Why are you paying Google to drive traffic to your site?

The automotive industry wastes billions on paid search, social, and re-targeting to drive consumers to their own websites – and consumer behavior data suggests that people are increasingly avoiding these sites. The auto industry needs to resist the seductive lure of spending billions to drive consumers to their websites. Instead, they need to focus on where consumers spend their time and invest there while appreciating the conumers’ growing desire to invest their times in comprehensive online market places.

A Disparity Between Spend and Results

In 2017, digital automotive ad spend alone will hit nearly $10.7 billion — with 45 percent, or about $4.8 billion, being sunk in paid search, and 48.7 percent, or about $5.2 billion, going to display.[1] It’s fair to assume that automotive OEMs, local dealers, and their agencies will spend more than $10 billion to drive consumers to their first-party websites.

The auto industry is wasting a ton of money on advertising – actually, 10,000 tons. Here’s one big reason why: while agencies spend billions to drive consumers to their websites, traffic to these sites is decreasing as first-party sites do not meet the customer’s expectations.  For instance, according to comScore data, from May 2016 to May 2017, traffic to automotive manufacturer sites alone decreased by a whopping 28 percent. [2] In addition, comScore data indicates that:

• Traffic to multiple national dealers’ sites over a similar period decreased by an average of 15 percent.[3]
• Third-party automotive resource sites (marketplaces) such as Cars.com averaged 2.4 times the unique monthly visitors as automotive manufacturer sites.[4]

The $10 billion wasted to promote first-party website traffic looks even more grim when you realize that shoppers don’t spend much time on dealership and automotive sites, either. In fact, they spend 60 percent of their time on third-party sites and only 25 percent of their time on dealership/OEM sites combined.[5]

To make matters even worse, advertisers risk spending their money on bogus sites or sites that will hurt their brand. As recently reported, Google is refunding businesses whose advertising dollars were spent on websites with fake traffic. In all, advertisers lose $6.5 billion to fraud, and tracking the value of their legitimate spend is complicated by a system that fails to be transparent.[6] The 10,000-ton Google elephant in the room is the $10 billion that automotive industry is wasting to drive traffic to first-party websites. And the industry needs to talk about the elephant or else continue wasting money. With a flat-to-down seasonally adjusted annual rate in 2017[7], OEMs and local dealers need to be hyper-vigilant about the effectiveness of their marketing or risk losing share to more advanced/aligned OEMs and local retailers.

Why do automotive shoppers prefer third-party reference sites over first-party automotive sites? Well, two reasons stand out:

Rising Consumer Digital Expectations

Consumers’ expectations of automotive sites are being influenced by their experiences on comprehensive marketplaces sites such as Amazon, Zillow, and Expedia. On these and many other market place sites, consumers have become accustomed to and demand:

• Speed.
• Trustworthiness.
• A wide selection of easily searchable inventory.
• Expert reviews as well as user-generated content.
• A mobile-first experience.
• An experience free from ad disruption – either free of ads completely or free of ads (such as pop-up ads) that get in the way of finding what consumers want to find.

Consumers continue to interact with non-automotive sites even as they research for an automotive purchase. All the sites they visit shape their expectations of their digital experience with automotive sites.

Automotive Sites Come Up Short

Most dealerships and OEM sites still struggle to provide a complete, easy-to-navigate vehicle selection and an independent as well as crowdsourced reviews of the price, vehicle, dealership and sales staff. According to a DrivingSales white paper, Competing on Consumer Experience, “. . . consumers use online sources they consider to be the most trustworthy and objective. Three out of four shoppers reported using third-party car buying websites while shopping for their new car while substantially fewer used dealership websites.” The white paper cited these reasons for why consumers avoid dealership sites:

• “They find them confusing and cluttered
• They don’t want to be ‘bugged’ if they submit a question or inquiry
• They feel information on 3rd party sites are more ‘trustworthy’ and complete”

Being mobile-friendly is another trait that consumers have come to expect. According to Google, the average load time for mobile landing pages in general is 22 seconds – yet 53 percent of visitors abandon mobile sites that take more than 3 seconds to load[8]. Chances are your site is not fast enough for the mobile consumers. (At Cars.com, 59 percent of our traffic comes from mobile and we can help you reach those consumers no matter what device they’re using.) You should consider the mobile experience of your site before spending advertising dollars to drive consumers to your first-party site.

The real beneficiaries for the promotion of first-party traffic have been Google, Facebook, and their reseller agencies that promote such traffic.  For instance, Google recorded $25.7  billion in revenue for Q2 2017, and Facebook beat expectations for its most recent earnings report. Advertising fuels earnings for both companies. In Google’s case, advertising accounts for 87 percent of the company’s revenue, thanks partly to automotive dealers and OEMs pumping money to drive people to first-party websites that do not meet the consumer’s digital expectations.

How to Address the 10,000-Ton Elephant

To address the 10,000-ton elephant in the room, OEMs, dealers, and their agencies need to meet consumers where they are in their journey (rather than try to pull them to automotive websites) and understand what influences consumer’s decisions. I recently discussed in a blog post how the automotive industry needs to operate by a redefined four Ps of automotive marketing: product, price, place, and person. As I discussed, consumers have redefined place to mean not only the lot, but also all the digital destinations where they interact with your brand as they research their purchase.

We know from our own experience and data that the consumer’s purchase journey is varied and layered. Those research touchpoints include social media, reviews, OEM sites, industry trades, and third-party publishers such as Cars.com. Leading automotive OEMs and local auto retailers understand the perils of spending too much money and energy on driving traffic to first-party websites. Instead, they are trying to best promote their people, dealership, product, and vehicle price, on third- party marketplaces to get them to walk into the dealership.

Finally, it is critical to understand and appreciate the differences in goals that your OEM or local auto retailer have against the car shoppers’ goals. As the DrivingSales white paper discusses, car shoppers want independent validation; a large, unbiased selection of inventory; and trust and transparency.

Understanding the 4 Ps and differences in your goals versus the consumer’s goals is key to addressing the 10,000-ton pound elephant in the room.