The automotive industry is wasting nearly $1 billion per year on ineffective Paid Search (SEM) advertising that doesn't lead to vehicle sales. This amounts to 2% of the profits of the top 4 OEMs in North America (General Motors, Ford, Toyota & Chrysler.)
To put the magnitude of this problem in perspective, Ford's share price recently dropped 8% after announcing a 4th quarter earnings warning of 6%, so a 2% impact on earnings is significant both in terms of stock price and market capitalization.
For several years now I've been mildly obsessed with the idea of measuring quality rather than quantity in the automotive industry. One of the first things we built at Wizely is a tool called "Dollars and $ense" that measures the quality of ad spend by relating it to vehicle sales and revenue. As adoption of the tool has increased, the size and scope of the Paid Search waste in our industry has become increasingly alarming.
To be clear, I'm certainly not suggesting that ALL Paid Search / SEM is wasted spend. In fact, Paid Search is the strong foundation on which every good digital marketing strategy should be built. When managed correctly and monitored well, it works. However, I am suggesting that a significant portion of SEM money spent at the automotive dealership level is wasted.
Wizely's Dollars & $ense tool defines "waste" as spend that impacts ZERO sales.