Dealers Join Search Party

Just about every Internet-related company in the automotive retail market is on the “Search” bandwagon as a way to get high recognition on search websites for dealership clients.

There is a shift in how dealers are spending their money in online advertising, says Mitch Golub, president of Cars.com, an Internet firm with a formidable used-car site. “Dealers are spending less on lead generation and more on building their brands and driving traffic to their websites.”

Search-engine marketing firms made their presence known at the National Automobile Dealers Assn. convention in February. Several veteran Internet companies, such as Cars.com and The Cobalt Group, launched search-engine management products.

Dealers are looking at those systems as a way to enhance their web presence on search sites and increase traffic to their websites.

Dealer use of search is expected to grow 64% in 2006, according to Golub.

A Cobalt study indicates 33% of surveyed dealerships say they already are paying to advertise on search engines. And half of those dealers intend to increase their paid search budget in the next 12 months.

Search as a technology still is developing.

“It still is evolutionary,” Golub notes. “The major search engines, such as Google, Yahoo! and MSN are unclear how much support they can give the local dealer.”

Experts agree that it is a complicated name game and can get expensive quickly. Pay-per-click advertising, one aspect of search-engine marketing, lets businesses pay to have ads appear next to Internet search results.

Each search engine uses its own top-secret proprietary algorithm based on how much a company pays for a key word and how many click-throughs it gets to determine the placement of each company's ad in the listings.

Try selling cars while trying to keep track of which key words to buy and how much to pay for them.

Google has reevaluated the market and realizes dealers who try to manage search initiatives alone may be in for a tough time. Representatives were at NADA telling dealers to partner with vendors that are Google-certified.

The other aspect of search-engine marketing is organic search, which simply is making a website search-engine friendly by using methods such as targeted meta tags and html code.

Search engines use “spiders” (also called “robots”) to crawl through cyberspace, reading websites. Making a website easier for the spiders means better search results. The more click-throughs a site gets, the higher its ranking on a search engine.

Some studies indicate organic listings drive more traffic than pay-per-click.

The Koons Automotive Group says it has seen significant increase in leads from its dealership website. And that is actual leads, not just web traffic, a key point lost on many search-engine firms.

Industry consultants warn dealers to stay away from firms that talk only about increasing traffic and not converting that traffic into leads. Conversion means visitors on your website are contacting you either by phone or e-mail to begin a conversation.

Dealers also should make sure their search-engine marketing vendors can play both in pay-per-click and organic search.

A strong organic strategy will mean the dealership's prominence on the search engines will last longer. But it will take longer to implement than it does to drive traffic using pay-per-click strategies.

Dealers need to evaluate the long-term viability of their vendors. Some vendors may grab as many customers as possible and then sell out.

“It will be curious to see how many companies are still around two to three years from now,” Golub says.

Dealers should beware of companies pushing for them to stop buying leads from third-party lead generators. Key-word costs may be low now, but in a year dealers could be paying the same amount for one key word that they spend on a lead from a third party.

“At some point, there may be a finite number of key words,” Golub says.

One final point: Dealers who partake in search marketing need to make sure they are set up and have the processes and personnel in place to handle the increased leads, or else all of those efforts will go for naught.