Friday, July 19, 2013 | Edited by Daniel Moores
||Unexpected Consequences: With Co-Op Funds, Dealers See More Searches and Higher Costs
In the year since Chrysler Group started reimbursing dealers for buying pay-per-click advertising on Google, prices for popular phrases such as "Jeep Grand Cherokee" and "Dodge Dart" have jumped in the Cleveland market, dealers say.
In the Boston area, a yearlong surge in paid search spending by Volkswagen dealers has inflated the cost of banner ads and links to dealer Web sites.
Co-op programs have long been used for traditional advertising. Now the carmakers, acknowledging that 90-plus percent of shoppers do vehicle research online, are prodding dealers to shift investment to digital.
Kevin Mayer, vice president of marketing for VW of America, said VW's 619 U.S. dealers have seen a big spike in Web site traffic from more paid search, especially to view the all-important vehicle listings. But consultant Brian Pasch of PCG Digital Marketing says carmakers' push into digital with co-op dollars has had unintended side effects, such as:
Mike Warwick, director of digital marketing at the eight-store Kelly Automotive Group in suburban Boston, said popular VW key words on Google -- the 900-pound gorilla of online search -- that he could have bought for $1 to $1.50 per click three years ago now cost about triple that.
More rival dealers bidding for key words, driving up paid search prices.
Cookie-cutter digital campaigns resulting from few vendors managing paid searches.
Unprecedented competition for tech-savvy dealers who began using digital marketing years ago.
He said it is understandable that VW would provide incentives for dealers to advertise online. But the spending is mainly going to a small number of vendors -- which can result in multiple rivals bidding for the same key words, he said.
"If all the dealers are working off the same platform, bidding is forced up," Warwick said.
Chrysler dealers in the Cleveland area are seeing the same phenomenon.
Dusty Blechman, business development manager for the two-store Adventure Auto Group in Willoughby, Ohio, said his Google cost per click is up substantially since Chrysler launched its paid search co-op program in July 2012.
He now pays an average of $5.28 when a shopper clicks on one of the ads he obtains atop Google search pages by successfully bidding for vehicle phrases or key words. The ads typically appear as links in the shaded top portion of a Google search or on the right side of the page.
Blechman said all five of his Chrysler rivals within 10 miles of his Chrysler store are participating in paid search today, intensifying competition for ads that he could have bought for less money before Chrysler coaxed more dealers into the fray.
Alison Spitzer, vice president of the 15-store Spitzer Automotive Group in the Cleveland area, also reports big price increases for Chrysler-related key words in the past year. The company owns one Chrysler store in the Cleveland area, one in Mansfield, Ohio, and another in Florida.
For the e-commerce director at a Chrysler store in New England, who asked not to be named, that means "costs are getting prohibitively high."
The dealership, one of nine Chrysler stores in its market, is getting half as many views from shoppers on Google as it did a year ago for the same budget, the director said. The store sells about 100 new vehicles and 100 used vehicles per month.
Fallout from factory dollars
A recent white paper by PCG Digital Marketing identified unintended consequences from the carmakers increasing dealer subsidies for Google advertising.
Rising prices for paid search in many cities
Cookie-cutter campaigns result from reliance on few vendors to manage searches
Tech-savvy dealers lose search advantage to rivals aided by manufacturers
The factory push into paid search has been particularly hard on tech-savvy dealers, consultant Pasch said.
They are the so-called progressives who learned to use digital marketing years ago and had little competition from other dealers for online shoppers.
Pasch said early adopters feel frustration when automakers draw more competitors into digital media with co-op dollars.
"In the past progressive dealers had less competition from other dealers for these popular key words," Pasch wrote in a white paper, "The Three Unintended Consequences of OEM Funding for Google Adwords," published in May.
But top Chrysler and VW executives say their programs have been good for business.
Today, 80 percent of Chrysler's nearly 2,400 dealers use paid search to attract customers vs. 25 percent when the co-op program started, said Jeff Strickland, Chrysler's director of U.S. dealer relations and retail strategies.
Chrysler and its dealers nationwide dominate the top of a Google search page when a shopper searches for a Chrysler Group vehicle, Strickland said.
Overall, the price to Chrysler dealers for Chrysler-related key words, which typically include brand, model and possibly model year and other descriptions, is up an average 22 percent from a year ago, Strickland said, citing data he received from Google last month.
More Web traffic
Mayer said VW is happy with its results as well. Shopper traffic to the vehicle inventory pages of VW dealer sites has doubled in the past year, getting consumers deep into the shopping process.
"Dollar for dollar, [search engine marketing] gets some of the best consumer responses," Mayer said.
Mayer declined to detail how much VW's paid search spending has increased. He said VW key word costs on average are slightly below an industrywide increase over the past year of about 23 percent.
Pasch said he has seen increases considerably higher than that.
For instance, the price in one East Coast city for the search phrase "Volkswagen for sale" rose 51 percent to $3.21 in March vs. $2.13 in March 2012, Pasch said.
That's counter to the trend at Google. Average cost per click on all Google sites fell 4 percent in the first quarter of 2013 vs. the year-earlier period and the same 4 percent compared with the fourth quarter of 2012, according to the company's first-quarter public earnings statement.
The competition for popular phrases was bound to happen as co-op funds stimulate digital advertising, Pasch said. And factory limits on which vendors can be used to manage those accounts result in dealers using the same key word buying strategies in many markets, he said.
Chrysler is trying to provide as much choice of vendors to manage dealer-paid search as possible, Strickland said. That's why the carmaker in the first quarter added four vendor choices to the original three eligible for dealership co-op funds, he said.
Chrysler also may add to the certified roster of search engine vendors by August, he said.
Spitzer, the Cleveland dealership executive, said dealers should closely monitor their paid search advertising whether it is managed by vendors or in-house.
Dealers who let vendors spend their budget without close monitoring are more likely to get a cookie-cutter campaign that mirrors rivals using the same vendors, she said.
There's also a greater risk that competitors will violate an informal ban on buying key words that contain rival dealership names, Spitzer said.
In the past few months, she said she has called dealer principals at two competitors whose vendors bought key words containing the Spitzer name without the dealer principals' knowledge. She said that after a short conversation, the practice was discontinued.
Buying the name of a rival dealer in paid search is a recipe for a bidding war when the rival reciprocates.
A war like that only drives up advertising prices, said Spitzer, whose group spends more than half its ad budget on digital media, including paid search and ads on third-party shopping sites, such as AutoTrader.com.
Said Spitzer: "You have to nip that situation in the bud."
(Source: Automotive News, 07/09/13)
||Ad Verification Gains Urgency Among Marketers
Programmatic Buying Increases the Need for Ad Verification
Publishers, agencies and marketers use ad verification services to validate the delivery of display ads and ensure brand safety. Verification measures also provide insight into viewability and fraudulent activity, according to a new eMarketer report, "Ad Verification: Validating Brand Safety and Ensuring Quality Impressions."
The past few years have seen new, indirect purchase channels boasting even greater reach and scale and automated buying capabilities. These programmatic inventory sources give buyers access to additional publishers, networks and inventory, but buyers and sellers are separated by layers of technology.
"As the distance between the buyer and seller of impressions increases, there are more opportunities for trafficking errors, or targeting errors or other misunderstandings that commonly occur and cause an ad to be delivered somewhere the advertiser does not want to appear," said Matt McLaughlin, COO of ad verification provider DoubleVerify.
Findings from Integral Ad Science (then known as AdSafe Media) showed the frequency with which display ads were shown on moderate- to high-risk sites worldwide in the first two quarters of 2012. The study found that ad networks continued to serve the greatest number of very high-risk impressions in Q2 2012, with platforms and exchanges serving only slightly lower numbers.
But media buyers monitoring brand safety have options for identifying and minimizing instances of high-risk impressions. By using an ad-blocking tag, a verification company can receive data on site placement and page context as the page loads. If either is deemed unsafe, the ad tag will tell the ad server to deny the serving of that brand's ad and then redirect the browser back to the publisher's ad server to choose another ad.
Sites rife with user-generated content, such as social networks, also pose a challenge. Findings from the Online Publishers Association (OPA) and research firm Advertiser Perceptions show social networks have a ways to go in giving advertisers total brand comfort. An August 2012 study found that 71% of US ad agencies and marketers felt their brand-focused ads were safe on premium publisher sites, while just 36% said the same for Facebook.
Another area of quality assurance that media buyers use ad verification for is viewability.
Data from comScore showed less than half of US display ad impressions delivered between May 2012 and February 2013 were in-view, defined as at least 50% of the ad visible for one second or more.
To track viewability, most use ad verification tags that have the capability to look outside of the iframe to assess where the ad is on the page and therefore determine viewability. Though this provides a point of reference, it is not a complete measure.
Another trend surrounding viewability is the incorporation of these ad verification measures into attribution models to determine not just the quality of ad spend but the overall effectiveness.
"You might have targeted a person with a below-the-fold ad they never saw, but they were tagged, so that publisher got credit," said Michael Kaushansky, Havas Media's executive vice president and chief analytics officer. "Clearly, that person would have converted anyway."
(Source: eMarketer, 07/09/13)
||Nielsen Studies 'Multi-Sensory' Differences Between Young and Old
It's fairly commonplace at media conferences to hear a gray-haired executive extol his/her brand because it really grabs young viewers, and that means it's perfect for advertisers.
I always wonder why those older executives don't throw in a mitigating word for their tattoo-less demographic. I guess I'm too defensive that way.
Now comes a new Nielsen study that suggests that many of the modern ("multi-sensory") media contrivances are ones older consumers can't easily handle, and this of course, has ramifications for online advertisers and programmers.
Reaching younger consumers, it's kind of easy to leave older consumers behind. But that is ignoring what still is the biggest, richest slice of the demographic pie.
A new Nielsen study, "The Me Generation Meets Generation Me" trots out some of the same broad marketing facts that you probably know already about relative wealth. Boomers control 70% of the disposable income, but that Millennials are driving the technology, and by extension -- my interpretation -- all media.
Three out of four Millennials own smartphones, about the same percentage as own laptops, and 68% own gaming consoles. Nielsen points out in this device-acquisition contest, the Me Generation Boomers are catching up -- hey, they have the money -- and their adoption of tablets has doubled from 2011 to 2012. (And this year, they'll learn how to use them by golly!)
But it's the part of the report that speaks broadly about what young and older people can handle -- media-wise -- that makes me wonder if Boomers are being left in the wilderness, encouraged to stay current but then faced with media presentation that makes "keeping up" more than just a matter of determination, but a physiological challenge.
The Nielsen study says, for example, "Younger brains have high multi-sensory processing capacity -- which makes them very amenable to (and almost seek) multi-sensory communications, especially with interaction -- such as search tasks, interactive sites."
And in another section, "Millennials can equally deal with the bleeding-over communication we see in most dynamic banner ads on Web portals, while older generations need a clear-framed separated communication to be able to engage."
The reason older consumers don't get it, is that, well, they're changing, and the media they're being asked to ingest doesn't compute very easily.
"Nielsen NeuroFocus research shows that neurological changes that come with age result in certain types of communication being more effective," the report says. Body chemistry produces less dopamine and serotonin in older people -- starting in the mid-40s -- which makes advertisers need to change their pitch. Those changes as also seem to make it more important for older consumers to keep current.
The aging brain, Nielsen points out, gradually "loses the ability to suppress distraction." In the very next sentence it says, "However, the aging brain has a broader attention span and is open to more information."
All of that makes sense but it's complicated, and nuanced. In two other places, Nielsen makes some interesting observations. The Nielsen report says its research finds that Boomers "prefer clever, light-hearted humor (rather than mean-spirited) and relatable characters," while "Millennials prefer off-beat, sarcastic and slapstick humor. Like Boomers, they respond to characters that are relatable to them."
And in terms of color, "Millennials respond better to an intense color palette," while with Boomers, in what might be unintended irony, "Contrast is the preference vs colors in online ads." That contrast thing seems to be true.
(Source: P.J. Bednarski, in MediaPost's VidBlog, 06/24/13)
Daily Sales Tip: 10 Hedge Words That Are Sales Killers
I've found that the nicest people use the most hedge words. Hedge words soften what nice people say. Maybe it is because of trying to not sound too aggressive or forceful, but these words will steal confidence from statements to clients:
Simply remove these words from your statements and increase advertisers' confidence in your recommendations.
For example, not: "Maybe our integrated solution best achieves your marketing objectives." Instead say: "Our integrated solution best achieves your marketing objectives."
Don't say: "I hope this recommendation addresses your advertising plan." Instead say: "This recommendation addresses your advertising plan."
Avoid: "I think this commercial will get our listeners' attention." Instead say: "This commercial will get our listeners' attention."
Re-phrase: "Based on our conversations, I believe this is the perfect package for you." Instead say: "Based on our conversations, this is the perfect package for you."
I hope you will close more business by using this tip.
Source: John Potter, SVP/Professional Development, RAB