Off to See the Wizard

If you have yet to embark into the automotive marketing land of “Search,” grab your ruby slippers and watch out for wicked witches while navigating through a confusing landscape.

Search has become the latest buzzword for auto retailing on the Internet. But industry experts are realizing how difficult it is for dealers who want to spend their time selling cars to have to learn the intricacies of search-engine marketing.

The promise of search is that there are certain things dealers can do to increase the visibility of their websites. But good luck in trying to figure out how those strategies work.

“There certainly is an Oz-like quality to it,” Mitch Golub, president of Cars.com, says. “It can be confusing for dealers.”

With terms such as “optimization,” “organic,” “paid-per-click” and “algorithmic” search, dealers get frustrated trying to figure out what their vendors — or the wizards behind the curtain — are doing to drive traffic to their websites and leads to their Internet departments.

Adding to the confusion are certain vendors that are the 21st century's version of snake oil salesmen, promising the world if dealers turn over their entire Web-marketing budgets to them to be employed in search strategies.

“It's almost like a black hole,” says one e-commerce director for a large public dealer group. “We really don't know what we're spending our money on. Everyone thinks the Internet provides the ability to know exactly what's going on, but that isn't the case.”

Matthew Strickroot, associate director-lead strategy for General Motors Corp., says leveraging search technology became a full-time job for him when he was with the Mike Shaw Automotive Group in Denver, CO.

“It was difficult and time consuming,” he admits.

Golub says the industry needs to do a better job of explaining the ABC's of search-engine marketing to dealers. Much of Cars.com's dealership training is focused on helping dealers understand the new technology.

But where to begin? For starters, become familiar with the vocabulary.

So here's a primer on some of the new terms and how they relate to dealerships.

Search-engine users go to a website either through one of the free listings (also called organic, optimized or natural search) or one of the paid advertising listings (paid-per-click).

Optimization

Getting your website ranked fairly high in one of the free listings is accomplished by “optimization.” The higher a website appears on a Google or Yahoo listing, the greater the likelihood people will click on that site.

Google and Yahoo have top-secret formulas (that change all the time) to determine how sites are ranked. But there are things companies can do to increase their chances of being ranked high.

Typically, search engines send out “spiders” that crawl through cyber space evaluating each website.

This is where search gets interesting. There are two strategies of optimization. One is called “white hat” search engine optimization (SEO), the other is “black hat” SEO.

Search engine firms look kindly upon white hats and frown on black hats. In fact, employing black hat methods can get a website banned from the listings if caught. But they are still out there.

Companies that employ the white hat strategy create content on the site with the reader in mind, while the black hat villains set up the content in a deceptive manner to fool the “spiders” into ranking their sites higher than they should be. Often, one version of the web page is shown to the spiders, while the visitors see another.

Some vendors play aggressively in the black hat world. Industry observers say even some dealers are beginning to push the envelope. Ultimately, it leads to a poor user experience because sites are not set up with them in mind.

White hat methods typically provide well-written content that is targeted to the end-user. Other characteristics include working links, user-friendly navigation and a unique and relevant name for each Web page within the site.

A great question to ask a vendor that optimizes a dealership site, whether it is your website provider or a separate firm, is what kind of methods they employ.

Another issue to keep an eye on is whether the traffic to the website is converting into actual sales. One Internet director says his cost per sale with a prominent website provider exceeded $1,100, compared with $260 when using third-party lead generators.

While 27% of dealerships claim to be doing some form of optimization according to Cars.com, Gary Marcotte, AutoNation Inc.'s vice president-marketing for public dealer group, says it is hard.

“The temptation on organic search is the gimmicks,” he says. “People will try it for a while. It really is quick-hit stuff.”

Paid-per-click

Paid-per-click listings are ones in which a company pays to be listed. Usually, this involves a company bidding on key words it think people will type into the search-engine tool for products or services it provides.

For example, someone looking for a Honda in Detroit might type “Detroit Honda dealership.” As a result, a dealer may want to bid on that combination of words.

Depending on how much is bid and how many clicks a website generates, usually determines how high a particular site appears in the paid listings section.

What a company bids is what it pays when someone clicks on its ad. According to Cars.com research, only 4% of car dealers are doing paid search, so, key words currently are inexpensive. But those prices are climbing and at some point may not be a cost-effective way to market any more.

“You have to wonder, at what point do the search engines price themselves out of the market?” Golub asks.

Marcotte says, “Dealers will gravitate to paid search, but they will find out it costs a lot. One could argue it costs more to do search than it does to buy leads.”

Marcotte estimates AutoNation could be buying more than a million key words by the end of the summer.

With the recent advent of local search, dealerships can buy words for their local area so they are not competing with vendors or the manufacturers. For example, a company such as Cars.com or Ford Motor Co. might buy the word “Ford” for non-local search.

“We leave the local search to the dealer,” Golub says. The tricky part is knowing what key words to bid on and how much — almost impossible for someone in the dealership to keep up with.

Today, there are companies that help dealers make sense of the paid-per-click world. The Cobalt Group recently overhauled its business strategy to make search one of its primary selling points.

Cars.com last year acquired CPC Logic for its search technology and has developed BidIQ, a tool that helps dealers analyze their search efforts.

Cliff Banks is editorial director of Ward's Dealer Group. He is at [email protected].