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The Daily Stream

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Auto Dealers - Combating Increased CPCs with Google Enhanced Campaigns

July 30, 2013 // By: Stream Companies

Paid Search Advertising for Auto DealersOver the last few years, auto dealerships have increasingly begun to realize the direct benefit of utilizing paid search campaigns to increase their lead generation funnel.  Last year, a survey conducted by Cars.com and Dataium found that 55% of US auto dealerships’ digital ad spend was going to paid search marketing.  This is because users utilize search engines to gather information before making a buying decision.

The study also found that the average click-through rate within the auto industry has steadily dropped each quarter since Q4 2011.  Not only are OEM brand sites still very much present in paid search, but local dealers are competing over the same space to try and increase their impression share.  In an August 2012 survey, 74% of US new vehicle buyers used dealer websites before making a purchase.

So what does this all mean?  It is more important than ever for dealerships to regularly be competing within their local market from a paid search standpoint.  To make things more complicated, back in February, Google announced the transition to Enhanced Campaigns.  There are many facets to the new way Google will serve paid search ads, but the news is that starting on July 22, all Google accounts must migrate to the new system.  If Google automatically upgrades your campaigns for you, you will be opted-in to serving ads on all devices - desktop, tablets, and mobile, regardless of how they were previously set-up.

A recent study by Adobe found that because of this shift, CPCs as a whole will most likely rise for the first time in almost 2 years.  The once lower cost options of advertising in tablets and mobile will continue to become more competitive with all AdWords accounts being opted into these devices.  The study also predicts a significant rise in paid search spend, reinforcing the increase in competition.

So what is a search marketer to do?  Now, more than ever, it is important to be regularly optimizing your account for the best possible ROI.  This can be done by a combination of fighting increased CPC costs and finding new ways to increase leads.  Here are a few suggestions from the Stream Companies Paid Search team:

1. Increase Your Quality Score

This is an obvious one, but for new search marketers this is import to understand.  Google will pre-determine how much you will pay for a keyword impression and your ad rank by a combination of Quality Score and your bid.  A recent study has found keywords with a score of 7 or above actually receive “discounts” from Google on their bids, while poor quality scores (six or lower) receive an increase in what you must pay to be in the same ad position.

The quickest way to increase your Quality Score for each keyword is to increase your overall click-through rate.  Inserting more irrelevant negative keywords, building tightly themed ad groups, and regularly testing ad copy are some of the best ways to do this.

2. Mobile Strategy

With Enhanced Campaigns, you must opt-in to all device targeting (desktops, mobile and tablets).  Fortunately, you can adjust your mobile bids on a percentage basis.  I recently compared AdWords data from fall 2012 over spring 2013 for ten of our auto dealer clients.  Back in late February, Stream Companies starting transitioning these clients over to Enhanced Campaigns.  At that time, we also tested out using Google’s suggested mobile bids, which for most clients was a discount of -20%.

Comparing data from these two time periods, we found that our average ad rank increased, while our CPCs slightly decreased:

CPCs Table

With the full transition to Enhanced Campaigns automatically beginning on July 22, it will be important to monitor your bids over the next several weeks.

3. Create New Lead Opportunities

Due to the competitive marketplace, sometimes an increase in CPCs can be inevitable.  To keep a consistent ROI with paid search marketing you need to find new ways to improve your lead generation.  We suggest utilizing ad extensions to help with this – create Sitelinks that click-through to a test drive form or a directions page, and enable Call extensions to increase calls into the dealership.  You can also create mobile-only ads within Enhanced Campaigns.  Encourage users to call for a test drive instead of filing out a lead form.

Next, try creating more call-to-action ad copy within your desktop/PC ads to encourage users to convert.  Lastly, experimenting with landing page optimization and testing can do wonders to a dealer site that may have a similar look and feel to your competitors’ websites.  There are a number of third party software providers you can use for landing page testing that won’t cost you a small fortune.

Have any other tips or tricks? Let us know in the comments below!

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Topics: Advertising (general), adwords, auto dealerships, Cost-Per-Click, CPC, display advertising, google, Marketing tips, Mobile, paid search, paid search ads, Pay-Per-Click, PPC, ppc, search marketing, stream companies