The New Benefits of Search for Dealers

Good article about Search Engine Marketing…

Published: June 25, 2007 – iMedia Connection

Early internet education

In the early days of the internet, while consulting large metro dealerships about how the internet was changing their business, the concern was always the same. The internet made dealers nervous because web-savvy customers were only interested in looking up prices, which they would use as a negotiation point with a dealer’s competitors. At the time, these dealerships actually preferred not to advertise online because their “prime” customer was not an internet user but someone who would walk in off the street without having done his or her research.

The promise of online marketing

These days, nearly everyone is an “internet customer,” with 67 percent of all new car buyers researching online prior to purchase1. For the first time in history, online marketing can enable dealers to identify and speak to more than two-thirds of the people in their market area who will buy a new car in the next few months. Savvy dealers can now leverage the internet and turn their reluctance into profits, not only from new cars, but from used cars, financing and fixed operations.

That said, with the huge breadth of online media options (e.g., third-party research sites, online inventory sites, online classifieds, local news sites and social media outlets) dealers face a fragmented online media landscape. Due to the confusion that this invariably causes, most dealers have chosen to continue to spend the bulk of their advertising budgets on familiar and traditional media outlets. While this may reduce media buying complexities, we all know that successful advertising should follow consumer eyeballs, which are clearly on the internet.

Why search works for dealers

In order to gain mass appeal among auto dealers, media should be easy to purchase, have mass reach in the dealers’ DMA, allow for rotating offers to consumers and be highly measurable. Unfortunately, many online options do not fit the bill here, as most dealers do not have the time or expertise to evaluate the relative merits of thousands of smaller publishers. In order to simplify the media buying process while achieving the necessary reach, dealers have begun looking to search engines to deliver interested customers to their lots and phone lines.

J.D. Power and Associates cites that 85 percent of new car shoppers who use the internet for research are using search engines during the process. This means that more than half of all new car buyers use search prior to their new vehicle purchase, offering marketers an unprecedented level of reach. Because all of the major search engines allow marketers to leverage geo-targeting, dealers can message to actual auto shoppers in their DMA, a benefit that enables more targeted and efficient ad buys.

Many forward thinking dealers have experienced and realized the benefits of search marketing. Those leveraging search now have a solid view into how this form of advertising drives online and phone leads for sales and service and are now able to hold other media formats accountable to similar metrics.

Additionally, search ads enable dealers to test which messages and offers are most effective at driving interest from buyers in their area. Within hours of launching a campaign, a dealer can understand which offers are resonating and which aren’t. Real-time results can significantly enhance and inform overall advertising effectiveness; messages that are playing well online can be leveraged in other media channels as well.

The future

Search marketing at the local level is in its nascent stages. Auto dealers are just starting to think about this media as a viable alternative to traditional media and, as such, are just sticking their toes into the water. Today, most dealer search programs focus on new car sales and driving awareness of the dealership among new car shoppers. The possibilities of search marketing, however, are limitless.

Nearly one of every two online users visit Yahoo! each month (or the largest third-party research site, Y! autos) and we get over 150 million automotive queries every month in the U.S. Over 25 million of these queries are related to parts and service, and over 10 million are related to used vehicles. A dealer can leverage that knowledge to advertise used inventory and their service drive: the two most profitable areas of the dealership. Before long, a local dealer will be able to easily create a unique search ad for every piece of inventory — new and used — on the lot, rotating deals based on a user’s query. Additionally, that dealer can use search data to better understand user preferences in his market area to help drive inventory purchase decisions, lowering days to turn while increasing conversion rates.

What was once a source of apprehension can be turned into a smart and significant advantage in an increasingly competitive marketplace.

David Schwartz is senior category director, automotive, at Yahoo!

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