Does your paid search strategy need a MOT?

UK automotive businesses spent over £81 million on paid search advertising in 2020. Was that money wasted?

Published:  23 January, 2022

Globally, 97% of advertising professionals in the automotive industry say they are using paid search as an advertising channel. It makes sense when you consider that 97% of customers looking to buy, fix, or customise a car start their journey online.
    
However, many businesses are investing in this medium without properly assessing how much of their spending is delivering a return. With the UK automotive sector expected to have spent almost £2 billion in digital advertising in 2021, marketers must be asking how much of their paid search spending is truly effective, and how much is going to waste.
    
A deeper analysis of existing campaigns may reveal surprising insights which can trigger immediate corrective action. For instance, one study of 2,000 PPC accounts found that that the average account is producing all of its sales from just 12% of its keywords. Going further, paid search strategies should be based on a more sophisticated understanding of customers and how they are shopping, rather than treating every customer in exactly the same way, as if they are entirely new to a brand. Only then can businesses begin to identify where paid search is relevant and likely to be effective.
    
So how big is the problem? At Go Inspire, we conducted a series of control tests with customers between 2018 and 2020, covering the behaviours of over 500,000 consumers. The control tests were able to demonstrate typical proportional savings on paid search spend. We then used the results to estimate how much businesses in the UK automotive sector could be saving by intelligently optimising their paid search strategies. A conservative estimate is that automotive businesses could be saving £81.6 million of their paid search budget. What does this mean in practice? At Go Inspire, we’ve put together key pointers to help marketers bring their paid search strategies up to speed.

1: Build a 360o customer view
Where does paid search fit into a customer’s purchasing journey? The only way to answer this question is by having a holistic view of customer behaviour, linking both online and offline activity. This should then start to reveal the typical customer journey and triggers. It will also allow customers to be segmented by their preferences, value, loyalty and future potential. This analysis will reveal at what point paid search advertising is most effective, if at all. Though there are many tools available for companies to build this 360o customer view, they are still heavily under-used.

2: Review brand name bidding
One analysis suggests that almost half of traffic for online automotive content comes from organic searching. Without an understanding of customer behaviour and therefore intent, companies may be wastefully presenting paid search advertising to customers who are already looking for them organically. Paid search should be used to capture the attention of lapsed customers or those looking for a competitor.

3: Stop marketing to phantoms
Phantoms are mostly customers who accidentally visit a page, leave and don’t come back. Delivering marketing messages to unresponsive phantoms can lead to quality scores dropping, as these scores are based on click-through rates. This in turn increases your cost per click. However, companies should identify which phantoms have previously engaged with their brand and take the opportunity to entice them back.

4: Keep refreshing messaging
Once marketers have a holistic understand of their customer segments, they must continually revisit their strategies and optimise campaigns. As we emerge from the pandemic, behavioural segments are continually changing. Businesses must be able to flexibly adapt to any changes, to gain the best possible return from their investment, and grasp emerging opportunities.
    
To read Go Inspire’s report, ‘Which bit’s not working? An estimate of current wastage rates on paid search advertising’, go to: www.goinspire.co.uk/whitepapers/which-bits-not-working/



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