Social Media and OEMs: the Flaw in the Machine

Posted on September 14, 2012 by Arnold Tijerina

I remember a few years back when OEMs started pressuring their dealers to develop a social media presence. “You have to have a Facebook page.”, and “You need a Twitter account.” They sent their contracted digital marketing consultants to their dealers and beat them senseless until they complied. They started grading their dealers’ online presence and critiquing it’s absence.

On the flip side, manufacturers were developing and building healthy and thriving online presences. I get that. Their job is branding and promoting. That’s awesome. Some manufacturers were better at it than others. Some took their time joining the game. Some were ahead.

As most of you reading this know, one of the goals of social media is exposure outside your networks. That’s difficult to achieve for most dealers, especially dealers not paying attention and putting forth just enough effort to say they are “doing it”. Some are effective and others aren’t.

The thing that puzzles me is that, for the most part, many manufacturers have large audiences – some in the millions. Their public face is all about reassuring customers and branding. You hear phrases and messages that say things akin to we value you as a customer. Wait a minute now. Who, exactly, is a manufacturer’s customer? I don’t know any manufacturer’s that sell cars direct to consumers. The only people that buy cars from manufacturers are car dealers. In my opinion, that makes car dealers the manufacturer’s customer but that’s beside the point.

Many manufacturers spend a lot of time watching, learning and responding to consumers on various social media channels – which is awesome. That being said, if you are social media savvy at all, you understand the value of a retweet or mention from a “person” with a large following – whether that be on Facebook, Twitter or wherever. While I’m sure it’s probably happened at some point in time, I have yet to see any car manufacturer put any concerted organized effort into identifying tweets from their TRUE customers – the car dealers – and using their considerable online presence to retweet and mention those dealers. You’d think they’d want to support a dealer’s social media effort.

If a dealer is putting out great content and saying positive things, why wouldn’t a manufacturer want to spend meganbarto@gmail.com or skeetle@me.com and effort into assisting the dealer gain exposure and increase their networks to the relevant people within their audience? I mean, THEY are the ones that pushed dealers into the social media world.

If your customer – the dealer – is doing a great job, reward them by interacting with THEM as well as with the end buyer. It would be a great way to support your franchises, reward them for their efforts, which, for the most part, are also going to be promoting the brand itself, which is completely in line with your goals anyways. YOU want engagement. YOU want to be retweeted. Why is it unreasonable for to assume that your dealers do as well?

I challenge a manufacturer to devote as much effort into integrating social media support for their franchises into their operations as they do supporting themselves. There are less franchises than consumers so it wouldn’t take a lot to accomplish. A retweet here and there would be easy, appreciated, rewarding, and relevant.

Oh, and don’t try the whole “we don’t want to play favorites” excuse – even if you truly believe it might be interpreted that way by your franchises. If your dealers have an online social media presence, support it. Maybe that would encourage your dealers who do not to jump on the bandwagon.

Practice what you preach and support the hand that feeds you.

The Game-Changing Google Program Auto Dealers Can’t Afford to Ignore

Posted on August 13, 2012 by Arnold Tijerina

Google’s online ventures are usually anything but under the radar. Yet recently, in what may be a game-changing play, the search engine giant quietly entered the third-party lead provider business for car dealerships.

The beta version of Google Comparison Ads for Autos (which is unofficially being referred to as “Google Cars” within the industry) was launched to very little fanfare a few weeks ago in the San Francisco Bay area. The service invites participating dealers to send their inventory to Google, allowing consumers direct access to inventory, price comparison, and the ability to request quotes from within Google search results. As shown below, the program—and associated inventory—is prominently displayed on page one of a relevant search.

While the program is currently limited to dealers within the San Francisco Bay area, program-specific search results are available throughout the state of California, not just for people located within the Bay area—contrary to what others are reporting. As evidenced by the above screen-grab, I did not have to change my location to get Comparison Ad results, and I live almost 500 miles away, in Southern California.

Google is currently testing a number of similar Comparison Ads programs for other products, including credit cards, CDs, and checking and savings accounts. Results have been controversial, with many advertisers in these industries reporting dissatisfaction, especially since Google is not obligated to play by its own rules and is, in effect, competing with its own advertisers. In November 2011, Google temporarily suspended its Comparison Ads service to the mortgage industry with plans to reboot the program after revamping it.

While specifics of the program for auto dealers have yet to be announced, Google is promoting the new service with the following program highlights:

“Higher-quality leads: Our leads come directly from motivated, purchase-ready consumers who have specifically chosen to contact your dealership. Leads are unique, never resold, and delivered immediately to you.

Free inventory listings: You can have your inventory shown to consumers on Google for free, even if you decide not to receive leads.

More than just inventory: Consumers can choose to connect with you even when you don’t have a specific car in inventory. We know that you can order the car, dealer trade, or find other solutions to help consumers get the cars they want.

Greater control over leads: You choose how much you’re willing to pay for a lead and target consumers based on distance and specific type of car, so you get the leads that are most valuable to you.”

This is all the information that Google currently has publicly available about the program. However, the operational processes used in the suspended Comparison Ads program for mortgages may offer additional insights. Here’s a run-down of how the program functioned:

1. Google looked at maximum bids placed by each competing bidder and then set a reserve price based on those bids. Once set, the reserve price was the minimum fee bidders would have to pay to appear on a desired search results page.

2. Anyone bidding below the reserve price was dropped from the auction. Google also dropped the bottom 10% of bidders who bid at or above the reserve price.

3. Results were then displayed (in this industry’s case) from lowest to highest APR. This leads me to believe automotive results would be displayed with the lowest prices first.

Furthermore, this is how, in an unlisted video, Google described the highlights of the program to the mortgage industry:

• The ads were included in the “Sponsored Listing” section but are not counted in the AdWords auction.

• Pricing was pulled directly from the companies’ “pricing engine product feed,” which would presumably be the equivalent of a dealer’s DMS or pricing tool, and updated multiple times per day.

• Bids could be highly targeted to reach the consumers most likely to convert, and an advertiser could place different bids for each targeted criteria.

Google mentions that they are working on a different ranking system for the mortgage program (one of the reasons provided for its suspension) in which Google will reward high-quality advertisers using factors such as:

• Accuracy of offers as determined by mystery shopping

• Turnaround time on lead follow-up

• Customer satisfaction as measured by surveys

It is probably safe to assume that Google will eventually apply these ranking criteria across all industries serviced by their Google Comparison Ad program.

Google is promoting the Comparison Ads for Autos program as a way for dealers to source fresh leads from consumers’ Google searches, but given the above information I have several concerns regarding how beneficial the program will really prove to be.

First and foremost, Google claims that the leads generated by the program are “unique,” yet in the final step of a lead submission, the program offers the consumer the choice to contact other dealers who may have similar cars available. A single person inputting a lead and requesting contact by multiple dealers would hypothetically generate multiple leads, a complication Google does not currently address.

On a related note, Google is telling consumers that even if they are interested in a particular vehicle that has already been identified by VIN, they may be able to get the same vehicle from another dealer. As Google puts it, “if you see a particular car (specified by a unique VIN) showing in a dealer’s inventory, you may be able to get that car from other dealers as well. Dealers often times trade inventory with each other, so you can buy from the dealer that you prefer.” Thus, Google is negating the edge a dealer may have in winning the consumer’s business simply by having the exact vehicle they are looking for in stock.

In addition, while Google says that dealers can list their inventory on the program free of charge, it is unclear what would happen to any leads generated if the dealer chose not to “pay to play.”

For those who are willing to pay, Google allows dealers to “[choose] what [they’re] willing to pay for a lead.” According to Automotive News, the price-per-lead is determined via a bidding model, with dealers competing for prominent positioning within search results for their inventory.

The final component of the program is that Google emphasizes the protection of consumer privacy. There are three ways in which a consumer can contact you as a participating advertiser:

1. Inbound Phone Lead: This comes via a Google-generated phone number; the consumer’s phone is blocked from the advertiser’s phone system.

2. E-mail Inquiry: The advertiser is given the consumer’s name and the details of the product they are interested in, but the consumer’s e-mail address is masked.

3. Request a Call-Back: The advertiser is given a masked phone number with which to call the consumer.

Google states that lead delivery is compatible with CRMs, but how those leads would actually populate is unclear.

The fact that Google commands such a large percentage of internet searches means that this program is a potential game-changer. Google’s ability to position this program wherever it likes, regardless of its other ad programs, may mean that dealers are forced to participate to remain competitive. Because Comparison Ads currently appear just above the first organic search results, these results will likely divert a portion of traffic that would otherwise have gone directly to dealers’ websites.

Not only will Google’s Comparison Ads for Autos impact many components of your online marketing efforts, including search engine optimization strategy and pay-per-click campaigns, but it may also even affect the lead quantity that your current third-party lead providers are able to offer you. Obviously, dealers would be well-advised to pay close attention to the program as it develops.

via the July 2012 edition of the 3 Birds Marketing newsletter

Google Cars Encourages Dealer Trades

Posted on June 27, 2012 by Arnold Tijerina

Yesterday, Brian Pasch posted a great article with the first examples of a new live Google product called Google Cars – Google’s entry into the 3rd party lead provider business for car dealers.

Other than all the obvious tactics that other third-party lead providers employ to maximize revenue from a consumer lead (as illustrated by Brian), I did some digging and found another component of their program that I thought was very interesting.

In Google’s support article explaining the program exists this piece of advice for consumers:

“If you see a particular car (specified by a unique VIN) showing in a dealer’s inventory, you may be able to get that car from other dealers as well. Dealers often times trade inventory with each other, so you can buy from the dealer that you prefer.”

What?!?!

The only way Google could have a dealer’s inventory is via the dealer feeding it to them. If you’re a dealer sending your inventory to Google, be advised that Google is telling consumers that if they find the exact car they’re looking for (down to the specific VIN) in YOUR inventory, that a consumer doesn’t have to buy it from you.

In my internet sales career, there were many times that myself and a competing dealer were working with the same customer online. One of the things I always had to look at was if the exact car the customer was looking for was available and who had it. There were plenty of occasions where the only convenient place that had the exact car the consumer wanted was my dealership. One of the strongest value propositions I had when quoting and/or trying to convince a customer to do business with me versus my competitor was that I had the car.

Since Google doesn’t release the consumer’s information to the dealer, it’s going to be much harder to identify the cases in which my competitor is working the same customer and trying to sell them a car that I have in stock with the intention of dealer trading with me for the vehicle.

One has to assume that only dealers providing inventory and/or participating in this program have the “Contact Dealer” button available as not every dealer does (as illustrated in the image below).

As you can see in the example above, it appears that dealer C and F are participating in this program while dealer D and E are not based on the existence (or absence) of the “Contact Dealer” button. So, as a consumer, I’m guessing that only inventory from dealer C and F would be available for a consumer to view. However, using Google’s own advice, I now know that since dealer D is closer to me, I could hypothetically buy dealer C’s car from dealer D.

I don’t necessarily want a provider that I am paying telling the consumers I am paying to attract that they can buy MY cars from my competitor.

My other thoughts on Google Cars:

Not only is this new program by Google hijacking dealer’s SEO efforts by making Google Cars the “most relevant” result in searches but the inventory itself is hosted on Google’s own site which could also eliminate the need for a consumer to visit your own website.

Google is also considering the vehicle results delivered via search as “Sponsored” versus organic results so now they are also competing with you for your PPC ad placement.

It’s going to be pretty difficult for dealer’s to NOT participate in Google Cars. Unlike other third party lead providers who rely on organic result positioning and PPC ads, a dealer can combat this if it has an aggressive SEO strategy. Google, on the other hand, is always going to deliver their program at the top of the search results, right above the first true organic search result.

Does anyone truly believe Google is going to bury their income-producing program in search results?

On top of this, Google’s recently formed automotive division has been invited to (and spoken at) many of our industry’s educational events in the last year or so giving advice and “assisting” dealers when all along they were preparing to bring to market a product that would compete with those very same dealers for not only their money but also in their search engine marketing strategies.

Google is the new Honey Badger. They don’t care. They’ll just take what they want.

Amazon Now Competing With Dealers

Posted on April 23, 2012 by Arnold Tijerina

Amazon.com announced the launch today of a new store AmazonSupply.com

The site, as reported by Mashable, is “aimed at buyers in the business, industrial, scientific and commercial spaces”, however, anyone can order from the site.

Being that I buy pretty much everything from Amazon (including my daughter’s loft bed and, most recently, a refrigerator), I was curious as to what this was all about.

To my surprise, they are offering a wide variety of auto parts, car care items and even wheels and tires. (See the Fleet & Vehicle Maintenance category).

As you can see, they have quite a large inventory of items. Unlike Amazon’s Marketplace, it’s unclear whether these items are being sold by Amazon directly or through third-party sellers.

How, or will, this effect your parts business?

Amazon has typically made sure they are the lowest price in any market. With free 2-day shipping on orders over $50 and no sales tax (in most cases), I’d say they have a distinct advantage from the get-go.

How long before they try their hand at selling cars or listing dealer inventory (at a cost, I’m sure). Amazon is increasingly trying to be a consumer’s one stop shop for everything. I’ve bought everything and anything imaginable on Amazon and have yet to find something NOT on Amazon.

Consumers may always need someone to install and service the vehicles but it just became a little easier and more attractive for them to not spend money in your parts department.

NADA 2012: Day Three Recap

Posted on February 6, 2012 by Arnold Tijerina

Sunday saw a lot of meetings, and running into (and trying to connect with) people. The exhibit hall was in full swing and jumping. The day was destined to be short because the Super Bowl started at 3:30pm here and all the parties were starting at 2:30pm.

We went to what, in my opinion, was the best Super Bowl party ever! eBay Motors set up the classiest, most intimate Super Bowl party I’ve ever been to. It was so classy celebrities were asking to come just so they could have a place to watch out of the general public. Not only that but all of them were super nice. They rented out the whole Seville Row ~~bar~~ ~~restaurant~~… hell, I don’t even know what it was. It was a private area that is part of the LAX nightclub. Max capacity was only 125 people. Every place to sit was a freaking couch VIP area. Lots of room. Great wait service with an open bar and lots of great food. We even had home-made cupcakes made, and hand-delivered, by Robyn and Taryn of The Food Network’s Cupcake Wars TV show.

I met Roy “Big Country” Nelson from the UFC as well as Greg Hendrick who is the Director of Event Operations for the UFC. I also met Coolio .. yeah.. that one. We were living in Gangsta’s paradise. Roy Nelson joined us at our table for a while as did the girls from Cupcake Wars. Lots of great conversation (and pictures). Oh, and Coolio gave me his cell phone number and the club manager gave me a UFC t-shirt and an autographed Roy Nelson action figure. Yeah, that’s how I roll. Talk about making connections, how is a partnership with the UFC for digital marketing and social media sound? Money, baby. That was only one of many connections that I, and people I know, made.

eBay Motors delivered a first-class Super Bowl experience. I couldn’t have improved it in any way. In my, and other people’s, opinions, they pulled off both the best party of NADA (Vanilla Ice) and the best SuperBowl party of NADA.

After that party, we headed to the DealerTrack party at the XS nightclub. We got there and, swear to God, the line looked like people were at Disneyland waiting to ride Space Mountain. Serious.

That party was OFF THE HOOK. HUGE place, great layout and tons of people. You could party inside or by the pool. Nice. Well played, DealerTrack.

After DealerTrack, it was off to a nice dinner then bed. Brilliant day at NADA.

It was so brilliant, this is what I felt like at the end of the day: