Articles: Marketing & Sales

Maximizing Online Advertising Campaigns

Dave LaLonde is Senior Vice President and Search Engine Optimizer for Auto Credit Express. The ACE Group is a special finance total solutions firm offering their dealership partners entry level and advanced sub prime training, an easy to use online software, and an expert auto sales lead system.

If your store isn't currently using online advertising, you should look into it as a method to attract highly motivated customers. Advertising via the internet represents a huge opportunity for car dealers, particularly those focusing on sub prime, to get their names and products in front of millions of consumers who are looking for exactly what they are selling. To take advantage of this market, however, you first need to understand the dynamics of effectively advertising online.

Online advertising is made up of countless publishers who accept money to provide increased exposure for their clients' products and services to a targeted online audience. Many online publishers are reputable, many more, however, are not and produce minimal results while wasting valuable advertising dollars. Here is a list of suggestions and steps to follow that will assist you in maximizing your online advertising campaigns.

I receive calls daily from online marketers that have seen our ads running on Yahoo, Google, and MSN. Before I consider advertising with them I always ask four questions.

• What is the name of your company?
• What is the domain name of the site(s) or portal where my ad will appear?
• Will my ad be available to everyone or does the browser need to have your software installed on their computer to see my ads?
• Can you show me some of your current ads?

After gathering this information, I can decide in two minutes whether I should consider establishing a relationship with this publisher.

The 2 Minute Drill:

• Search for the company and website names on Google or Yahoo. Review the results and often you will find message boards loaded with complaints from previous clients. Other times there are little or no results. If either of these occurs, be very cautious in proceeding.
• Search for the full URL on the traffic ranking website www.alexa.com. For example search for http://www.yahoo.com. Yahoo has a numeric traffic ranking of 1; they are the most popular site in the world. If a national general topic site does not have a ranking less than 10,000, I would not advertise on it. The lower the numerical ranking the better results the site will produce. The numerical ranking of local sites will vary but if you expect any traffic at all the site should have a numerical ranking of less than 200,000.
• You can also determine how long the site has been active by performing a WHOIS search (pronounced who is) at Register.com or any other registrar. If the site is fairly new, I would be cautious in proceeding.
• If web browsers need the publishers software installed for ads to be displayed- stay away. The publisher is using adware or spyware to display ads. If you advertise with them, you're likely to get more inquires from upset people that want the software removed than you will from people that want your services.

Cost and Risk

If a publisher passes the 2 Minute Drill, your next consideration is cost. What method does the publisher use to determine advertising cost? There are only a few methods online publishers use to determine the cost basis for advertising on their site or portal. Theses methods are CPM, CPC, CPA, and CPS.

CPM – High Risk: Cost per 1,000 Ad Impressions.

• Rates vary but expect to pay from $0.25 to $0.50 for general traffic and $1.00 to $2.00 for targeted traffic. CPM cost basis is commonly used with banner advertising and is more suited for branding purposes than it is for a call to action.

CPC – Moderate Risk: Cost per Click.

• Rates vary widely by site / portal. This method is most often used for text link ads.
  • Fixed CPC: The publisher charges on fixed rate per click. Usually your ad is placed on a rotation according to your budget and campaign length.
  • Variable CPC. Commonly used on Pay per Click (PPC) Search Engines. Advertisers place individual CPC bids on select keywords. I've seen rates as low as $.01 per click and as high as $100.00 per click. At the time of this writing ,for example, on Yahoo Search the keyword "Auto Giant" was as high as $50.00 per click and the words "No Money Down Car" was only $.12 CPC.

CPA – Low Risk: Cost per Action

• Also referred to as cost per lead. This cost basis is popular with advertisers that distribute their services via banner ad and text links to a national audience of publishers and is rarely available to local advertisers.

CPS – No Risk: Cost per Sale.

• This method is popular with national advertisers that can close a sale online in real time. Examples include online electronic stores and online casinos. This method is also rarely available to local advertisers.

The Internet Sales Pipeline

For nearly every online sub prime campaign, the conversion pipeline is:

• Consumers see your ad (CPM cost basis)
• Consumer clicks your ad (CPC cost basis)
• You receive a lead (CPA cost basis)
• Set an Appointment
• Get a Lender Approval
• Sell a Car (CPS cost basis)

It should be clear that the majority of the risk exists early in the pipeline and must be managed by the advertiser.

Regardless of the cost basis the publisher uses, what really matters is the Cost Per Sale and the ROI. If you've tried an online CPM or CPC campaign and the Cost Per Sale was too expensive, your first reaction is to assign blame to the publisher. The publisher, however, only plays a small role in the Cost Per Sale or ROI for CPM and CPC campaigns. For these campaigns the publisher is only responsible for the first gate in the pipeline; making your ad visible to its audience. Assuming that you are dealing with a publisher that passed the 2 minute drill, the rest is up to you. If your campaign fails, determine the point(s) of failure within the pipeline, correct them, and try it again.

Maximizing CPM vs. CPC Campaigns

With a CPM campaign, your goal is to get as many people as possible to click your ad. You are not paying per visitor; you are paying each time your ad is displayed. You will have the opportunity to clarify your message after the browser enters your website. Your goal is to get them to your website or webpage where you have the call to action.

On the other hand, if you are conducting a CPC campaign, it's wise to have a verbal filter in your ad so that only relevant traffic will click through.

Example of a CPM Ad, the goal is to get the browser to visit your site.


Example of a CPC Ad, the goal is to get a qualified browser to click your ad.


In the above example Bad Credit and New Pontiac are the filters. Additional verbal filters include your geographic location for example:


High vs. Low Converting Keywords

There is an additional factor to consider when optimizing CPC campaigns for PPC search engines; how well do the selected keywords convert. Some keywords deliver high volumes of traffic with substandard results. Keywords with the term "Calculator" are often suggested by publishers when setting up a sub prime campaign, "Car Loan Calculator", "Payment Calculator", and so forth. These words are an absolute waste of money as the traffic does not convert.

Other keywords receive only a small amount of traffic but convert at a very high rate for sub prime finance. Many of these words are never recommended by publishers when setting up a campaign because the CPC price and volume are low. For example, I've found great success using keywords that incorporate the word "Car Lot" and "Cheap" "Detroit used car lot", "Cheap used cars", and so forth.

Asking the right probing questions, utilizing the 2 minute drill, selecting the right method to determine the cost of advertising and selecting only high converting keywords are all the necessary components to ensure a successful online advertising campaign.

Today smart companies are maximizing the unique potential of each advertising medium -- offline and online. They are combining online advertising with their traditional marketing efforts to maximize exposure with their targeted customer segments. Doing your due diligence and understanding the online advertising data you should be looking at to make informed marketing decisions will make sure you capitalize on your promotional investment.

Next month we will examine what the right balance is between Lead Quantity vs. Lead Quality and the impact it has on the marketplace.

Until then, good luck and good selling.

Published in World of Special Finance Magazine
February Issue 2006