Google Testing Lead Generation System for New Car Sales

For the past month and half Google has been testing a new local car lead generation product in the San Francisco market.  The product, officially called Google Comparison Ads for Autos, allows a consumer to anonymously request quotes on specific in stock inventory from dealers within a certain distance of their search.  According to Brian Pasch of PGC Marketing the Google Cars results are “focused on lower sales funnel queries meaning the buyer has already decided on a brand and a model to purchase.   So it will not be showing up for all automotive search queries, just a subset that Google believes have already made a brand/model selection”.  For example the results will show for Toyota Prius or Toyota dealer but not for the search phrase Toyota.

Google has noted the following benefits on their sign up page:

  • 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, and only pay for leads you receive.
  • 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 can target consumers based on distance and specific type of car, so you get the leads that are most valuable to you.

To interact with Google’s test, set your browser to San Francisco or Palo Alto and search on a phrase that is model specific like “Toyota Prius” and you will be presented with this sponsored result just below the sponsored ads:

From that screen the searcher is taken to a search result screen of in stock inventory within a certain distance of your location and a faceted interface that allow for additional narrowing of choices trim, engine type, color and options. When you click on the “Google price info” button you are presented with pricing detail that shows MSRP, Invoice AND (again as reported by Brian Pasch) the average regional price paid as calculated from data shared by dealers to the DMV in their state. This pricing transparency is not a number that most dealers will feel comfortable about being shared.

 

Once a user has identified a specific model and chooses to contact a dearer, they are offered the ability to anonymously contact the dealer via email, a callback or to directly call the dealer. The dealer only gets the prospect contact detail if the searcher agrees to provide it to the dealer. Google acts in an intermediary capacity and provides the dealer with an anonymized email or phone number by which to contact the prospect.

As Ryan Leslie of DealerRater.com pointed out to me, this customer focused approach might not appeal to all dealers: “This is SCARY to most dealers and will force them to change their lead response strategy in order to be effective. The cream of the crop will really rise to the top and this kind of lead is a death sentence to the old “just get them in here so we can sell them” model of sales in the business. As with all things Google product, it’s the ability to control the real estate that is most appealing”. From where I sit as a consumer the increased transparency around pricing would be a welcome change for the auto industry.

New car sales in the US are approximately 10 million cars at an average price of almost $30,000. This $290 billion dollar local market, although roughly equal in dollar value to used car sales, offers a very high value per transaction. Traditionally leads in this market cost between $15 and $40 and thus it is obviously attractive to Google. Like their recent acquisition of Frommer’s, the points the way for Google to take a more vertical strategy to their local sales growth, one that is very targeted and provides specific value to specific industries.

Brian Pasch of PGC Digital marketing has a nice overview video of the program from a dealers perspective:

Please consider leaving a comment as your input will help me (& everyone else) better understand and learn about local.
Google Testing Lead Generation System for New Car Sales by

31 thoughts on “Google Testing Lead Generation System for New Car Sales”

  1. The equation is pretty much like this…. if the lead generation sites, customer satisfaction or transparency for a given industry sucks, and if the products are consistent and can be easily compared across sites, Google’s going to intercept them, aggregate them, present them in a simple UX and then sell the sh** out of them.

  2. Hi Mike,
    The advent of this creates one of those mountain top scenarios where one looks about at the views from all sides.

    One can see fear of change on the part of the business owner, and also, hope for better transparency on the part of the consumer.

    And what about Google? Are they simply to be admired for their unerring smarts in exploiting a new opportunity in a multi-billion-dollar market or are they the heavy, stepping into yet another business arena and declaring themselves the middle man?

    If Google had 1/4 the power, reach and visibility they currently do, it would be easier to see this as a fine marketing opportunity for interested businesses. But because of their sway, it’s hard not to see that whatever Google does, every business ends up having to ‘live or die’ by their policies. Business owners who can’t or won’t fall in step with a new advertising scenario like this could find themselves going out of business. That’s power. Google starts to feel more like an emperor than a search engine when you look at it that way.

    I know it’s just a test right now, but the implications are large whether positive or negative.

    Thanks for posting about this.

  3. From another perspective, Google makes a lot of money for car-related keywords. If the lead generation experiment produces less revenue than the SEM ads, they might drop this model.
    If, however, they produce a lot more and scale this nationwide, well…

  4. Mike: I agree with Miriam. As with any of Google’s foray’s into other businesses one must evaluate its position on eyeballs with intent to buy.

    The position is that of a never seen before monopoly with incredible power.

    Just as google has shaken other industries as it pushes its access to eyeballs, its control of the search page, it is now entering the auto business universe.

    I think your numbers estimate is a bit off. The bottom dropped out of the domestic auto and small truck business at the peak of the recession driving total sales down to under 10 million units. Its been climbing ever since and I believe current run rate is in the 12/13/14 million unit range. Before the recession new car sales pretty much averaged 16-17 million units/year for a decade.

    At 14 million new car sales at $30,000/pop its a $420 billion item.

    I don’t know the size of the used car market but it too is huge. In fact the new car sales element is the largest component of retail sales in the nation.

    So you have a business that has an enormous monopoly on eyeballs with intent to purchase moving into the largest component of retail sales in the nation.

    I would suggest that is going to shake a lot of feathers.

  5. @Scott

    I think you have nailed the model.

    @Brian

    Great point. That could also explain why they are bringing in these sponsored results “lower in the purchase funnel”.

    @Miriam
    I do not see Google’s march toward monopoly as any different than any other company’s march toward monopoly in this country… whether it is Archer Daniels Midland or GE. Is is the nature of the system in which we live that these large capitalist firms become either monopoly or oligopolies. Given that tendency, a product that brings more pricing transparency to consumers would be welcome…

    @Earl
    You are right about the total car sales, I inadvertantly was looking at last year’s numbers….it does appear to be about a 14 million run rate.

  6. I go back to Miriam’s comments. I agree. Google has shown an ability to be the total game changer again and again within the web in a way that only a monopoly can. Its vastly different than Archer Midland Daniels or GE.

    Google enters an industry….changes serps…and bingo…its products show and the competition’s products don’t show. That is a level of monopoly unavailable to any other entity. Its very scary…very powerful. It definitely bears watching.

  7. I worked for an auto marketing company (the largest in the nation) and it blew my mind the kind of data they were working on… The ability to track what cars you looked at, days, weeks time to conversion, dealers visited etc. The data was intense.

  8. In essence, Google will become the auctioneer, the commodity broker to an entire secular industry. I smell FTA right around the corner.

  9. @Earl

    ADM was involved in a world wide price fixing scheme (by virtue of their near monopoly power) that increased the prices of basic food stuffs world wide to almost every consumer of modern food stuffs…. that to me is the affect of a bad monopoly. While Google has a very powerful position it doesn’t hold a dime compared to that. Or look at Cargill, they single handedly forced peasant farmers out of farming by exporting cheap, federally subsidized corn to Mexico…. both have HUGE human impacts on a very large scale.

    The reality is that our system of capitalism encourages and embraces these large monopolistic and oligopolistic practices. If you want to end them then don’t focus on just Google, focus on the system that creates these multinational behemoths in every industry.

    Google, unlike most of the other monopolists with whom they share the name, at least tries to bring value to the consumer and business.

  10. @Jim: Mike and I get in these debates. Yeah…it is a very political statement. I agree with you on that.

    @Mike: I don’t see the impact of those other businesses first hand. I see Google’s impact very directly. I see its make or break impact on smb’s on a very direct basis, and have felt the impact with our smb’s.

    I went back and tested different search terms for different auto makes in the California test market. Set my location for the region and reset my zipcode in order to see the ads.

    PPC dominates the google web page any way you want to look at it. The google affiliate ads with the pictures of cars visually dominate the top of the web page more so than the ads.

    The difference is slight with regard to google’s affiliate ads from others. There is a very slight link in the upper right hand corner telling users/searchers that google could be directly compensated. That slight addition is ever so slightly different than all the other affiliate advertising we see out there for so many other industries, such as hotels.

    The visualness is overwhelming. Of course, google does identify this as “google cars” significantly different than some of these erstwhile affiliates who identify themselves as the hotels themselves.

    Boy as I checked this out on a couple of different auto brands for that area, I was stunned at the dominance of ppc with direct info over any form of organic or local presence that oriented toward the top of the google search page. Startling in the overwhelming dominance of ppc and now this visually grabbing affiliate deal directly from google over any other kind of site.

    When it comes to google more aggressively running its own sources of income on its own dominant/unbelievably monopolistic search engine that responds to buyer intent…google is ever more aggressively creating more opportunities for google to reach into EVERYONE’s POCKETS in every way.

    When search terms come up for some of our businesses these days more and more we see ads from google DEALs, its groupon like product again with pictures sitting prominently in a spot of high visibility. Those ads are always somewhat in competition with our own relatively high rankings and relatively highly placed ppc. When I got help from a ppc adwords extremely pleasant and responsive ppc customer service person recently….she didn’t say squat this time about quality of ads. She responded to questions with …..higher bids leads to higher ad placement.

    So much for quality w/ ppc ads.

    Google has an ability to get into everyone’s pockets in every way. I find it scary. Its an incredible example of a spreading monopoly over everyone everywhere.

    Now back to some of the politics that mike likes to espouse…..

    what system creates monopolies, Mike??

  11. @Earl
    It is not a matter of like or not… I strive for an understanding of our reality. I find your explanation of Google’s evil to not be very fulfilling so I go elsewhere for my economic understanding. Nor does it explain the broad regularity with which we see monopolies and oligopolies. Free market theory would predict an infinity of competing entities. That doesn’t seem to happen. It looks to me that in any given industry that over time we see fewer and fewer major players…

    I think that monopolies (and their close sibling oligopolies) are not well explained in neo classic economics so I turn elsewhere for elucidation…

    I rarely see that government intervention in these matters is in favor of the consumer or the SMB, generally it seems to just reflect the interests of other very big companies.

  12. Back when local was really young we launched a similar tool with amazing success across the local landscape nationwide. Ended up shutting it down completely though after the auto dealers became irate that we were advertising to “their” local customers with better prices from neighboring dealers. Use of their brand names, logos, and vehicle info is very selective and they pay a lot of money for the right to sell whatever brand they do. Even though we were generating very high quality leads, for many of the same dealers that were complaining, they were willing to say fu to us and go it alone. In the 6 months our tool was live we received no less than 4 cease and desist orders and multiple other legal action threats. I do not see very many dealers jumping at this.

  13. Mike & Earl – Not one of the three of us starry eyed enough to see Google as anything but a corporation with corporate goals. I don’t expect this to change, and I doubt you do, either. It’s both interesting and concerning to watch what a monopoly can do. It’s educational. For the SMB, though, it must be somewhat maddening.

  14. @mark: I wonder how the auto dealers are going to react to google doing this versus a much smaller group.

    @Miriam: Google has an unmatched ability to dig into everyone’s pockets at its own free will and there have yet to be any real blocks on that, subject to China/ and the EU challenging google.

    Certainly no businesses have been capable of confronting their encroachment into ever newer sources of business while controlling the search engine landscape.

    If this was analogous to the game of pick-up basketball, google would own the ball, be the ref, put a lid over the other team’s basket preventing any shots from going in …and would get the first 5 picks of players in a 5 on 5 game.

  15. @earlpearl….

    Two questions

    1)Why do you continue to use their services?

    2)Who would you imagine would be less domineering if they were in the market position of Google?

  16. @Mike: (this is fun) :D

    1. I use them b/c they are a monopoly. It would be interesting to poll the readers here as it regards search traffic to their smb’s and their smb clients. In my cases G search traffic is typically around 85-90%: usually closer to 90% of all search traffic. So for the smb’s I’m very tied to google. The searchers use it so the businesses use it.

    1 A. For these same smb’s search dominates for the various types of smbs as to results. Our contacts and sales invariably are dominated by search results over all other sources…even as we spend inordinate amts of money to expand outside of search.

    Its a monopoly.

    2. I don’t know. Frankly at this point I have no choices. As referenced above they are a monopoly.

  17. Mike: We have some smb’s wherein they still primarily market from targeted direct marketing, strong WOM, strong referrals. One reason we do that is to get off the dependence on Google. Of their web oriented business…oi…its all google. But then frankly for those smb’s b/c we put so much into the above mentioned areas we can’t spend the time on trying to diversify on the web in non google ways.

    then I looked at others that are very web oriented. oi. google dominates..even as we spend and have spent considerable time and effort on other approaches.

    Just looked at one: Of search traffic big G came in at 87% of search…and frankly that one has strong Bing rankings and a Bing and Y ppc campaign. Still Bing and Y come in together at all of 10% of search traffic.

    THAT IS A MONOPOLY.

    Of total web traffic…G search is over 70% of everything. oi again. Too much IMHO. We are on a campaign to diversify on the web. We’ll see how it goes.

    Was looking at some of the referral traffic. Over the years with a lot of experience we know the kind of referral traffic that has delivered leads that convert.

    oi again. some of the sources that used to deliver have been seriously diminished. One formerly excellent one was crushed by panda. Most of the referral traffic that delivers is b/c of high rankings in google…so again its google related. Yelp is reasonably effective…but I know yelp delivers significantly b/c of high rankings and great systemic seo. some sites that used to deliver better just don’t do the trick anymore. basically all the IYP type sites suck. We got some good placement on sites that deliver to a demographic that should work for the smb. Traffic sucks. the buying intent for our services on those sites isn’t there. Its a tough nut to get away from google.

    Oh and by the way was looking at that particular smb and its analytics and it gets a relatively lot of keyword traffic from Goog for a phrase that is tangential to the business but doesn’t get to the intent of the services. That keyword traffic is damn high relative to everything else. But w/ all that traffic it hasn’t delivered a single lead to a form. So its worthless. except for learning.

    Looked into it…and saw that the very first picture in google images for that kyword phrase is from our site. Ha. didn’t know that. Also at some point the pic migrated to that position.

    Now I’ve got to look into that and see if we can recreate that. Goog impages…and universal search…hey it can work.

    Its a danged monopoly. We are dependent upon it and subject to its actions. And that is scary.

    Oh and for that smb and for that industry (we have a couple of those) we have worked over FB and twitter, advertised on FB, worked FB….spent huge hours working twitter for one of them. Lousy results.

    We are still putting a lot of time and effort into social media on those smb’s. Its a challenge.

    When it comes to intent to buy and control over eyeballs Google is an amazing monopoly.

    ….and that is why I am forced to use it and do use it.

  18. @Mike –
    you say, “It is an observation about our current political economic reality. Do you think it inaccurate”?

    I guess my response would be, the reality of our capitalist system as compared to what? The recent past? When AT&T monopolized the telecommunication sector, when the $35B YP monopolized inbound marketing? Before traditional media fragmented? So I guess I’m not sure that your inference represents as political position.

  19. I think that intrinsic in capitalism is a tendency towards the extreme aggregation of capital in the hands of a few companies in any segment that benefits from scale. This is particularly true in the technology industry where scale and market imposed standards are the norm.

    Pre ~1972 it occurred nationally and the playing field in any given industry was limited by that geography. The auto industry went from hundreds of competitors to 3.

    Post 1972 it has been taking place on the international playing field. The international auto industry is currently in the process of consolidating into a few very large firms. Fiat buys Chrysler, GM buys Opel, BMW buys Cooper. My model of understanding would predict that this number will continue to contract.

    And become less price competitive. The advantage of these monopoly/oligopoly situations is that the players tacitly agree to NOT compete on price in order to maximize profits.

  20. @Earl

    Scary yes, monopoly probably. I just don’t see the situation as either abusive nor unique yet. Which would explain why you still use Google’s products.

    It might become abusive at some point at which point your fears might be realized but I am not convinced that Google has abused their power vis a vis the SMB or the consumer. If I were Yelp I might see the world differently. But as far as I am concerned that would reinforce my view that discussions of monopoly in our current climate are just conversations between large scale capitalists attempting to achieve some gain.

  21. Although I share the basic concerns of most of the other commenters, a dominant market position is not the same thing as a monopoly. Are they the only ones that control free search? Is there nowhere else to go to get free searches?

    Muad’dib had a monopoly on melange: Dune was the only place to get it. (One seller). You went to the Fremen to buy, or died young and non-prescient.
    The owner of the only well in town has a monopoly on hydration and irrigation, until it rains.

    As others have noted there’s blekko, Bing, dogpile, Baidu, several other search engines. They don’t meet the definition of monopoly (one seller), because no one is forced to use them.

    Google.com, once upon a time, was just a website with a free search tool. They were so useful that its popularity now means all are adjusting their web presences to be more prominent within that website’s free search tool. But that’s their option.

    I’m a fan of Eric Ward; in his blog he’s shared a lot of stories of companies that found ways to drive more web traffic than ever without ranking in the SERPs on Google in any significant way. Non-google-driven traffic still exists!
    Mixcloud is a very successful music site that obtains almost all of its traffic from Facebook.

  22. While I am bothered by google’s monopolistic control of search there are other avenues for various businesses…as mentioned by Brian above and elsewhere:

    This article is very interesting on several fronts: http://finance.yahoo.com/news/forget-apple-forget-facebook-heres-184209532.html

    Amazon can just sell, sell, sell. Actually its not just google that is concerned about amazon….its every single Brick and mortar out there. Amazon is pushing to enhance its delivery of products. Its a killer business.

    I also found it interesting that the article mentions that only 20% of google searches are the one’s that generate ppc revenues.

    I wonder where that data comes from?

  23. Not unsurprising, looks good but will kill some businesses in the process. Antitrust needs to get google hard.

  24. Amazon, Google, Apple and MS, all have me worried. It’s all good until they pull your ads or feeds, or whatever… then you aren’t even in the game for the most part.

    I like the transparency of competition in this way, but I don’t like that these big players have so much control on who can participate in the sales stream.

  25. I have worked for Autotrader, Edmunds and eBay Motors. The success of any program that caters to auto dealers is the strength of the sales network. Google has no significant sales network. They have some great people in their auto division that sell national and regional advertising, but that is a completely different animal. Setting up a national sales auto force is a huge, daunting task. This isn’t about the tech, it’s about “on the ground” selling, a skill set that is non existent at Google. It’s not about selling dealers, it’s about servicing and constantly “reselling” the value of the product. None of their “adwords” vendors are qualified for this either. Google will be looking at a very bloody nose if they don’t understand this basic concept that we in automotive take for granted.

    Bruno

  26. I have read all of the comments on this article. More than anything else, I am a salesman. I know price alone does not build a business. There’s always somebody out there willing to sell for less than you’re willing to sell your products for. The upside to social media is, it allows you to be on many different stages at the same time, telling your story to people who have different interests and value systems. Value comes in many different flavors. It’s up to you to find every source of value in your dealership, your staff, the services you provide and the products you sell. Afterwards, learn to tell your story better than anyone else and adopt a “be everywhere” social media philosophy to tell your great story. Today, the long term relationships you have with prospects has never been more important or, easier to do considering the current multiplicity of social media platforms. Google is important but, it’s not the one and only path to your success.

  27. I think Google will lose alot of Dealer Adwords Revenue by competing with dealers with a lead generator. Seems their going to make it all about price, like True Car was doing.

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