Article

The Search For Money

September 2006, Auto Dealer Today - WebXclusive

by Todd Swickard - Also by this author

Search engines want your money; so do search marketers, lead providers and online classifieds. The question that no one seems to be asking is who is supposed to foot the bill for all this? As wonderful of an advertising investment as the Internet is, it is going to run into some serious pitfalls as everyone from OEMs to tire shops get online. At one point, the same brand could advertise three different places on a search results page and drive the cost of ads up as much as double the cost.

So the question that no one has an answer for is whether the OEM, the regional ad group or the dealer should shoulder the cost of the ad. The first problem that arises out of this is that there are three different groups controlling three different buckets of money. The OEM has its big and powerful agency out of Detroit, New York or Los Angeles that is scrambling to try to find a way to pull money out of the regular advertising and come up with a plan to measure results online. The regional groups have their own agenda and agency that tries to please everyone and they are buying up words. The third is the dealers themselves, who are trying to find a solution, without regard for what the OEM or regional group is doing, but are more concerned about how to get more traffic to their Web site.

Back in the day (five years ago), the three buckets of money had very specific roles. The OEM bucket would provide the large national coverage of advertising to TV, radio and print. The regional group would supplement those efforts with more targeted campaigns and the dealer had free reign over all the local stuff. The Internet has screwed up that simple hierarchy. Many times the local, regional and national lines get blurred online. Lately the same inventory has been available to all of them.

Setting out rules of advertising has never been simple. Sure, if you have co-op funds from your OEM, it is pretty simple. You have to say this and show that. The problem with the Internet is that a customer can exist in many different stages of buying. If someone is just in the research stage of their buying decision, should the OEM be responsible for marketing to them? The counterpoint is that the dealer would like to own the customer from the start. Many of the major web companies offer as much information if not more than the OEM themselves. So why not just send them to the dealer site?

There is no really good answer. Each side has its own argument. Each side can actually make a fairly good argument of when the customer is “theirs.” With that said the chaos of bidding practices will continue and artificially inflate pricing in the search engines. The only winner in this is the search engines and their stock price. Some rules of customer engagement have to be defined to assist in keeping the cost under control.

The search engines are complicated enough without adding economic and marketing rules to them. Dealers finally understand that their customers are online and they have to respond to their desires. Now dealers are trying to understand search and the marketing that is involved in getting a customer to their Web site. So I figured I might as well get the debate started because this situation will be easier to plan for than to fix later.

As you start buying terms in random order or hire a company to do it for you, know that it will all change soon. As the engines evolve and more become localized, the lines will start to blur as to what area of responsibility each group has and who should pay to drive customers to your site.

Personally, it is this writer’s opinion that the OEMs should work with the big words—“Honda.” The regional groups should take the still higher dollar words—“Honda Tulsa.” The dealers should get co-op money from the OEM to market online for even more specific terms. This sounds really simple, but there are many opinions from some very competitive people that it will not be solved easily. The most overriding factor is that this complex issue touches a lot of buckets of money so the solution won’t come quickly. Until then, good luck in your search for “money.”

Vol 3, Issue 5

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