Search engine marketing is the catchphrase of the day, but where does it fit in your online advertising mix? According to the May dealeradvantage survey, more than 55 percent of dealers that responded said they now include search engine marketing in their online advertising plan to drive traffic to and generate sales leads from their websites. So how can search engine marketing complement your online efforts?

With 89 percent of automotive Internet users turning to search engines (e.g., Google, Yahoo! and MSN) during the shopping process,¹ search is an increasingly important component of a successful online marketing and sales effort. But Cars.com president Mitch Golub is quick to remind dealers that it is just one element of a successful online campaign. “More than ever, shoppers are fragmented across the Internet, and dealers need to implement strategies to reach shoppers across multiple Web channels.”

Third-party sites still dominate when it comes to reaching and influencing the purchase decisions of in-market shoppers. In fact, 90 percent of used vehicle shoppers² consult an independent website (e.g., Cars.com) to get a look at what is available in their area and to obtain objective information about the specific vehicles and dealerships they are considering. For dealerships looking to efficiently reach the most online shoppers, third-party listings and lead services should be a cornerstone of their program. Cars.com recommends that dealers use search to complement an existing online marketing plan, which includes listings, leads, display advertising and a comprehensive dealer website.

Search can be an excellent complement to lead services, ensuring dealers are not left off the list when consumers turn to the engines to locate a local dealer. Unlike traditional online automotive advertising, search can also be used as an effective tool to target traffic for all aspects of the dealership, including finance, service, parts and accessories, in addition to new and used vehicle sales. But Golub warns it is not a standalone approach or a silver bullet.

“With the hype around search, some dealerships have been led to believe it can actually replace their core online advertising practices and lower their lead acquisition costs,” said Golub. “The fact is, search engine marketing is a complex solution that can be difficult to manage and even more difficult to convert searchers to sales if your website is not optimized to convert traffic to leads.”

So what makes search so complex?

Popular search engines such as Google, Yahoo! and MSN provide two types of listings: paid and organic, also referred to as sponsored and natural. Usually within a fraction of a second, proprietary algorithms, or the code that makes the search engines run,sift through millions of indexed websites to retrieve and rank relevant domains.

For advertisers who want a prominent position on the results page, the search engine companies sell paid listings. When and where the ad appears depends on a combination of factors, including pay-for-click keyword bidding and click-though rate, meaning how popular the site is with visitors. Organic listings appear without charge, but the priority they receive hinges on how well the site has been optimized, through factors like pertinent keywords, relevant content and link popularity.

To help dealers improve their visibility, search engine marketing and search engine optimization specialists have emerged in recent years. They offer expertise, for example, on fine-tuning keyword/search phrase purchases and Website content/configuration to help companies maximize their position on results pages.

The process is complex and requires ongoing care and feeding. Because search engines have unique and evolving methodologies that aren’t fully explained –in part to drive revenue and in part to keep out irrelevant or inappropriate listings –a fair amount of experimentation and tinkering is involved. Advertisers must continually monitor performance and ensure that search keyword/phase bids are tailored and the site itself optimized for each search engine.

Experts can help dealers to manage the complexity and fine-tune keyword bidding to most efficiently use campaign dollars and to increase their relevancy. For example, dealers who buy the keywords “Honda Accord,” might expend their advertising budget within a few hours. On the other hand, opting for “Honda Accord” with related tail terms, such as the city and state in which the dealership is located, will both prove cost-effective and deliver the ad to a suitable audience.

Also adding to the complexity of search: negative keywords. As automakers adopt common names for their vehicles (e.g., Chevrolet Colorado), dealers purchasing search phrases must take into account as many variables as possible. A Hyundai franchise, for example, would want to appear on results pages for a Sonata sedan but not the Sonata prescription medication for insomnia. While it is unlikely a consumer would confuse the two products, the dealer could be penalized in one of two ways:

If the shopper does click on the link, the search engine collects its fee.

If the link appears on a results page and the shopper doesn’t click, the dealer’s click-through rate suffers. With too low of a click-through rate, the ad may not appear on the results page –or it may be listed well below a competitor who bid less money for the same search phrase but has a higher click-through rate. However, dealers must understand that offering the highest bid doesn’t equate to a No. 1 position.

Finally search engine copy ads to the search marketing challenge. The copy that accompanies the ad must be concise and persuasive while adhering to the search engine’s editorial requirements. Exclamation points, superlatives and asterisks often are off limits, and each of the two lines of text may contain only 35 to 40 characters.

“When you take a close look at Search Engine Marketing, it’s easy to see why 45 percent of our survey respondents are not yet even testing the waters. The complexity is endless,” Golub concluded.

In the next issue of dealeradvantage, we’ll provide tips for managing the complexity of search and look at ways you can make search work for you.