Acura Adwords Bidding Strategy Increases Online Competition For Franchise Dealers

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By Brian Pasch

Acura’s new policy on Google Adwords bidding strategies is an attempt to control click costs in SEM campaigns for their national marketing, regional marketing, and dealer marketing strategies.  Using cost as the justification for this new policy, Acura believes this move will reduce the Cost per Click (CPC) charges in SEM campaigns on Acura related keywords.

The strategy is likely to fail for a number of reasons, which I outline in this follow-up post on Acura Adwords strategy.  This decision comes at an odd time in the evolution of digital marketing.  If we extend Acura’s SEM policy to other forms of advertising, Acura could justify preventing local dealers from advertising:

  • on local and regional radio because it is driving up advertising costs for the market.
  • in newspapers that cover large metro areas like the New York Times because it drives up ad costs.
  • on television in major metro areas because it drives up costs.

Acura makes the argument that specific keywords represent “Tier 1” intent which is best served by OEM content and landing pages. They have come to this conclusion based on research from MediaVest, the ad agency associated with Honda and Acura brands.

Are dealers willing to ignore the fact that consumers use broad match keywords in Google for a “yellow pages” functionality to find local car dealers?  If local dealers are not allowed to appear in paid search, does that funnel their local leads through Acura’s lead program and generate additional costs to dealers?

Limited Protection of Positions 1-3

Acura Tier1 ads can only hold one position out of the top three spots in Google Adwords.  This leaves competitors and third party lead collection sites to advertise in key positions 2 and 3 without fear that Acura franchise dealers will buy those keywords.  Here is a search result for one of the keywords reserved for the OEM: Acura Auto

acura-auto

You will see that Lexus (green) is willing to purchase this “reserved keyword” as well as Edmunds (red).  Is this the best strategy for Acura?

Shouldn’t a local dealer be able to be in position 2?  Since Google knows the URLs of all franchises associated with Acura, a high quality LOCAL dealership landing page could easily beat out unrelated listings.

QUALITY SCORE IGNORANCE

The Google Quality Score of landing pages are important factors in keywords costs and most OEM’s have not invested in creating high quality landing pages.  Competitors and third party automotive portals have been students of SEO and SEM for years.  They know how to create high quality, consumer facing content that can yield a high quality score.

Let’s do a search for another reserved (banned) keyword: Acura Cars

acura-cars

For this keyword you will see two competitive brands easily sitting in positions 2 and 3.  However, take a look at the second ORGANIC position for this keyword; its occupied by Cars.com (green).

Google obviously considers this page from Cars.com to have high quality.  It would NOT cost Cars.com a high price to buy the word “Acura Cars” in their Adwords campaign and point clicks to this page.  It would have a very high quality score and filter traffic to their website.

CONTROLLING MARKETING INNOVATION

The ability to dissect keywords by intent and reserve those keywords for Tier 1, Tier2, and Tier3 SEM campaigns sounds like a nice idea in a socialist world, However, this is the United States where entrepreneurs are rewarded for developing local marketing campaigns that make their local franchise profitable.  The strong can also survive if they are able to innovate and dominate.

The attempt at limited SEM campaigns, while other forms of media are not restricted, seems like a “knee jerk” reaction to someone building a case that our free market system is driving costs too high and delivering a poor experience for consumers.

I’m calling bullshit on that claim.

I understand the need for OEMs to have a consistent offline and online marketing strategy that supports the brand. However, I would not place this SEM keyword strategy in the top 10 things Acura can do to increase market share and/or improve the online customer experience.

What is a better use of Acura’s marketing team? I would start by co-oping dealer education of digital marketing, phone skills training, and internet sales process.  In these three areas, more profits are lost, by a factor for 20:1, compared to the costs associated with a perceived increase in SEM click costs.

Who cares how many extra pennies SEM clicks cost if dealers don’t answer the phones properly or respond to leads in a timely and professional manner?

What do you have to say Acura dealers?  Honda dealers, get ready this may be coming your way as well.

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Brian

Brian Pasch, CEO

PCG Consulting

732.672.2356

Google

2 thoughts on “Acura Adwords Bidding Strategy Increases Online Competition For Franchise Dealers

  1. I would say that if they really wanted to be most effective with these dollars they would send the clicks to the dealers site. I know for a fact that our dealer sites have a much higher lead conversion rate. At the end of the day the same term may be a completely different funnel customer looking for a different experience. Good job Acura at shooting yourself directly in the foot.

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