Google has an uncanny knack for disrupting entire industries (like search, phones, and online storage just to name a few) and they are now testing a new online car-shopping service in San Francisco that could disrupt one of the largest industries in the U.S..
The debate can be made that this service will further commoditize the auto shopping experience, something that auto dealers claim sites like AutoTrader.com have already started to do. Regardless, this is something automotive SEO’s and PPC providers should watch closely.
Google’s Online Car Shopping Experience
Let’s take a look at how it works. The service is currently only available in the San Francisco area, but Google has plans to roll it out across the state according to this Automotive News article. For example, conduct a search for “honda accord san francisco” on Google and you will likely find a Search Engine Results Page like this: Notice that a very clean, simple, Sponsored listing shows up right in the first position, with “Honda Prices on Google”. Since it’s a Sponsored listing, Google can serve it’s ad above the likes of Cars.com and AutoTrader.com AND they make money. Dealerships reportedly pay a fee, typically starting at $15 per lead and up, to have their listings displayed. Similar to Google’s AdWords platform, higher bids receive more prominent positions, allowing dealerships willing to pay more an opportunity for better exposure.
Once I select the Honda Accord I’m interested in, I’m taken to this page where I can refine my search and then request a quote from any of the dealers displaying on the right.
When I select “Request Quotes” (I’m sure Google is testing this Call To Action) I’m given three ways to learn more: email the dealer, request the dealer call me, or call the dealer.
According to dealer feedback reported by Automotive News, who broke the story in March, the “lead” information is kept private. Dealers receive an anonymous email if the “email the dealer” option is used. The email remains active as long as the lead responds. If the phone option is used, Google assigns an anonymous phone number to to the lead which forwards call from the dealership to the lead and expires after 6 call attempts. This give the consumer all of the power and leaves the dealership with no long term follow-up options.
What Does This Mean for Dealerships?
First off, Google’s current model may not be compliant across the United States. “The google pay per lead billing model isn’t compliant with Virginia Motor Vehicle Dealer Board law. They will have to amend their billing model to be allowed to enter the Virginia market,” says Zack Cochran, General Manager of Whitten Brothers in Richmond, Virginia. Google may run into similar issues in other states as they attempt to roll this out nationally.
However, Google has ways of pushing their weight around and it’s best that dealers prepare for the change now.
The auto industry is ripe for change, but is Google the right enterprise to come in and clean it up? Or will this service commoditize the car buying experience? If I can quickly see the different prices from 50 dealerships for a 2013 Honda Accord, is there no longer an opportunity to differentiate on anything beyond price? And if everyone is shopping online, will this force dealerships to play in order to avoid the risk of missing out while their competitors receive all the leads? It’s too early to tell what impact this will have on buyer behaviors but this is something dealerships and online advertisers alike should be watching very carefully.