Lead Trends

Online Advertising - Google Ads

Studies have shown that Google Ads cost per lead has increased for 91% of industries year over year, with an average increase of 19%. The industries most impacted are Arts & Entertainment and Travel due to inflation after the impact of the pandemic.

However, with the significant increase in CPL, Google Ads also sees a significant decrease of 14% on average in conversion rate. Due to inflation and subsequent growth in consumer index price and the cost of business operations, consumers are reported to have cut back on expenses over arts & entertainment and traveling, leading to lower conversion rates and higher CPL. 

Another common factor spotted across industries, especially automotive, is limited inventory/shortage in supply. All these factors cause advertisers to reduce online advertising budgets, leading to ever-growing cost per click and higher CPL.

Consumer Behavior

As a result of the previously mentioned inflation and shortage of inventory, consumer behavior has also changed over the past year. Shoppers are reported to spend significantly more time conducting online research than in recent years. The increase in online research is shown through time spent online, number of pages browsed, media view time, and number of dealerships compared and researched. The average online research time for shoppers has increased by 17% from 12 to 15 minutes, and the number of websites a shopper visits before making a decision has increased from 4 to 4.9. Cross-shopping and model-switching (particularly down-sizing) have also increased among shoppers.  

How to Adapt

Marketing Strategies

1. Carefully evaluate your unique selling points and allocate advertising budgets wisely.
2. Examine which current strategies are generating the most ROAS and which are generating waste and inefficiencies.
3. Take full advantage of free/low-cost advertising and digital services (organic social and SEO).
4. Assess your competition and pricing, optimizing as needed.
5. Reduce goods and services that stabilize costs (not offering specific discounts, closing down on certain days, etc.).
6. Automate processes wherever one sees fit.
7. Change to different supplies that offer lower prices.
8. Stock up inventory in advance.
9. Improve brand loyalty and overall satisfaction by rewarding customers.
10. Full-funnel approach for campaigns to ensure reaching shoppers throughout each phase of the journey while converting low-funnel shoppers with retargeting and email campaigns. 

Website Practices to Increase Leads

1. Offer clear and concise contact information and reduce repeated branded content.
2. Ensure that your website is mobile-friendly.
3. Cross-promote with other businesses and local causes.
4. Include only high-quality, current, and detailed media (photos and videos) of inventory being sold online.
5. Provide digital retailing tools.
6. Focus efforts on low-funnel tactics with efficient buying methods (CPC).
7. Create a robust referral program.
8. Make it easy for customers to share your content on social media.
9. Be transparent about policies, vehicle damages, pricing, etc., to increase brand loyalty and shopper satisfaction.

Sources:

1. “Google Ads Cost Per Lead Has Increased for 91% of Industries YoY” by Kristen McCormick
2. “Marketing During Inflation: How to Adapt & Thrive” by Mitchell Leiman
3. “Cox Automotive Car Buyer Journey” – 2022. © 2022 by Cox Automotive, Inc.
4. “20 Best Auto Dealer Lead Generation Ideas [2022]”, Modera.com
5. “Help Your Customers Take Action with VDP Best Practices”, Dealer.com
6. “5 VDP Best Practices to Boost Conversions“ by Erin Lomax

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