How to Reduce Your Dealership’s Paid Search Advertising Waste
Updated: Jun 29, 2020
James Grace, Wizely Founder and CEO, was recently interviewed by CBT News to discuss Wizely’s efforts to help dealerships reduce paid search advertising waste. Check out the interview here, or on the CBT News website.
Jim Fitzpatrick: Thanks very much for joining us, James.
James Grace: No problem. I’m glad to be here. I appreciate the opportunity.
Jim Fitzpatrick: Sure, and congratulations on your new company, it sounds very exciting.
James Grace: Thanks so much, we’re having a great time.
Jim Fitzpatrick: Good. Good. You wrote an article recently, in February in fact, titled Automotive Paid Search Waste Approaches $1 Billion Per Year. That’s a big number. Talk to us about what’s in that article and what your findings were.
James Grace: Sure. I started working with clients in a consulting capacity once we started Wizely and looking at how did they optimize their spend. I just started to see a lot of waste on SEM paid search. I started to think, “Man, somebody’s got to care about this in the industry.” I calculated what the impact was across everything, thinking it would have to be significant, and what we ended up finding is a typical dealership is wasting about four grand a month in ineffective spend.
Jim Fitzpatrick: So, let’s drill down a little. What is considered waste in terms of paid search?
James Grace: Wizely developed this algorithm that detects sales based on online activity. That’s really the magic behind what we’ve been able to do. Fundamentally we work with dealers to say, “It’s a binary thing, if you sell one or more cars from this campaign, that’s a good spend. If you sell zero cars then it’s wasted spend.” When I talk about waste here, I’m talking about spend that’s linked to zero car sales, which hopefully we can all agree is not where we should be spending our money.
Jim Fitzpatrick: What are the SEM mistakes that you see dealers make most often?
James Grace: I think dealers need to focus on what’s my mechanism for measuring quality It’s not enough to just focus on quantity, visits, clicks, etc. It really needs to be a method for measuring quality. So that’s number one is sort of how am I telling the difference between something that’s working and something that’s not.
Beyond that I think it’s just a level of focus. It really quickly gets to a really constructive dialogue with the agency or whoever’s doing the SEM to say, “Hey why are we spending two grand a month on our OEMs name, broad match, keywords?” That’s probably not the best way to spend.
So I think the combination of let’s have a method for measuring quality, and then let’s dig in deep enough to have a meaningful conversation about whether this is good spend or not, is the recipe. I haven’t worked with a dealer yet that wasn’t able to look at those results and sort of intuitively understand, yeah, that’s not the best way for me to be going after my customers.
Jim Fitzpatrick: What analytical tools should dealers use to manage paid search?
James Grace: Well I think Google has all the tools. When I first started building this thing, Google has some great E-commerce tools that connect ad spend to sales. They just don’t work for auto, because we don’t sell stuff online. So the magic behind what we did at Wizely was okay, well if I can develop this algorithm that reasonably predicts a sale, then suddenly a dealership’s website is the same as amazon.com in terms of being able to connect ad spend to actual results.
So I really kind of shifted my mindset to be like how do I make existing tools that everyone else are using functional in the auto space? So I think between Google Ad Words, Google Search Console, Google Analytics, they’re all there and there’s lots of training available.
So one of the things I did when I first joined Cox, when I first joined dealer.com, I went on a road trip and went and sat in dealerships and said to clients, “Okay, I’m in charge of analytics. What would a perfect analytics tool for you to be? What do you need?” One of the big takeaways was, “Look I maybe look at this for some small percentage a week, a month. If I can’t get to the information I need quickly, I’m just not going to do it.”
So those conversations ring in my head every time I sit down to develop something new and I’m really gratified that our customers at Wizely seem to be able to use what we do to make decisions and we’ve got stuff we gotta work on and I’ve got a product road map a mile long. But it’s really gratifying to work with clients and see them able to actually make use of what we’re doing to change their business. It really makes it all worth it for me.
Jim Fitzpatrick: Yeah, you’ve got dealers out there that will … The vendor will walk in and say, “Oh my God, whoever’s doing your SEM is completely inefficient and they’re leaving all this money on the table.” And the dealer will say, “Really? And yet, we never sold more cars than we did last month.” I think we lose sight of that sometimes.
James Grace: I completely agree with you. I think as somebody who does digital marketing for a living, it was very humbling to realize that we are not the biggest influence in the situation. And you’re a piece of the overall puzzle and it’s a big spend item. Dealers are spending a lot of money on marketing. So do I want to make it better and make it most effective for them and have them be able to trust what we’re doing and feel good about how their brand is represented? Yes, absolutely.
But you’re absolutely right, that it’s not the be all and end all of selling cars and so I mean the primary focus we have at Wizely right now is right size, right? I’m saying, “Look, let’s get your spend at a level and we’re not gonna impact your car sales.” This isn’t about I’m gonna suddenly revolutionize everything and you’re gonna be selling 30% more cars every month. This is about let’s make this marketing budget line item less of a drain on profitability and be just better at it.
Jim Fitzpatrick: That’s right and then how do you charge? Just on a monthly basis for your services or …
James Grace: Yep, the product is assessed monthly. It retails for 1299 a month and then there’s discounts for volume and generally, we’re saving people three, four grand a month and so the deal pencils pretty quickly from my point of view in terms of paying for our services and-
Jim Fitzpatrick: Well James Grace, founder and CEO of the all new Wizely, which is a phenomenal vendor out there. Give James a call and him do an audit on your store. I’m sure you’re available to do that right?
James Grace: Yes absolutely. It’s one of my favorite things to do. Like I said, getting into somebody’s specific local business and trying to figure out what they need and what help they need, it’s a great way to spend my day. So yes, absolutely, I love to have those conversations.
Jim Fitzpatrick: Great, James thank you so much for joining us on CBT News, it was great to see you again. Hopefully we can have you back in a few months and see how things are going.
James Grace: Yeah, yeah, absolutely Jim, I’d love to do that. It’s always fun to talk to you.
Jim Fitzpatrick: Yep, likewise, take care.