Starting with Part One and through Part Three we have examined changing technology, design advancements and marketing strategies that are making website analytics obsolete. Dynamic website content, more and more website traffic being non-human, and marketing strategies that are one to one marketing all are making aggregate website performance less and less relevant. Our discussion then moved on to measuring the behavior of auto shoppers and the impact campaigns, technology and content have on it. After all, auto shoppers buy cars, not websites. So doesn’t it only make sense we should be measuring the auto shopper intent and vehicle consideration over pageviews and time on site?
Now on to Part 4, our last segment in this series. We will look at outcome metrics, but not the traditional measures like click through rate, lead to visitor ration, for example. We will reexamine ROI (return on investment), and define new Conversion Propensity Metrics.
The ABCs of Auto Shopper Analytics
• Auto Shoppers – Attributes and Attribution
• Behavior – Intent, Intensity and Engagement
• Conversion – Conversion Propensity/Conversion on Investment
Why Conversion Metrics? Conversion metrics possess the unique ability to highlight opportunity costs. That is, they allow us to see across the path to purchase and identify where along the way opportunities to convert an auto shopper or compel an auto shopper down the path to purchase were missed.
Why is this important? By reexamining ROI we can see the power of conversion metrics to highlight new sales opportunities. ROI is a critical measurement but it measures only an outcome, that is Revenue (X) was generated from investment (Y), therefore my return or outcome equals X/Y. The ROI calculation assumes that X is fully optimized, that any deficiency in X is directly related to Y or within the service or solutions that are being measured.
So let’s examine this assumption. Let’s say your advertising agency invested $20,000 in two PPC. Campaign 1, deep linked into website VDP (vehicle detail page) pages, the other, Campaign 2, to the website’s home page. Keywords that are utilized by high intensity auto shoppers with your make and models high in their vehicle consideration set where utilized. So the campaigns will attract consumers with near-term purchase intent, and with a behavioral cadence indicating a high probability to purchase the targeted make/model. So far so good.
And as a result of Campaign 1 which deep linked into the VDP page, 50 vehicles were sold with a gross profit of $75,000 dollars. Campaign 2 which linked to the home page, 75 vehicles sold with gross profit of $100,000. And yes we have a positive ROI for both but Campaign 2 had a stronger ROI. Your decision…..no more deep linking campaigns and fire the vendor. But WAIT!
What were the missed opportunities for each campaign? Did the content on the website pages properly reflect the promise of their respective campaign, engage the auto shopper and increase the probability of a sale?
This is where Conversion Metrics come into play and can dramatically change the context of a ROI calculation. Let’s examine the lesser ROI campaign, Campaign 2. The strategy was to attract shoppers of a particular vehicle directly to that specific vehicle within the dealer’s inventory. Makes sense as long as the dealer has the specific inventory and is competitively priced, has clean vehicle detail page design and photography, and a clear call to action.
By measuring conversion across the auto shopping corridor within your website (see illustration A) you can measure and assess how well your website, or virtual showroom, is prepared to take the traffic that your campaigns source and compel those consumers down the path to purchase. With Campaign 2 deep linking to a VDP page may be a fatal marketing tactic, if your inventory is not aligned with market demand, the cars you feature are incorrectly priced, or the design of the page is flawed. All of these items create “opportunity cost”. Cost that is not reflected in the ROI calculation. Fix these items and suddenly you’ll get a dramatically different ROI from Campaign 2, without changing a single element within the campaign’s execution.
Now you ask, if these issues were present how did Campaign 1 outperform Campaign 2? Wouldn’t they have mitigated its ROI as well? Not necessarily. Auto shoppers directed to the homepage had an opportunity to navigate their shopping corridor and inventory selection themselves. They may have found a friendly homepage inventory search tool, clear and concise inventory search results and a well-defined call to action. They may have self-selected inventory they felt was priced right and headed to the dealership showroom. Perhaps they never made it to the VDP page and thus were never forced to make a decision about one specific vehicle, or navigate the VDP pages poor design and call to action.
Below is a chart (Illustration B) which references bounce rates of known in-market auto shoppers along the shopping corridor within a local dealership website. Notice how the bounce rate is higher on VDP pages than the home page. This is the first clue to not only poorly targeted audience or traffic, but may indicate misaligned inventory, pricing or design at the VDP page level.
With this evidence, further examination of conversion along the shopping corridor is warranted. And as we stated in Parts 2 and 3 of this series, beyond, how many shoppers move from inventory search to VDP page view we want to examine the intent and consideration of those who bounce as well. Are those that bounce, more curious than serious, where are they on the path to purchase, how highly do your vehicles rank within their consideration set, and what are their cross shopping behaviors?
If there are high volumes of consumers with true intent and high probability of purchase among the vehicles in inventory, then it’s time to reexamine vehicle pricing and VDP page design. In other words, we are attracting the right consumers to the right cars but at the wrong price or merchandising with the wrong content and page design. Again, opportunity cost is a factor in this example and is distorting the ROI calculation.
As you can see understanding how well you are converting auto shoppers across the shopping corridor is critical if you are going to achieve a true understanding of the performance of your marketing and advertising initiatives and properly assess the ROI from each with clear context and relevancy.
Without Conversion Metrics your analytics are largely blinded to the true potential, true opportunities that are present along the path to purchase for your dealership, and you will never optimize your return on your investment.
Now, we come to the end of our series on Website Analytics and the evolution to Auto Shopper Analytics. As online technology, internet enabled devices, marketing tactics, and targeting capabilities continue to expand and evolve the need for a new set of analytics only becomes more critical. Or as a wise person once said, “I never sold a car to a website, only to Auto Shoppers, why don’t we try measuring them instead?”