Google shift has dealers friending Facebook

When Street Auto Group's Brad Paschal sees vehicles lingering in his inventories and drawing sparse online traffic, he turns to Facebook.

Paschal, e-commerce director for the Amarillo, Texas, group, sometimes uses a tool from digital marketer LotLinx known as a VIN View Optimizer to get a breakdown of viewership data for vehicle detail pages. Paschal then identifies the weaker performers and has LotLinx develop Facebook ads for each vehicle. The ads link consumers directly from their news feeds to the vehicle detail pages on Street Auto's websites.

The first time Paschal tried this method, Street Volkswagen sold 10 new and used vehicles in 10 days, having spent just $500 -- a nice haul for a small dealership with a limited ad budget. The Facebook ads are especially good at zeroing in on buyers with tastes that go against the grain.

"We're selling cars in a truck market," Paschal told Automotive News. "If you get eyes on the cars, the cars are going to sell as long as they're priced right and you have all of your merchandising correct. We spend way more on Facebook than we do on Google ads for sure."

Facebook, which has a trove of data on its users to back up a growing portfolio of marketing services, is not just a haven for quirky status updates and vacation photos. The massive social network is becoming an attractive vehicle for savvy auto dealers to reach low-funnel shoppers in a place where the average U.S. user spends around 40 minutes each day, especially in the wake of changes in how Google displays advertising.

Auto retailers and marketers have been closely monitoring the effects of changes Google made to its desktop search results in February to match its mobile format. 

The tech company removed text ads on the right side of the search results page, while increasing the amount of ads appearing above the unpaid organic results from three to four. In addition, the maximum number of ads on the search results page was trimmed to seven from 11. 

Google said it made the changes, in part, because the ads on the right side weren't clicked on as much as the other ads. The effect, dealers worry, will be heightened competition and higher costs for the top four spots in Google's AdWords auction, which determines what ads make it to those sought-after listings for a given search term. 

"It's hypercompetitive," Max Steckler, vice president of product management for digital marketing firm CDK Global, told Automotive News shortly after the changes were made, adding: "Not only do you have dealers competing for that space; you have manufacturers competing for that space. Then you could have automotive portals and research sites that are competing for that space."

Shaun Kniffin, marketing and technology director for Germain Motor Co., noted another side effect of the layout tweaks: decreased traffic from the organic search listings that appear below the top four ads. 

Kniffin said organic search traffic for his stores has fallen around 15 percent on average since the changes. Germain has 16 stores in Michigan, Ohio and Florida. 

Despite the traffic slips, Kniffin said he likes the consistency across Google's mobile and desktop search formats after the alterations.

Street Auto's Paschal, who said he has seen Google search ad prices go up, isn't going to burn his marketing budget battling for the top spots.

He's more interested in building a diverse strategy on Facebook where his VW and Toyota stores engage consumers with live video walkarounds of vehicles, targeted ads and a podcast they produce each week.

The VW store's general manager, John Luciano, hosts Street Auto's video podcast, which also is released on video so people have a visual to go along with it. Paschal said the podcast, dubbed "Motormouth," is a way to humanize Luciano and often features figures from around the community.

The podcast is distributed through Apple iTunes and the Google Play store. It's also posted on YouTube and Facebook.

The group leverages the new Facebook Live video-streaming service to engage consumers with vehicle walkarounds as well as wacky moments that are good for quick laughs. Two salesmen, who lost a bet with a manager after failing to hit their sales targets, had to wear embarrassing pink shorts and belly shirts at the store on Memorial Day while on Facebook Live.

But Paschal said he hasn't given up on Google advertising completely. Although Street Auto doesn't spend as much on Google search ads, the group is investing in its new offerings such as promoted pins that appear on Google Maps to highlight certain companies. "Here's a big question: When was the last time you clicked on a Google ad? It's been years for me," Paschal said.

DARCARS Automotive Group teamed with its website and advertising provider Dealer.com to drive more than 45,000 vehicle detail page views from Facebook users to five of its dealership websites from September to December 2015.

Dealer.com built a framework using Facebook's dynamic ads, which grabbed vehicle photos from the DARCARS inventory database and used them in ads that appear in the news feeds of nearby consumers.

According to Facebook, Dealer.com targeted consumers who had viewed the DARCARS inventory as well as "a lookalike audience of people who shared key characteristics with that group." The campaign reached 2.6 million people.

"Facebook has made a big impact on our sales, generating traffic at a fraction of the cost of other ad venues," Haman Baniamam, director of technology and e-commerce for DARCARS, said in a statement. "Customers mention the Facebook ads they've seen, which gives us insight into the conversion value of these ads."

Todd Cahan, managing partner of Max Madsen Auto Group in suburban Chicago, said he's noticing that his ad dollars on Google search aren't going as far as they used to. He said it's taking increasingly more money to gain visibility for his two Mitsubishi stores.

Cahan said Google's wide net is a major draw, but he sees potential for his stores to spend more on Facebook in the years ahead. His stores spend around 10 percent of their digital ad budgets on Facebook.

Like Street Auto, the Max Madsen stores sometimes push specific models on Facebook with LotLinx technology in targeted campaigns.

"Google probably has far greater exposure to a greater number of people," Cahan said, "but Facebook is probably going to start closing the value of that gap with the quality of people they're communicating with."