Succeeding in the highly competitive world of Internet auto retailing depends on many of the same factors that dictate success in athletics. Many of the concepts a successful Internet department has to master are torn straight from the sports page. So, in light of Super Bowl season, the Dealix Dealer Newsletter has come up with some recommendations for your Internet marketing playbook. And just like the big show, a balanced attack is your key to making an all-pro department in 2006.
Balance
Think of your Internet marketing efforts as your offense. The decisions you make in this area are largely responsible for putting deals on the board. If you don’t want to keep punting sales to the dealer down the street, you have to see the openings on your playing field.
Consider each source of Internet leads like a play. Your end zone is customer contact. To get there, you’ll need to know all the strengths and weaknesses of each option:
- OEM Leads
- Third Party Leads
- Dealership Website Leads
- Leads Generated through Search Engine Marketing - including Search Optimizing Your Site and Paid Search Advertisements
OEM Leads
“Manufacturers will continue to move hundreds of millions of marketing dollars toward their online efforts and will become more efficient marketers in the process.”1
- Dennis Galbraith, J.D. Power and Associates
It’s the OEM’s job to focus on manufacturing and branding, so when it comes to online leads strategy, the focus is less on individual dealers and more on enterprise-wide sales. OEMs want to ensure a lead is responded to, so subsidizing leads and offering them to multiple dealers makes sense on the grand scale.
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Strengths |
Weaknesses |
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36% of new car buyers say OEM sites were a factor in their final purchase decision.2
The most brand loyal buyers can be found at OEM sites.
OEM leads are often subsidized for dealers.
OEM leads tend to have good close rates at around 13%.4
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Manufacturer websites miss buyers who are researching other brands.
OEM leads account for a small percentage - 12% - of top dealers' overall leads mix.4
OEMs realize that the majority of online auto consumers go to third party auto sites, so they also tap into third party sites to generate leads.
For example, Chevrolet advertises on third-party site Edmunds.com to drive more lead volume.
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Third Party Leads
“Consumers prefer to compare vehicle models at third-party sites.”
- Forrester Research
Third party auto sites will continue to be a dominant fixture in the Internet auto purchase process, as they offer choice and the variety of content that consumers love and expect on the Web. The recognition, credibility, and perceived neutrality of these sites among consumers drive high visitor traffic and consistently high lead volumes.
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Strengths |
Weaknesses |
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More than 66% of car buyers who visit third party sites are near-term buyers.2
73% of online new car buyers visited a third party site during their purchase process.2
Independent auto sites account for 5 of the top 10 websites that produce online info requests.2
The top 100 e-dealers get the majority of their leads from third party sites. 4
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Consumers who submit leads at third party sites may be higher up in the purchase funnel than those who go directly to dealer sites. |
Dealership Websites
The dealer’s website is their online showroom, only it can hold 100-times more visitors.
Your dealership website is a key part of your offensive lineup. It gives you an Internet presence and should score some big sales. But even the best dealer website cannot compete with the reach of the powerful brands of third party sites like Edmunds, KBB, AutoTrader, MSN Autos, Yahoo Autos, and others. The key is for dealers to use their own sites to be competitive in their local markets.
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Strengths |
Weaknesses |
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9% of new car buyers say dealership websites were a factor in their vehicle selection.2
Leads from dealer websites yield high close rates – at around 23% - for the top e-dealers. 4
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Today, the top e-dealers only generate about 32% of their leads from their own sites; relying on third parties and their OEMs for additional lead volume. 4
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Leads Generated through Search Engine Marketing
Search engine marketing enables you to fully maximize your website’s potential.
Search engine marketing, which incorporates search engine optimization of your website (SEO) and paid search advertising, can greatly increase the odds that more online buyers will see your dealership’s site and learn what you have to offer.
SEO works by incorporating key words and search terms that consumers use when searching for a vehicle online into your site content, so your site has better odds of coming up in the free, or “organic,” search listings.
Paid search advertising is like the secret play that helps get you even closer to the end zone. With paid search advertising, you can create targeted advertisements with specific key words to attract your best audience.
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Strengths |
Weaknesses |
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Using search engines to market their websites gives dealers access to the growing number of consumers -70% - who go to a search engine first when researching their next vehicle.
89% of online car buyers - nearly 9 out of 10 - use a search engine in their purchase process.2
Connecting with online car buyers through a well-managed search marketing program can dramatically lower a dealer’s cost per vehicle sold vs. using traditional advertising.
The pay per click model used in paid search advertising means dealers only incur costs if consumers click on their ad.
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Paid search advertising programs can be labor intensive and expensive for dealers, so working with a search marketing service provider is recommended.
If the right strategy is not put in place, individual dealers may compete for keyword buys with OEMs and third party sites, rendering the program too costly and ineffective.
In addition, if the program is not managed well, dealers can attract the wrong audience, such as car buyers who are out of their market.
Many consumers still have a fear of dealers, so prefer to initially go to third party sites vs. directly to a dealer’s site.
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Game Plan
The Internet leads playing field is one that is in a constant state of flux, that’s why flexibility and expertise are so important. OEM budgets change, so dealers can’t necessarily really on that lead source. The cost of keyword buys with the major search engines also changes daily, so that one day you’ll get the lowest cost per lead from your search marketing program, and the next, you’ll get it from your third party leads.
This is why a holistic game plan with a flexible strategy makes winning athletic teams and winning Internet departments. By employing the right mix of leads, dealers can ensure all-pro Internet sales figures.
How is this done? Just like every team needs a great coach, tapping into the expertise of top-level trainers, consultants, and service providers with the expertise in websites, search marketing, and third party leads, can enable a high caliber Internet dealership to live up to its full potential, and win the online auto retailing game.
1J.D. Power & Associates Press Release: “New- Vehicle Buyers Using the Internet at Record Levels”
2J.D. Power & Associates September 2005 New Autoshopper.com StudySM – Executive Summary.
3J.D. Power & Associates Press Release: “Why auto dealers are pleased with their online referral traffic”
4Ward’s E-Dealer 100, April 2005.
