Pub. 17 2018-2019 Issue 1

N E W J E R S E Y C O A L I T I O N O F A U T O M O T I V E R E T A I L E R S I S S U E N O . 2 , 2 0 1 8 24 new jersey auto retailer Dealer Agency Cost Per Lead Reports Are Misleading BY BRIAN PASCH Dealers who use Google AdWords to connect their franchise with local in-market shoppers should take a minute to understand how your Cost-Per-Lead (CPL) reports are being generated by your ad agency. For many dealers, the numbers on your AdWords reports are way off. Example #1: AdWords Reporting Let's start with a typical monthly sum- mary report that agencies send to dealers. Example #1 DOES NOT list performance metrics by campaign. This type of sum- mary report "averages up" performance from efficient branding campaigns (which produce the majority of conversions), with poor performing campaigns, to make the CPL numbers look good. There are no standards in the automotive industry that define a conversion (lead) . For our purposes, I will define a lead as a con- nected phone call, lead form completion, or a chat/SMS session that generates a sales opportunity in the CRM. In Example #1, the combined new and used car advertising investments generated 200 leads for $10,000. The agency calculates the CPL at $50, which is misleading. Google AdWords is inefficient in generating sales leads. New and Used Car Managers have to sell cars to keep their job. In Example #1, the managers allocated $10,000 to help them sell more cars. They are compensated based on the number of units sold and gross profits. Do most managers understand that 25-30 percent of their money is helping fill the service drive? When dealership managers analyze the "outcomes" of their AdWords invest- ments, they will be shocked. According to research from CarWars and CallRevu, less than 15 percent of AdWords phone calls are for sales opportunities. Since phone calls are the number one conver- sion channel for dealers using AdWords, understanding phone outcomes is critical. Example #2: AdWords Reporting with Outcome Inspection When dealers listen to the phone calls, and inspect lead duplicates, the actual