To Find A Vehicle
- 19. QUESTIONS?
Notes de l'éditeur
- Search engine usage is exploding. I think everyone understands that it is, but perhaps not realize the actual figures. Search usage is up almost 5200% in the past five years.What’s so important about this is that how people behave has radically changed since the last time they interacted with you. JD Power reports that the average trade age is 6.2 years. Anecdotally, we feel it is shorter, but perhaps more like 4 or 5 years. With either of those two figures in mind, the way that a customer shopped for a vehicle the last time they purchased a vehicle from you has changed – as much as 5200% - since the last time they purchased a vehicle from you. That’s what we’re tasked with today – a society and technology that is changing so rapidly, that from the time a consumer interacts with you the first time to the time they interact with you again, the forms of media and habits have change dramatically. With this in mind you can see why being proactive and aggressive in your efforts in regard to the search engines is so important.
- While many people don’t realize it, search engine marketing is ubiquitous with digital advertising. You’ll likely attend seminars about email marketing, social media and other emerging digital mediums. The fact of the matter is that search engine marketing accounts for one out of every two digital marketing dollars. And there’s good reason why – it’s incredibly targeted and accountable. So while you may attend a number of different seminars today and I’m sure they all will be good and helpful and presented well – many of them are about mediums that are a very small portion of the media landscape.
- And here’s why you can see that the Internet has become so important for auto dealers. In 2000, 52% of all dealer advertising was done in the newspaper. In 2010, almost half of newspaper advertising has been replaced by Internet. Now the Internet is the number one advertising source for dealers and has replaced about all of what newspaper has lost in the past ten years. You can see that no other categories have radically changed. In effect, the Internet has taken a 50% share of what was the auto industry’s number one advertising outlet.
- On the left, you can see a chart on Internet usage during the auto shopping process from 2005 to 2010. While you can see usage go up, on the chart on the right, you can see the number of dealerships that people visit in person during the shopping process go down. What this trends shows is that as people use the Internet more and more in the shopping process, they visit dealerships in person less and less. And that makes the Internet and the interactions we have with people on the Internet increasingly important. So much so, that statistically, that’s where the sale is made – because as you can see from the chart on the right – the average person buys from the first dealership they walk in to – they’ve already used the Internet to select the dealership they’re going to business with. If you want to influence that decision, it’s most likely you’re going to have to do that on the Internet.
- I’m sure most people have a solid understanding of what a search result looks like, so here it is. When someone types something into a search engine, they’re typically returned with two sets of results, organic and paid. The organic listings are the ones that Google thinks matches the query based on what they’ve collected from the Internet. The paid results are the ones that are controlled and paid for by advertisers. Typically, these are on the top, right and now, sometimes they’re appearing on the bottom.
- What I’m going to show you here is why search engine marking is so important. Realistically, and this may be controversial, but we feel that SEO for the average dealer is fairly easy and the majority of it is done when you initially launch a site. A lot of that is surrounding your brand, your region and your trademarks. In addition, there’s a much lower level of competition for a dealer’s organic search than there is for other industries. Compare Zappos efforts to show up for ‘discount shoes’ versus the two or three thousand online shoe retailers, or your efforts to show up against the other 3 dealers of the same make in your market. If you fall flat on your face and fail at SEO, you show up number four. So you have a smaller hill to climb. This isn’t an argument against SEO, it’s that there are different levels of SEO efforts – let’s say basic and advanced – and that if you’re going to prioritize your search efforts, it should be basic SEO first, search marketing second and then advanced SEO next. Here’s why. With basic SEO, once you’re done with your solid initial SEO, the vast majority of your traffic comes from your brand, your geography and your trade mark. You can see in this example that almost 42% of all SEO traffic comes from a single keyword. After that, nearly 61% comes from just six different keywords – and all of these keywords are brand, geography and trademark. After these first six keywords, the remaining SEO traffic was comprised of over 1450 keywords – each of them garnering about 1.9 keywords per keyword. So, after the big keywords, your SEO traffic is made of many, many keywords getting one, two and three visits each.
- Now on to how SEM works – the first thing to notice is that in these two charts, SEM makes up for about 33% of the search traffic. Now onto the composition of keywords. With our SEM traffic, the first keyword only comprises 10% of the paid search traffic and the top six only comprise 33% of paid search traffic. So the main keywords make up a much smaller – almost half – portion of the traffic. After that, the remaining traffic is made up of just 400 keywords with an average traffic rate of 5.1 visits per keyword. So, if you’re going to make an effort to add traffic from a keyword – doing it through paid search instead of SEO allows us to generate about 250% more traffic. Basically, we can create more traffic with less effort, which I think is what most dealerships are looking for in general.
- There’s good reason this happens. It’s not happenstance. Google is really pushing advertising based and other controllable elements in the search engine. The reason is that Google doesn’t make single penny for delivering organic results and Google is a publicly traded company who’s purpose is to make money and provide value to shareholders. This happens with Yahoo and Microsoft too. If you take a look at this screen, you can see that paid or user controlled elements dominate the search results. Ensuring that we’re putting a lot of effort behind the paid and user controlled elements is critical to a dealerships success.
- Just take a look at this. Google is one of the world’s biggest companies with a market cap of close to 200 billion dollars – compare that to Apple, the world’s most valuable at about 300 million. And 96% of Google’s revenue comes from the advertising it sells on its properties. The vast majority of that advertising is search engine marketing.
- Now for a reason unknown to us – Google is also more important to the auto industry that it is industry at large. According to comScore, Google has about a 65% market share in the industry at large. Now if we look at Google analytics across hundreds of different web sites, we see that Google traffic to dealership websites is about 76% - almost one in three search visitors and more than 18% more than the industry at large. So while, I’m sure we’re all aware of how important Google is in regard to search engines, it’s an even more important search engine to the retail automotive industry.
- Let’s start to take a look at search marketing as an advertising medium. Let’s take a look at this search query. Someone types honda accord into Google. What percentage of the people who type this – or something similar - into Google do you think want to buy a honda accord, sell honda accord or service a honda accord? Let’s put that number at 60%. I think that’s very fair and the number is likely to be much higher. Now what three business are most car dealers in? Selling cars, buying cars and service cars. So the person who types this into a search engine is 60% likely to be looking for a product or service you offer as an auto dealer.
- Now let’s take a look at another advertising medium. The penultimate of television advertising is the superbowl, so let’s say that I ran a television commercial in the Superbowl for sales or service. Last year, the Superbowl pulled a 34 rating – that means 34 percent of the population was watching it. The superbowl and the series finale of MASH are the highest rated TV shows ever. A typical TV show, let’s say a morning news, might get a 3 rating. So let’s go with the best – the Superbowl. If there are 19 million people who are going to buy a car from a car dealership this year – 12 million new cars and 6 million used – and that used figure is just what is sold through franchised dealers. Let’s take that 19 million and multiply it by the 34 percent of people who would watch the Superbowl. Then take that number and divide it by 12, so we get the number of people who are going to buy a car that month. And then let’s take that number and divide it by 308 million, which is the total population of the US. We end up a figure that a Superbowl commercial would reach 0.17% of the people in the US who are going to by ANY CAR from ANY CAR dealership that month. And if you were to then multiply it by the marketshare of your brand? That number would be pretty low. But the fact of the matter is that advertising is very wasteful. Direct mail that produces a 1% result is considered successful. A commercial that reaches 33% of the population is the most-watched show of all time. Now we take those types of figures and we compare them back to that original number – the 60% of the people typing Honda Accord into a search engine being a customer and we realize how targeted a medium search marketing is. And there’s other elements that we’re not going to go into today – such as paying only for performance, accountability, tracking and more.
- So what I want to talk to you about here is gaining a perspective on search marketing budgets and statistics. We’re a full service advertising agency also – so we also manage our customers television, radio, newspaper and direct mail spends. So we have some good perspective on how dealers are spending their money and what results they’re achieving. Our average customer spends $3200 per month on paid search, and incidentally, that’s about 80% higher than what the automotive search marketing companies average. They spend on average $21,000 on electronic media – meaning radio, television and cable and overall they spend $62,000 per month overall on advertising. That’s what our average customer spends. So what do we recommend? What would our customers do if they listened to us? They’d up paid search budgets. Let’s take a look at this – what if we changed the budget to look like this - $5300 in paid search, $18,000 in electronic media. We’d take a medium that we said before was 60% targeted and increase it by 65% and take a medium we said was 0.17% targeted and reduce it by 10%. This would be a massive increase in our paid search budgets and a minor reduction in electronic media. This makes perfect sense to us. Now let me tell you why we’re not getting to this point fast as an industry. All of the major search marketing providers are NOT advertising agencies. They’re web companies or simply search marketing companies. They have a myopic view of search marketing. They see how it performs and want to push it the nth degree. They stop – or fall short – of going deeper into search because it hurts performance statistics. We as company go really deep into search because we see how it compares to other mediums. So if we find a keyword that’s only 10% targeted, as opposed to 60%, we go ahead and buy it – because we know the alternative is a medium that is 0.17% targeted. So to be really effective with search marketing you have to look at it compared to other mediums and not just as a single medium. When you do this, you’ll be much more effective.
- That will bring me on to the next element – judging the success of your search and learning what statistics are truly important. I’m going to bring back a slide that we had up earlier about internet usage during the shopping process. You’ll see that over the years, as Internet usage continues to grow, users who submit leads is barely growing. What this and the chart on the right of this slide shows is that the way people use the Internet to shop for a car is by using the Internet to do research and narrow down their selection and then they go into the dealership to purchase the vehicle. This is what the industry calls ROPO, research online, purchase offline. Now there’s one thing I want to point out here to prove my point. I think we all agree that the number of people who use the Internet to shop for a vehicle is ridiculously high. The fact of the matter is that it’s really not that much more likely that someone ISN’T using the Internet than they are to to submit a lead. The fact of the matter is how people shop for a car online is to use the Internet to research a vehicle, find a vehicle and then they call or walk into the dealership to purchase it. As a matter of fact, there are many statistics that show the number one way someone makes their initial contact with a dealership after researching on the Internet is to simply walk into the dealership.
- So what’s important in regard to Internet shopping? Here’s how people utilize dealership web sites. When customers visit a dealership web site – they visit the home pages, used cars, new cars and specials. The fact of the matter is that every other page on a dealership’s web site gets less than 24% of the web site’s traffic. So what people are really doing on a dealerships web site is looing at inventory. So what’s really important, is your dealership’s inventory. It really seems to all come back down to basics. The amount, type and how well you price your inventory really is going to dictate how well you perform on the Internet.f
- So if you take a look at what we do as a company, we look at these results and we’re developing search marketing platforms that take advantage of what consumers are looking for on the Internet. One of the most interesting features of our Haystack Automotive Search Marketing Platform is how it takes you inventory directly from your DMS and dynamcially creates search marketing campaigns based around your actual inventory.This way, when people go to Google to search for a car, instead of finding a generic listing for your dealership, they find the actual units of inventory that you have in stock and the ads link to those vehicle detail pages. So customers are getting the information they’re looking for much more quickly. This type of tool allows customers to get to the specific unit of inventory they’re looking for 60% faster and with 60% fewer clicks. And I think everyone can agree that reducing the time it takes to get consumer accurate information and reducing the number of clicks it takes to get information, has a direct correlation on a shoppers experience. And this is just a single feature, there’s quite a bit more.
- Now, I know I covered a lot, and I wanted to take a moment to open it up to questions so that we can touch on any points I missed or delve deeper into any of the points I’ve made.