Automotive Alchemy
Welcome to 'Automotive Alchemy', a podcast that dwells in the cavernous depths of data, unearthing precious gems of wisdom to illuminate your path to digital marketing success. As alchemists, we understand that each nugget of information is a vital ingredient in our elixir of knowledge. So ready yourselves as we embark on an enlightening journey through the arcane world of data-driven automotive marketing.
Automotive Alchemy
The Impact of Performance Max on Vehicle Listing Ads: Insights and Strategies for Car Dealers
Ever feel like you're losing money on digital advertising for your dealership? Stop the leaks and harness the power of Google's vehicle ads when you tune into this episode of Automotive Alchemy. We're peeling back the layers on this high-converting digital ad type, uncovering the complexities, and laying out the opportunities to increase your ROI.
Take a deep dive with us as we discuss setting up vehicle listing ads, effectively assigning value to each type of conversion, and leveraging Google Analytics to skyrocket your conversion rates. We'll also help you navigate the challenges of exclusions and interaction rates, as well as the importance of using Google Analytics 4 (GA4) in managing your digital advertising campaigns. Our goal is to equip you – the dealers – with the strategies you need to become informed stewards of your ad budget.
Finally, we can't stress enough the importance of cultivating a good relationship with your vendors. We'll explore the cost implications of digital advertising and how to get the best results by collaborating with your vendors. We'll also share strategies to run effective vehicle listing ads and how to funnel more of the Performance Max money into the ad type that works best for your dealership. So get ready to transform your understanding of vehicle ads and Performance Max campaigns, and maximize your ad budget. Tune in and let's start your journey towards digital advertising success! #dealeralchemist #sciencethatsells #automotive #digitalmarketing
Welcome to Automotive Alchemy, a podcast that dwells in the cavernous depths of data, unearthing precious gems of wisdom to illuminate your path to digital marketing success. As alchemists, we understand that each nugget of information is a vital ingredient in our elixir of knowledge. So ready yourselves as we embark on an enlightening journey through the arcane world of data-driven automotive marketing.
Shaun:Welcome back to Automotive Alchemy. I'm your host, Sean Reigns. Again, I got with me, I guess, the premier dealer, alchemist Sean Kearen. How's it going, Sean?
Shean:Going great Thanks. How are you, Sean?
Shaun:I'm doing well, doing well, lots coming up, there's a bunch of stuff. It's the fall season, so conferences and all those things are happening. We could get into that, but I want to get right into the episode. We're diving in a bit here on not just Google Ads in general, but some of the recent modifications relative to VLAs. If you don't know what those are, audience, those are vehicle listing ads. Google, I think, just calls them vehicle ads now and they've stuffed them all under Performance Max and we want to get into that. So we're going to explore the impact of ad performances and strategies relative to what dealers need to know to get success from these campaigns, amidst a lot of the challenges that are represented when Google makes different changes like this. First and foremost, I think, if nobody's ever really tuned in or they don't really know what's dealer alchemist all about, I guess my first question is what's your main goal of helping dealers stay current with marketing trends like the one we're going to talk about today?
Shean:So, sean, it's good to answer that. I tell you I apologize for my camera. I bought this new background so this would be a little bit easier, and guess what? It broke my camera, so it looks like I'll be camera shopping before the next time we do this and let again. So as a company, it's always been the same. We have one real goal and that's that we want to bring our clients the best technology and transparent reporting order to help them maximize ROI, because when I was in a dealership, it was always about maximizing advertising ROI. It just always has been. I think it's always going to be.
Shaun:Yeah, agreed. Well, so, without dragging it out, why is it really essential for dealers to understand the vehicle listing ad part of Google's offering?
Shean:So I think the best way to sum that up is that it is one of the highest converting digital ad types out there, and so when I look at where I can spend money, if I'm on a limited budget, vehicle listing ads are going to be my first choice. So, that being said, it's something that you have to understand. I was thinking about this as I was preparing for today. You remember when we used to all be on television and radio and how that used to go? Yeah, and so, as a dealer, what used to happen is we used to not know anything about that. We didn't know anything about the run schedules, the cost, the pricing, and then we became immersed in that world and next thing, you know what do we become? We become experts at it because we didn't have a choice.
Shean:It's where our money converted best, right? Well, the thing about the digital world today is it's really time to get educated there. It's one of those places where it's really easy to lose money and have money hidden from you if you're not careful and if you don't know where to look, and this latest change from vehicle listing ads merging into performance max is a perfect example of that. But again, it's just. It's simply the highest converting ad type, so you probably should use it.
Shaun:Yeah Well, those are two great, really important points not to bury the leads right. I mean, making sure that you're using one of the most high converting ad types is really important, but also knowing that it could represent an environment within the Google ads platform where people could hide some things around and, all of a sudden, you're not getting the value that you think you're paying for. Those are two really critical points that I think dealers that's knowledge dealers need, and I think they want it too. So I think it'd be helpful for the audience to know a little bit about. There's a foundational technology you know you and I know this but I think maybe, just maybe a simplified kind of ABC's finger paints version of what's the ad technology or the foundational technology behind the Google vehicle ad platform that makes it different than their other ad formats.
Shean:So the best way to sum that up is vehicle listing ads are all about placement. So imagine that you're looking like a third party lead provider carscom, auto trader, car gurus, et cetera. Well, vehicle listing ads put your picture of inventory at the top of a search query with relevant inventory that matches that query, and then it takes that off your website. And so let's say that your website has got massive image overlays that cover up everything Congratulations. You might not have your vehicle listing ads serving correctly because vehicle listing ads are not going to show your overlays, and so it's important to understand that if someone is looking for a black Nissan arm on a, then they're going to find a black Nissan Ramada when they go to search for that vehicle listing ads. And because it shows year, make model color trim that matches the query that you put into there. It's just best practice to be where your customers are searching at the lowest model term, right?
Shaun:Yeah Well, and I think that a lot of people that have been in it for a long time you and I certainly are part of that crowd forever and all time.
Shaun:People seemed to avoid having an ad format that directly competed with third party providers.
Shaun:You know your carscoms of the world Trader and all that they played around with and they tested a lot of things, and I think you and I have talked about this before.
Shaun:I remember gosh it's probably 15 years ago when they were running a lot of testing with Toyota in San Francisco and people were like it's coming and there was so much anticipation about it.
Shaun:And then they did some things that were vehicle ad, you know, maybe dipping the toe in the water, but it all seemed to be much more at tier one when they did some of those image-based ads that you could scroll through and play with in carousels, and then a bunch of that kind of went away after a while, and then a bunch of those things came back in by what you're talking about in terms of this other technology that they were working on, I think in the shopping ad platform too, they were figuring out oh how does this all work? And I think during the, I think it was all going on during the pandemic, when they just fully went hey, we're going to do vehicle ads and they open up cars for sale and all of that. So a lot has changed relative to this ad type in the last few years, and so I guess I would ask you know, from your side, how do you think VLAs have kind of shaped the trajectory now of advertising online for dealers?
Shean:Well, so the first thing is they were an instant hit, unlike other ad types where you really had to dive deep in order to find conversion data and prove that they were working.
Shean:The first thing that happened with vehicle listing ads is that as soon as they, as soon as you turn them on correctly, you instantly get more phone calls into the dealership, and so they're low cost, they're high conversion. The second thing that happened is it took a lot of dealers away from gigantic spins on these broad match keyword terms and kind of refocusing that money on the vehicle listing ad because it's an easier way to convert, and so I really think that the largest overall change is vehicle listing ads have created an opportunity for dealerships where I can get my inventory in front of the buyer without a lot of extra technical know-how. Now, today it's changed and all of a sudden it requires some more know-how that we'll dive into shortly. But the most important thing to know here is that they were an instant hit and immediately when you turn them on, you got more phone calls, you got more leads. Uh-oh, you're quiet, I can't hear you.
Shaun:Looks like I muted out there for a second. That's not normal. I would normally not do that. So what I was saying is that instant gratification for dealers is what they're always looking for. Right, that's always a win for the dealer because most of the time they're being sold something that this is going to work, this is going to sell you more cars, and then they get disappointed because they I think they were sold something that they felt like, well, it's kind of like a switch turn it on and it just starts working, and they don't realize that there are actually a lot of things that are far more dynamic than turning on a switch. So this ad type working in that manner, light it up the right way and it starts to pay dividends. Your phone's ringing more, you're getting more opportunity very gratifying for dealers. What would you say in terms of metrics, maybe evidence or the indicators, that using these ad types are leading to higher conversion rates for advertisers? Is there a magic in there? What's the alchemy?
Shean:Yeah, that's right. So that's a deep question. It used to be when you turned on vehicle listing ads. They were their own ad type and so you could model it among maximizing clicks or maximizing conversions, and so it just wasn't that difficult. You turned on maximize conversions and you let it run Well. The problem is that they merged that into performance max ads. So whatever budget I thought that I were spending on vehicle listing ads is now separated across all of performance max. So we'll dive into that here in a minute on what that really means, because there are essentially five different ad types that we care about in the automotive world that are going to be served.
Shean:But we should be looking at standard conversions. It's not about VDPs and SRP views, vehicle detail pages and search results pages, even though the agency managing that should be paying attention there. We should be measuring vehicle listing ads based upon the number of leads and the number of phone calls. So are we actually tracking those phone calls? It's going to be the first thing. I can't tell you how many stores I talked to and the phone rings it goes right to a sales person. There's zero accountability for what's going to happen to that lead next and at the end of the month, the deal is wondering why they're not having any leads. I mean, I appreciate that they become our opportunity, but I got to tell you for that dealer it wasn't your ad agency's fault, that was the dealer's fault. So we're in this constricting period again where all of a sudden business is getting more difficult. We're having to work harder at sales process. Everything that we do actually matters.
Shean:And so with vehicle listing ads, they have to be set up properly now that they have merged into performance max. If you just blanket set them up according to the old system of check conversions and move on with life, it's going to be a problem. Think about it like this and if you check it as conversions, most advertising companies build conversions the same way. A VDP view, an SRP view and a click to call are all a conversion. Well, if I don't assign a value to those, let me ask you a question, sean.
Shean:Do you think a click to call and a VDP view are worth the same amount of money to the dealership? Yeah, probably not, right. And so you have to set that up properly in the back end. Otherwise vehicle listing ads is going to treat a phone call just like a VDP view and that's a problem. So, as it is now, you can completely connect that account into Google Analytics and if your account is collected into Google Analytics and all of your conversions are set up properly, google AdWords will modify and increase your ability, lower your cost, increase conversion across the board, because it's allowing you to use GA4 conversions to better utilize data. So there's just so many things that have changed and they really matter, right.
Shaun:Yeah, and I think sometimes I mean there's a lot to even unpack in what you just shared.
Shaun:I think a lot of dealers for a long time have not realized the sophistication of the Google Ads platform, let alone the others that are out there. Google's is very complicated, but in some beautiful ways, if you know what you're doing. And so when you talk about setups for the dealers that are listening, the consequence or why you wouldn't want Google's ad technology to be treating a phone call the same way that it would another conversion type like a VDP view or whatever. Google's system is so smart that it is going to dynamically control budget in a way based on how, whoever you've chosen to set up those campaigns right, and getting that wrong means that you literally would be putting gas and matches to a big pile of cash on things that you do not want your Google Ads really to bring you as much of, or maybe none of right. So those setups matter far more than most dealers realize, and making the choice of who's going to do that for you is a can be of great consequence.
Shean:Yeah, it's a. I would tell you. This is the first place where it is really important. If you're a dealer and you're running vehicle listing ads, it's important that you ask your provider how do they manage those ads? What is their strategy in managing vehicle listing ads? And they should have a concrete answer for how it works and what they do about it, because if they don't?
Shean:they're checking a box, dropping money in a budget and forgetting about it. Yeah, Like I found companies that run vehicle listing ads for $200 a month. So let me ask you a question. Let's just say you're spending $200 a month for the management of that program. Do you really think that the advertiser spending any time on your data leveraging and understanding what works better to modify the results for $200 a month?
Shean:Because you're not even buying an hour of that agency's time and it takes longer than that to dive into it once, let alone multiple times, right? So I would tell you that, like, why does this matter? So there are well, I guess if you count all of them, that really mattered automotive there's like six different ad types that are all sort of performance max. So vehicle listing ads are the ones that we really want, right? That's the most important one. That's the one that we get the bang for our buck for. There's some other ones inside of there. They're pretty high performing.
Shean:There's a Gmail section where they put ads inside of people's Gmail accounts and, frankly, those ads work well. That's probably one of the better sides of performance max. There's also, well, then there's the low performers. Like, for example, when you run performance max, one of those areas is text-based search ads. Well, if you're letting Google arbitrarily put a text-based search ad wherever they think it's going to make sense, do you think that they're going to spend your money appropriately, or do you think they're going to make their money appropriately? Which one is?
Shean:There's other things too, like Google discovery ads, for example. Well, google discovery sounds like a great thing, except it's mostly Android ads. So let's just say you're talking about ads that mostly run inside of a Google app or an Android phone. What percentage of the market is iPhone, and do we really want to exclude all of those? I don't know that that makes sense. And then there's my other two favorite culprits in the Google world. Right, there's display in YouTube and the bottom line is right now, those ad types just simply don't perform as well. I wish they did, because we would like to utilize them more than we do. But the challenge is, when you look at YouTube or display performance on the website, they click on those ads. They're one to three second time on site, and if you've got a customer that's on your website for one to three seconds. My question to you is do you really think they looked at something, were able to form an opinion and even thought about converting, or would you call that junk traffic? Yeah, yeah.
Shaun:So that's why I describe this Sean.
Shean:In the back end of performance max, a vendor has the ability to guide that money away from some of those other sources. So this merge happened in the beginning of October, right? And Google doesn't tell you how. What they say is they send out the memo and say congratulations, it's great news. Vehicle listing ads are now performance max ads. It's in one easy to use interface, which it is very easy to use, and then, if you dive deeper into it, what you realize is you can turn off some of those other ad types and you can guide that money to where it sees fit.
Shean:Well, what does a vendor do? Because we've got partnerships with some vendors that are out there. There's some big name vendors that are out there that you wouldn't think do a great job, but their search teams are deeply in bed with trying to figure this out at the same time we are. There's also companies that just don't care, right? So if your company doesn't care, this is a way to lose some money, but in reality, you should be looking at experimenting for how to move that money from the underperforming ad type to the higher performing ad type, because otherwise all we're doing is burning caps.
Shaun:Yeah, yeah, and there's a lot of those. I mean, we don't use the podcast for bashing anybody out there. It's sad that there are such a great number of providers that they would disagree with, I guess, with the description of they don't care, but they would have a hard time proving otherwise right Because they don't want to be told like Everyone does the best for the amount of money they're getting paid. Yeah.
Shean:So no matter who you are right we used to say it all the time you know hard to drink champagne on a beer budget. I think every car guy in the world has used that phrase in one or two closes over time, right?
Shaun:Oh yeah.
Shean:Well, the reality of it is if you're paying your vendor peanuts, what do you expect to get in return? Right, and I would tell you that you know most of them out there do want to do the best job that they can. You just have to be able to have these questions asked to the vendor and look for the response, because the response really does matter. Yeah, and Google isn't making it easier, they're making it more complex. They're making the technology interface into the back end of Google more and more important over time.
Shaun:Yeah, I wanted to ask you about that. So the impacts of these changes that Google's been making certainly have to be having some bearing on the performance, interaction, performance and how can dealers, how would you recommend dealers kind of adapt to some of these changes, because they're significant?
Shean:So let me give you first some of the impacts that we've seen. You know, because the real world examples are a little scary. We've seen drops of approximately 35% in conversion rates from Google since this change occurred, and so there are much lower impressions. Since these change occurred, clicks are down between 20 and 50% from only vehicle listing ads, performance max. Well, why is it down 20 to 50%? It looks in your standard performance max total setup like you've got all these clicks Once you really dive into the to the program. That 20 to 50% got distributed amongst other ad types, and so how do you adapt? Before, vehicle listing ads were becoming a known commodity, where you knew you spent money there and you got a pretty solid return without a lot of effort. Now, unfortunately, we really want to know how were my actual vehicle ads performing versus those other parts, because in reality you can't.
Shaun:Yeah, yeah, those man. That just the statistics that you're sharing there. That's something where the dealers certainly want to be paying attention to that and you know asking their vendors, I think, some pretty important questions. I mean, you've seen these, all these new changes in terms of their ad performance. You guys have things that you're learning out of clients right now that you're maybe, you know, focused on. That would be case study related or kind of stories of what's happening with customers.
Shean:Yeah. I think a good way to word this, sean, would be I'm not throwing stones, even though it sounds like it. What I would tell you instead is this is the time to collaborate. This is the time when you've got to be telling your vendor hey, my phone calls are down and we have to start experimenting and looking at why. Because there is no such thing as a playbook that exists to how to maximize these things in Google.
Shean:Instead, what happens is every vendor out there, just like us, is looking at that challenge and saying how do I need to modify and manipulate this in order to get the best results? And so the, the onus is actually on the dealer to tell the vendor the truth, right, because I've had dealers that, no matter what's happening, they tell me how incredible their month was and they say, yeah, but your ads suck. And then I laugh and I say, well, obviously I had nothing to do with the record month that you just had, right? And so you know, because it takes a marriage, right, the, the, the advertiser can lead the horse to water, but ultimately the dealership has to, has to take that phone call, set that appointment, sell that car.
Shean:Well, when changes like this occur, we require. We need the dealership to be transparent with us, and you really need to be changing these things on a monthly basis, like I would say, if your phone calls are down right now, is it the market? Is it the strike? What brand are you? Is it your market? How much have interest rates? Really affected.
Shean:You, like I, did have a Honda store, just have a single largest sales month in company history, and not by a small margin. I mean, this is a place selling over 300 new Honda's a month.
Shean:They're not a small dealership right, yeah, but when I talked to the dealer about why, he said you know, sean, we realized that in order for us to succeed, we had to get better at process, because the customers aren't any easier and the math matters now. Well, here's some case studies and some things that we found right Used car clicks with the used car store down 40%, cost up 100%. A Dodge, jeep Ram store up 50% in price. Clicks down 10%. I've got other stores where the metrics look better across the board, right. So I've got other stores where you look at and you say, wow, thank you, google, this is incredible, I'm up 20%. I'm up 10%, I'm up 15%. So what we've learned is that every individual market is different and we have a theory.
Shean:My theory is that what Google's done is it's taken all of those performance max dealers and all of those vehicle listing ads dealers and it's lump them into one bucket, and now you've got more people serving ads for the exact same ad type in the exact same area. And so the challenge there is that when you've got more dealer serving ad types, you've got two things are going to happen your cost are probably going to go up and your clicks are going to go down.
Shaun:Yep.
Shean:So it's it's it's the nature of the beast. Well, why does it happen? Well, it's because vehicle listing ads work. That's why it happens, right.
Shaun:Yeah.
Shean:I mean, they do work.
Shaun:Interesting. So my guess is that exclusions would be very crucial in terms of, you know, if you want to have an optimized ad performance, if you want to avoid wasting a lot of money. What are your thoughts on that?
Shean:Yeah. So I would say this is the trick in the whole system, and and I mean you know every, every advertiser out there that might happen to listen to this is going to tell you the same thing. They want you to communicate with them so they can experiment. We want to turn off some of those non converting ad types on a monthly basis, measure them over the course of the month, given an entire month, compare it to market conditions, look at where the deal is, market share is up or down compared to other months, and not change this and five other changes, because then we can't track it Right. So if we're truly going to change something in advertising, we should probably change one thing at a time. So let's say that I added or subtracted $5,000 to budget. Well, that's your change. Right In this world I would say all other things should stay consistent.
Shean:Then you go into the back of performance max. You give the vendor the ability to turn off or turn on some of those ad types so they can truly start estimating what's going to be the best process and then measure those results. Because if we do that, what we do is we start to understand where is that money going to get wasted. Where is it going to perform better? Because we have some theories, but right now, their theories with what am I? I guess was September 1st for that change. I've got 40 days with the data. That's not enough to make a blanket decision, right? Yeah, so I guess, if you're excluding ad types like that, that's really the key, right?
Shaun:Yeah, Are there some core challenges with exclusions and interaction rates? I guess specifically in the context of vehicle ads.
Shean:Yeah. So what's difficult here, right is today is a highly technical conversation where we can put people to sleep, and I am really aware of that. Yeah, at the same time, I wish it didn't matter, but it does, right, mm-hmm. So my kid doesn't want to learn math at school every day, but it turns out you learn math every day, especially in a dealership. You can't do math. How are you going to handle finance or a financial statement or anything else, right? Yeah?
Shean:Well, this part of advertising is becoming that thing. It's becoming that thing that you have to have a better understanding of and, unfortunately, it's kind of like learning a foreign language. You've got to get immersed in it and start paying attention. So, when you look at exclusions, what I would say is that you have to understand first. What is my data on YouTube? What is my data on display ads, what is my data in those various ad types? And how did that change when I added vehicle listing ads into there? When I tried to separate out some display advertising and minimize that, how did it change my overall setup? Because what we're noticing is that when we remove some of the lower performing types, our clicks go down, but our conversions go up and ultimately we care about conversions.
Shean:And even then, right conversions is a tricky subject. I'll give you an example. I think of a conversion as a dealership, which is a phone call, a form, fill a chat or a text Pretty simple, right. But to an advertising company, a conversion is also an SRP viewer, a VDP view, because we're tracking a buyer's journey and we've got to understand where did they land, how many VDP views and SRP views did they click before they finally chose to convert and what did that conversion look like? And then, in today's world, how many times did they revisit after that first initial click before they convert it? Because in today's world they probably came out on a social ad, they went to 15, 20 seconds worth of engagement, then they came back as a direct visit because the URL was saved in their browser and then they finally converted as an organic, because they converted on their cell phone instead of their desktop and they typed in the dealership's name and went searching that way, like these things happen, right.
Shean:So I just I think getting educated about where you're at currently and starting to ask questions is the key and then understand that in advertising and digital advertising, you're really experimenting 100% of the time when a dealer in your market chooses to spend a bunch of money in your market, congratulations, all your costs just went up. When that dealer gets super frustrated because they didn't net any sales from the extra $20,000 they spent in your market on advertising this month, congratulations, you just got more cost effective. You didn't understand why at the beginning of the month because you didn't know what they were going to do. But their owner started beating on a dealer, on the general manager. The general manager chose to spend some money in the market. As they spent that money in the market, everything changed.
Shaun:So I mean, yeah, those are cost implications, right, and I'm thinking there's probably more cost implications when you're utilizing VLA's those are really great ones. But I'm thinking small, medium sized dealerships too. Maybe they don't think about that. Competition is going to do that across the whole kind of digital advertising spectrum in Google ads, but there's probably some other things, budgetary minded issues, that come up as well. Right, just on, you know, have you thought through what this is going to do to how much you have to spend on a month-to-month basis? And you can't overly trust, especially providers that are not talking in detail. I know you're conscious of it. I am always too like how technical we get as we talk about some of these things, but we happen to be at a point in time in the industry and in business that it's mandatory. It's not even an option. So I would love to hear more of your thoughts around some of the cost implication aspects, because dealers that's a hot button always.
Shean:So I would just give some blanket, simple advice there. Actually, the first blanket, simple advice is that the advertiser's job is to explain it to the dealer in terms that make sense to the dealer. If I'm talking about impression share, cost per click and all of these things to a dealer that's never heard those terms before, I might as well speak Spanish, it doesn't matter, right? And if I've got a dealer that I've spent the last six months kind of looking at this data with them and saying here's where you're at, here's where you're at, here's where you're at, then I can say this is how it affected your cost per click, this is how it affected your impression share, and I think we should do this about it. So, really, as a dealer, what I always tended to do is I always tend to look at a cost per vehicle retail right. What's that? Nada statistics 646 or 678 or something like that.
Shaun:Yeah.
Shean:Well, and if the NADA statistic is that, then you got a lot of dealers that are way over that. That's what that means. They're not all under, even though they want to pretend that they are right. So if I'm spending $300 a car and I'm happy with where I'm at or I'm, then fantastic, you're hitting a home run every single day. If I'm spending $500 a car and I feel like I'm doing a good job and I want to sell more cars, well, guess what? You're probably going to need to spend more money to sell more cars in today's market, because that's how it goes, and you should have a good enough relationship with your chosen advertiser to be able to say if I wanted to get 10 to 20 more car deals out of this, what would that look like? What would my spend look like?
Shean:Well, 20 cars at $500 a car how much is that? That's $10,000 in advertising. $10,000 in advertising across a varied set of mediums. It can really work well, depending on what's done with it. So those are just some blanket pieces of advice to think about for a dealership. But I would also say, based upon what's out there, if a dealer's not running vehicle listing ads right now, they should put a minimum of $500 in it. It's the easiest $500 they've ever spent. It will pencil no matter what, because I guarantee you will sell a car off of it. Whether it's managed poorly or managed incredibly well, it's not going to matter. It's going to be better than doing nothing because the reality of this ad type it just works.
Shean:Then, once you get that increase, then you start saying hold on, what if I spent $1,000? What if I spent $2,000? Yeah Right, because there's all these weird implications right now of what's happening. I've got dealers that I used to have a $5,000 vehicle listing ads budget that just spent $3,000 because it wanted to put everything in a performance max into these other areas and we chose not to spend the money there because it was going to be a wasted spend. A good vendor has the dealer's best interest at heart and is saying, hey, this is what I think we should do. Hey, if I've got a $20,000 budget at the beginning of the month and I'm not going to spend all of it, I'm not going to spend it and waste it. Why would we? That's a waste.
Shaun:Yeah, it's like the race started. So start, at least start, that's right. Go from there, get your car faster, get to that point where you realize that it is something where step one is to start. You got to be in that ad type and then grow from there, sometimes just keeping it simple.
Shean:Increase budget a little bit. Gauge the impact. Increase budget a little bit. Gauge the impact. When you increase budget and there's no impact, consider cutting it back a little bit. The goal is to find that sweet spot always. At the end of the month if I've got too much money being spent on all these other platforms that don't drive business to the dealer website. That's probably a part of the problem.
Shaun:Yeah, I like your advocacy of you're always testing. It's just always. You're always in this perpetual state of exploration. It might be in familiar ad types, but yeah.
Shean:Once upon a time the goal was to move money away from third parties. I think we all remember those days, right. Yeah Well, any dealer that's tried doing that right now was realizing that right now, with used cars and the way that they have been for the past three years, you want to have third parties involved. Probably don't want to have three or four of them involved that would probably be a waste of money. Or five or six, but two of them every dealership should probably have their favorite two sitting inside of there. I mean, we frequently tell the dealer if you've got the right pricing strategy and you really are trying to turn your inventory in an appropriate manner. Of course you want to be there. All these things work together.
Shean:But if I've got five or six or seven of those things and I don't have enough money left over to spend money on vehicle listing ads or my own search budget or my own social budget, maybe I should look at my third party expenditures and cut a little bit of that back and get down to the two that have the best performing, and that way I can drive business to myself right. Spend money building your name. Yeah, I mean, we love the big providers, the big third parties, but the reality of it is everybody knows who they are.
Shaun:Yeah, I've told dealers for years just remember when you're considering how much you're going to do yourself, meaning, hey, let's see what we can do with Google ads or whatever, versus how much you're going to rely on third parties. Everyone's fishing out of the same pond, right, and all of the third party lead providers. They pretty much use the same bait, like all the things that they do. Let's take your inventory and put it out there and then they do their own advertising to get people to come there. And that's why people are so familiar with carscom and auto trader and car gurus, big TV ad budgets, all that, which is fine. So if you pick one or two of those, like you're advocating, I have no problem with that strategy, because you can probably find a couple of them that are fishing out of the same pond.
Shaun:But what dealers get, I think, confused by is when you add every single one of them that's in the marketplace and they're all fishing from the same pond, and this is the thing that's really important using pretty much the same bait, right, that's right. You end up forgetting that. Well, your dealership should also be having lines in that water, but your bait is different, right? And so you pick up that one-to-one right out of there. That's different than the model that your third parties use, but they're all in that same body of water and that's really important. You guys do that really well. I think that's a critical piece of knowledge for dealers to understand. Wanted to ask you for any examples or scenarios where vehicle listing ads could be misused, or maybe the advertisers are relying on them too heavily.
Shean:So I think that's an excellent question. I would tell you that vehicle listing ads are not a replacement for text ads. One of the most common things that I see in today's world is that I'm trying to think of the most polite way to say this, but if I'm looking at my broad match model keyword terms like if I'm a Toyota dealer and I'm looking at my Toyota Camry ad and my Toyota Camry ad as a cost per click of $5,000, $6,000, $7,000, $8,000, $10,000, something's not right, that's too high. Well, what some of these advertisers have done is they've said well, I don't need to run those model terms, I can just run vehicle listing ads in their place. So let's say that I'm in a Hyundai store and I'm looking at the cost of my Sonata ad and I say, wow, that text ad sure is looking like an $8 click. Why don't I turn that into vehicle listing ads for a dollar and I'm just going to get a better overall results?
Shean:Well, unfortunately, it doesn't work like that. What happens instead is that because you don't show up properly in that search area, that customer is going to go to the manufacturer website. And if they go to the manufacturer website, what are the chances that they become a lead, because, ask yourselves, is the manufacturer website really built to convert leads or is it built to give them all the research and the data on why this vehicle is the best choice for them? Yeah, and so, as a car person, right, 25 years of retail the last time I checked, and maybe it's changed, right? I mean, let's be fair, I stopped selling cars in 2015,. Right, so I left my dealership in 2015. So maybe some things have changed since then, but maybe people don't require that you third of I car anymore. Maybe they just require all of the research in the world and get super educated on every single detail and then make a great decision, or maybe it doesn't work that way.
Shean:So, so what I would say is is vehicle listing ads are a standalone ad type. They're not a replacement ad type, and so a standard search strategy should contain the brand terms, which is the dealer's name itself, the regional terms, like my brand near me in the city, things like that, and then should contain the model searches. And this isn't a AdWords lesson plan, but you know, on a podcast, as we found out last time we could, we probably should have cut that into two, but the reality of it is. Vehicle listing ads are a standalone ad type and that's the most important thing. They are not. They're not a replacement for something else.
Shaun:Yeah, that's. That's another really good point for dealers to understand. I used to know how would you advise dealers in terms of just navigating through conflicting data, especially relative to clicks and conversions within Google ads.
Shean:I would definitely say dive deep. So there used to be a day where you could look at the rollup report and your cost per click was $2.22 on your account and you felt like you were hitting a home run. So the polite way to say this is what's your market share look like? Are you at 100 percent or greater? Are you hitting your sales goals every month? Chances are you've got some rock solid process inside of there. You should still dive deep because it's getting harder If you rely on that up top view. What you don't see is every individual campaign's cost per click. My brand dealership click might be 18 cents, might be 75 cents, might be $1.50, depending on what my dealership name is.
Shean:If your dealership name contains a city in it. Congratulations, you're going to pay no more for your dealership name. Depending on when you named your dealership, you may have a dealership name in it because once upon a time that was the best practice because of how Google search worked. The next thing is model campaigns. I looked at a Volvo dealer the other day where two of the model campaigns were $8 and $11 respectively. I told the dealer I'm sorry, but those are three times too high, as they should be. You're a Volvo dealer. That should be $2 to $3. If it's higher than that, your ads are either being built wrong, they're being managed incorrectly or there are settings that are wrong. I don't know. But $8 to $11 for something that should cost you $3. Okay, not a big deal. I've wasted $5 on a cheeseburger in the past that I didn't like, but you didn't waste that $5 one time. You wasted it a thousand times. That was $5,000 you wasted, congratulations.
Shean:Yeah, I think, diving deep and just like in learning another language, when you dive deep you start to see it. In the first time it looks like Jewish. By the third month you start to say, hey, I remember what that cost per click is. And all dealers have this thing in common. I would tell you that we, as dealers, we remember numbers. People don't always understand how good with numbers dealers really are. We are incredible at back in the napkin, math and recalling numbers. So by the time you've seen it two or three times, you're going to see the pattern. As you see the pattern, then you begin to ask those questions. I think what that's going to do is it's going to help the vendor know that you care and it's going to let them do the best job. Or if you've got someone that says, hey, a $10 click is just what it costs, well, know that. That's not true. Right? Same thing of vehicle listing ads. Inspect the clicks, inspect the cost.
Shaun:Yeah, I mean, best practices are not usually best practices. They're usually well, that's what everybody's doing, doesn't like where did it come from? But if you were to define best practice as it's supposed to be, that's sharing. A best practice for dealers is to go far deeper than what they see at the very top level because and you've said this before, I think in the previous episode you mentioned this we have the industry agencies, have taught conditioned dealers to think certain ways, to believe certain things, to have certain expectations of various things in the industry. That would include their DMS, their CRM. Very much includes digital advertising. It includes it on Metas platform, google's platform and in this particular case, with Google.
Shaun:We have been feeding dealers for a long time all of the top level, what I call the upstream metrics your impressions, your click-through rate, your cost per click. I always try to help dealers understand those are not bad points of data. They just don't tell you as much as you need to know. That's where you get into that, like when we're doing a podcast like this, a little concern that it gets too technical, but simplifying. That is saying we'll dive deeper than those top stream metrics. Get into things that are more conversion, relative and then specific ad type to conversion, relative and what's happening with that on the downstream side of all those metrics because that's where all the great data for decision making is found it's hard to make those decisions at the top level data.
Shean:It is. I'll tell you a story. We were sitting with a dealer this week and the new car manager, the general sales manager and the general manager on this phone call with the marketing director.
Shean:As the marketing director comes in there, he says hey, guys, I want you to know these guys have a lot of questions. We begin with a phone call. I asked them how they do, when they said hey, we're crushing it, not only number one in the region, but we picked up market share and we're getting closer to top 10. They're doing something right. I said well, I'm a little confused. What questions do you have? I thought it was one of the best responses I've ever heard. The general manager says it's going to get more difficult. As it gets more difficult, we're going to need to understand these things a little bit more. We want to start asking questions so that we can have a little bit more control in here. The first thing they did is what? We're looking at the AdWords account with them. And he said please, what does that mean? Please tell me what impression share means. Please tell me what this means.
Shean:As we're going through dividing the different columns, you can see his brain working. You can see him putting two and two together. By the time we get done with that phone call, he started asking a couple of other questions. What would happen if you know what happens when a dealer starts asking? What would happen if Most ad agencies are going to tell you that a lot of their best programs and products came from when a dealer said? What would happen if so? I just think this is how it goes. As we talk about this, it's the time to get educated. This vehicle listing ads, enter, performance, match and all the Google changes. I mean, oh my gosh, the Google changes, ga4, everything that has changed in the car business. Now is the time to pay attention, right.
Shaun:Yeah, I'd love to hear more of your thoughts on it, because this, especially with Google, I mean, they're, like always, the epicenter of digital marketing. I mean I say it all the time, I've been saying it for years Like, search is the tip of the spear, both organic and paid. Like I don't tell dealers and I don't think you guys are I think that you're all about making sure that they make these decisions in an educated manner. Yeah, that means, yeah, you got to really really prioritize the Google ad platform. But when Google does a lot of changes, all realignment it always has the ripple effects. So, tell me a little bit about what you know. Thoughts on how this is complicated ad performance analysis for providers, Like it's. You just referenced GA4, that's got to be a factor, but how's this affecting the performance analysis for providers?
Shean:You know, and I was thinking about it, we may want to get into a conversation by GA4 in one of these upcoming sessions just because it I mean it's right now. What happened is that Universal Analytics has gone. Every dealer is learning to read GA4. And so far, 50% of the dealers that I talked to at minimum say I don't understand this new format. I don't understand it at all and it doesn't seem like it's working. So there's this whole thing right when all these vendors out there and you know I'm probably not going to be popular for saying it so, but there's going to be a few vendors behind the scenes that if they listen to this, the right now they're about to jump up and give us a standing applause and that is that it was thought to be a wise decision to do this. Automotive standards council version of analytics and conversions. Well, let me tell you what happened in GA4. It's almost always broken and there's so many things that they're putting as a conversion in the backend of GA4 that they're trying to analyze and manage that. What it's actually done is it's made it very difficult for the dealer to read and, depending on how advertising works, it actually breaks ad types. So GA4 fundamentally changed the way it works, because it allows the events and conversions to work better. We track events and conversions because tracking events and conversions allows us to know how did the advertising perform. And now, when I connect the AdWords account into the GA4 account, adwords can use the conversions from the Google Analytics account in order to modify its behavior and drive a better result. So what happens if my analytics account is broken? Congratulations, I just broke my ad account.
Shean:We're in the middle of releasing this platform. We call it Lab Access. What it is is it's a direct API feed with a deal. There's Facebook, their meta advertising platform, their Google AdWords account, their Google Analytics account and their Google Business Profile account. It takes all that data, brings it into one place and it standardizes it so that the dealer can see it. Then it allows them to look at all the different conversions. You want to look at your click-to-calls inside of there? No problem. You don't have to navigate 15 screens of Google Analytics. You've got one screen that's always up, that's in real time, that all you have to do is scroll down to it, hit the button and it shows you in real time.
Shean:I think it's probably the coolest dashboard in automotive and I've been looking at these things for 15 years. We're very proud of it, but I was showing it to a dealer because we're trying to sell them a new client. We're excited about their business. What the dealer says is well, I'd actually just like to do that and manage all of our stores on it, because GA4 is broken and 80 percent of our stores. We can't keep it working. I'm tired of vendors telling me that they can.
Shean:Well, what we decided to do for ourselves as we built our own set of events and conversions and we completely turned off all the other ones because so many of them don't work. Not only do they don't work, but you have to keep them up and run it. So GA4 broke analytics. Now you have to fix it. Performance match changed the way that we view conversions, because it now allows us to use Google Analytics conversions to drive a better result.
Shean:So if Google is giving us a playbook and saying, if you follow these instructions, I will help your money go further, we should probably follow that. That's very different than a Google Ads representative calling the dealership or calling the advertiser and saying, if you spent money on this area, you would get more conversions. That doesn't ever pencil right. That's like the running joke in the back end of all ad agencies, because the second you get that Google phone call, that's advice you don't want to follow because all that's going to do is charge more money. So I just think that it's gotten complicated because these things are broken and the out-of-the-box solution from Google is not adequate. So you have to fix it, and you have to fix it now.
Shaun:That's interesting. I mean I hear you saying that if I'm a dealer I better have an analytics expert, right, and even that is hard enough to find. But Google provides a lot of its surface level, but they certainly have kind of the starter course to get in there and be certified and then dig in. There's a lot of stuff. So I'm kind of here and you say, hey, part of your strategy, dealers, is you need somebody, even if it's a third party, even if it's part of somebody at the agency level that they're. Because what you're just saying is, hey, dealers, if every one of you could have an analytics expert, you'd take one and you should have one Based on what Google's doing here. You've got to have that. But that's not possible because there's not a true GA4 expert or even an analytics expert. There's not enough of them to go around every dealer. So they would want one. To be quite honest.
Shean:And, frankly, they're really expensive. Yeah, exactly, we pay fortune for the person on our team and they're worth every penny.
Shaun:So if you have a provider in this case, dealer alchemist where you have analytics expertise built in in-house that is there for the betterment of your dealers, are you saying that, hey, if you're a dealer and you should be finding out if your providers have this piece that you don't have, there's not going to be a reasonable way for you to bring it in-house that if you don't have that? That might make you rethink like, well, who are you using? Not to mention all the other things that are really data-based that we've been talking about in this episode. You need this experience now more than ever. Perhaps.
Shean:Well and so, and like shameless self-plug, we are more than happy to do that for a little tiny fee for any dealership out there.
Shean:And when I say little tiny, I'm not even kidding, right, it's going to be the lowest fee structure. You're paying for any provider for anything, but it does matter, right? So I would say first, you got to get analytics set up, which means you have to own your analytics accounts, and most dealerships don't own their analytics accounts. Their website provider owns their analytics accounts. And the second, you try to go fix the analytics account because the website provider likely doesn't have it 100% set up properly, because they don't have the time either. Your website provider does not get paid to sit there and build out GA4 conversions, if you think that's their job.
Shean:You are sadly mistaken. Like they do not make enough money to manage that for what you pay them for your website period. So you have to have someone that's managing it and continuing to manage it because it continues to break, and then after that you've got to be able to read it right.
Shaun:Are there still instances now in the GA4 era where a website provider could put an instance of GA4 on the site and then someone else could as well, so you could have multiple instances, like there was with universal analytics, because I used to come across this all the time with dealer suits like, hey, here's a log into our analytics. I'm like, well, what is all this stuff in here? Like you got there's more than just you guys that tried to stand up analytics. You've got one from an old website provider, an old agency, and are you still doing geofencing? And they're like what we don't even know. Is that still a thing within the GA4 world?
Shean:It is. For a while you'd only see one account, but now you're starting to see multiple accounts on there because a number of companies out there have bought in full to the yearly fee they pay to be a part of the Automotive Standards Council.
Shaun:And the challenge is that, oh, you have to pay to do that.
Shean:Oh yeah.
Shaun:OK. So the vendors that are part of that Standards Council, that's not just everyone's getting together and trying to figure out how it's going to be best for dealers in the industry. There's a? There's a OK. Ok, there's a fee. I don't think I knew that.
Shean:Yeah, put a stamp on that baby, because you get a sticker on the back of your windshield, on the back of your car for that one, right? So what happens really is that if a company has owns your analytics account for you and they're trying to manage to that because they're, frankly, they don't have the time to go do it themselves, they bought in because they don't have the time to go do it themselves and manage all those conversions, and every single provider you have on your website sends its own events into GA4. So I mean, it's a unique animal.
Shaun:Yeah.
Shean:Well, what happens is the fix is put your own account on there and manage your own account period, because that account that you own should travel with you for the remainder of time that that dealership is in existence and that dealership should travel to a different provider for a website and at some point, when it's time to sell and go sip umbrella drinks underneath the on the beach, that account should go to someone else, because the new owner of that dealership will need that in order to make relevant decisions. Yeah, and the website provider.
Shean:I'm sorry, that's just not their job. They're doing analytics because they know they need to, because the dealers don't always manage it themselves.
Shaun:Yeah, that's almost like if you do that wrong and let a vendor set that up and own that for you, it's almost like you put yourself potentially in a future data hostage negotiation situation. Yeah, that's Well. I want to circle back. I got a few more things. I want to ask you a little bit on VLAs, and I agree, I think probably we'll have to reopen a GA4 episode in the future because there's still a lot going on there and I know that dealers really like it when you kind of simplify and break down what they need to be conscious of and where they need to be making decisions. So back to VLAs. Maybe it's. Or how have different vendors adapted or maybe upgraded, innovated their strategies to optimize the use of vehicle ads?
Shean:So I don't know what everybody else has done, but if it helps, I can tell you what we've done Right. So yeah, that'd be great. What we've done is we started studying the outcomes. We knew in advance that it was going to become performance max and that was going to get dispersed into a variety of ad types. So we asked ourselves the question internally how do I put more of that money into the ad type that I want? And then from there, as a vendor, we believe that it's our responsibility to be a steward of the store's ad budget, and so if it's a lower performing ad type, our job is to tell them and say, hey, I don't agree with this.
Shean:Like, display is my favorite topic of all time because we barely run it for dealerships. Frankly, it just doesn't pencil usually. Sometimes it does, but usually it doesn't. And so what happens with the strategies is that we decided to dive into it, look at all of those various performance aspects and start experimenting with cutting off the non-performers and looking at how Google is going to penalize us for the non-use of the entire platform, trying to funnel that money into all of it. Like, I don't believe that funneling 100% of into vehicle listing ads is the best alternative. As an example, I think it's going to make the ad cost go up too high and you're not going to be able to spend enough budget to make it relevant. But some of those other ad types, like Gmail ads, for example, like those things perform pretty decently.
Shaun:Yeah, many surprising insights, maybe less known facts about VLA ads and what dealers would benefit from knowing.
Shean:So I would say the most important one is that they run off your website pictures so, depending on your vendor, they can get a picture.
Shaun:Meaning the inventory photos that are attached to your. Okay, yep.
Shean:So, as a vendor, we can either get a feed, which might come from the inventory management system, or I can build a feed off the website, depending on how we might do things. Well, if you want to run vehicle listing ads, you've got to give your vendor an image that's clean, that doesn't have an overlay, and so, in the backend of your inventory provider, you can have them send over an image for this system that doesn't have the overlay on it, and that is really important. The overlays break everything, right.
Shaun:If they have them, your ads won't run, is that right?
Shean:That's right. Your ads don't run on vehicle listing ads. If you've got overlays, yeah, yeah, that's important.
Shaun:So if dealers just trying to read between the lines on that, that means that if you use, nothing wrong with that it's become pretty popular over the years is the overlay on images. But if that's the feed that goes to dealer alchemists and they're going to start putting vehicle listing ads up for you, those overlays are going to get your ad rejected out of the Google system until you have a cleaner version of those. And sometimes dealers don't realize that it's not your provider that's making this difficult for you, but it's right.
Shean:If you're just sending them an inventory picture that's got an overlay on it and they can't fix that problem.
Shaun:And maybe no one's ever told the dealer. No, it's just as simple as that. They need clean versions of the photo for their advertising platform. So yeah, but that's really, that's great.
Shean:So let's say that I'm on like HomeNet, for example, or Viado, I can send them a feed that doesn't have an overlay on it so that it works better. Or if you've got a provider like us that builds a feed off the website, we have the ability and a provider should have the ability to choose which image goes in those ads based upon how we internally set things up. And that's the best practice, because overlays on a website, they still work great. I wish they didn't, because they take up a lot of quality image space, but the bottom line is that they still tend to work and so, as long as they work, what's the dealer going to do? We're going to keep using them.
Shaun:For sure, for sure. I don't know if you want to get into, because you know I certainly don't want to push this episode to be the longest one we ever do but any actionable kind of strategy points that you know, just as far as making implementation easy to get started with vehicle ads.
Shean:I would just say in the very beginning ask them how they manage your vehicle listing ads when performance max ads. Ask them what strategy is. Yeah, because you know what do we say? No answer is an answer, no answer is I don't have one Right. So yeah, I would say first things first, ask what strategy is and second, be very clear that you want to see most of your budget going towards the vehicle listing ads. Be very clear about it. Tell them you're looking to analyze it based upon that. That's the key.
Shaun:And you would tell them hey, like, even if you start with a five because you mentioned it earlier in the episode $500 budget, but start right the race they've already fired off. Yeah, we got to go. Yeah, I like that.
Shean:So you know, if you start with a $500 fee to run vehicle listing ads and you're putting $500 and spend there, congratulations. That dollar click just became a $3 click. It's still pencils better than most of your other advertising. Still, yeah, pencils better.
Shaun:Yeah, still, what would be? What would be some anticipated challenges that dealers should just kind of know, going in and brace it Just know. This is what's going to when you implement performance max, and you've mentioned a few of them, but maybe just a couple of them as we get closer to land in the plane on this episode.
Shean:I think, just going back to some of the basics, first thing is get started. Second thing is be clear about where you want to see it. And the third thing is absolutely you have to track the results. You can't manage what you can't, what you don't track. If you are not tracking the phone calls into the dealership, you are not going to see how well performance max works. Yeah, it's not just a lead like. It works wonderfully well on mobile devices. People on mobile tend to hit click to call. You know when they click to call they might not hit click to call in the mass head of the website. They may hit it on the SRP of the VDP view and because of that it may not fire as a conversion in Google analytics and if that happens and you're not tracking it, you won't even know that it worked. So track it, track it, track it.
Shaun:Yeah, yeah. So definitely sounds like a top recommendation for dealers. Or just definitely start, but start small, nothing wrong with that. Make sure you're measuring. Focus on sounds like incoming phone calls is really important with that ad type. So I think those are really great first steps. Last question, I guess and then we can you know kind of wrap this thing up would be could you summarize even just one like a favorite key takeaway that you think that you know people tuning in, listening or watching or both should remember on you know vehicle listening ads.
Shean:I'm going to give you two, because the first one, in case you didn't hear the hint the first time is if you're not running it, run it Right, spend $500 because it's going to pencil. It is quite literally the easiest thing to pencil. So that's the first one. And then the second one is you've got to be tracking what's happening. So, every dealer out there, your number one takeaway from everything we say probably every episode is going to be make sure that you connect your AdWords account to your analytics account 100%. You should see every ad group and every spend to the penny in that account, because when you see it, you know that you can look in there and start asking questions. And you've got to ask questions. Like the vendor doesn't know. If you don't ask questions, like it's plain and simple, we only see what we see from Google analytics and from the AdWords account. So you've got to tell us what's happening in the store and that merging right, that collaboration, is really what helps things perform best.
Shaun:Yeah, I love it. Great stuff, kiran and audience once again. Well, we've mixed up a batch of knowledge to help you dealers navigate the often arcane world of automotive digital marketing. So this podcast loves feedback, by the way, from fellow Alchemist data enthusiasts, so please comment or ask questions. If you want to learn more about what was covered today, head over to dealeralchemistcom and get connected. The team will be more than happy to get back to you soon, and we'll be back soon, before you know it, actually, with another episode of automotive Alchemist.