“What is a conversion?”
If you're at all familiar with the world of digital marketing, then you probably understand why this question comes up so often from dealerships like your own. However, there is so much more to this seemingly innocuous request than merely what goes into the simple (and usually incorrect) answers it often elicits.
In fact, once you start digging beneath the surface, it doesn’t take long to realize that there are many factors dealers are simply not aware of when it comes to the true nature of conversions and their equally misunderstood counterparts, engagement metrics.
With this in mind, let's take a minute to kick off a discussion and establish what a true conversion is – and how your dealership can differentiate between these valuable connections and other, less useful figures that certain unsavory vendors are more than happy to prop up in the place of legitimate and meaningful customer interaction.
To start things off, we’ll need to lay out a workable and accurate definition of a conversion for your dealership. However, doing so requires a fundamental understanding of the end goal of this interaction.
In the automotive space, this means that we are talking about selling cars, so a conversion is actually synonymous with a lead. From here, we can boil things down even more by pointing out that leads come in four forms:
While each of these lead variations has its own unique aspects and attributes, they all share one trait in common. Specifically, each of these interactions gives your sales team the ability to work a deal or contact the interested party.
To put it all in plain terms, these are the only four connections with customers from a dealer's perspective that can measurably help you sell more cars – and therefore earn the right to be considered leads.
Going forward, we’ll refer to these leads as conversions to help keep the conversation streamlined. Just keep in mind that when we make mention of true or legitimate conversions, we’re talking about these specific opportunities for customer interaction.
If defining a conversion is so simple, why is there such a fuss surrounding the process of measuring these metrics? Unfortunately, the bulk of this confusion stems from the reality that many web and marketing agencies will hide website or pay-per-click (PPC) inefficiencies behind other "conversion" metrics and stats that do not create a sale or, in the most minimal of measurements, even the opportunity to make an attempt at this kind of interaction.
The bread and butter of these less than upstanding members of the digital marketing community comes in the form of engagement metrics like search result pages (SRPs) or SRP views, map page views, vehicle detail pages (VDPs), and time spent on site. While these data points might come across as flashy or make for a great sales pitch, the fact of the matter is that they only measure user engagement – and not actual lead generation for the website.
|This Is a Conversion||This Is an Engagement|
|Walk-in traffic||Time spent on site|
|Phone calls||Map/directions/contact views|
|Service appointments||Average page views|
As you can see from the examples showcased in the above chart, there’s a clear difference between both the types of interactions that constitute engagement metrics and conversions, as well as what these interactions offer to your dealership. This means that passing off one for the other (in this case, engagement metrics for conversions) is a patently false tactic that does nothing but damage your dealership’s effectiveness in the digital world.
The distasteful practice of misrepresenting engagement metrics as conversions has a negative impact on dealerships, primarily because it misleads organizations such as your own into thinking that they are growing their business in the digital sector, even in the face of sales that could be steadily dropping.
Going a step further, the unfortunate part here is that without a more robust understanding of the conversion measurement process, falling prey to these slimy tactics can happen in the blink of an eye.
A great example of this situation in action comes in the form of optimizing a paid search campaign. If you are working with a vendor that measures productivity via engagement metrics, and not true conversions, you could think that your campaign is generating hundreds, if not thousands, of conversions a month. However, these supposed "conversions" are far from worthwhile.
After dealing with this specific scenario many times in the past for other clients, we have found that these dealerships were only getting 20 to 30 actual conversions a month, but were receiving monthly reports stating that they had garnered (and paid for) 100 to 1000 (or more) conversions over the same time period.
The worst case we have seen comes from a dealership that was told it had over 4500 conversions a month. As great as this number looked on the surface, a deep dive into the data established that the true number of conversions received by this organization actually averaged between 10 and 15 conversions on a monthly basis.
Considering how important the finite marketing budget of any dealership is to its success and growth, it's safe to say that such a massive discrepancy (and such a substantial distortion of the facts) is simply not good enough.
"Your dealership is being misled by vendors that try to pass off engagement metrics as legitimate conversions."
Obviously, these numbers are just examples, and metrics will vary from dealership to dealership and market to market. However, the point remains the same: Your dealership is being misled by vendors that try to pass off engagement metrics as legitimate conversions.
With so much confusion and uncertainty clouding over the conversation that surrounds the process of properly vetting and tallying conversions, it stands to reason that the biggest player in the game, Google (via the AdWords program), would step up to the plate and ensure that everyone adheres to aboveboard and transparent practices, right? While this assumption might seem like a “no-brainer,” even this mighty tech titan has plenty of incentive to not always accurately differentiate between actual conversions and engagement metrics.
" Google, just like third-party vendors and PPC service providers, is a for-profit company."
Google, just like third-party vendors and PPC service providers, is a for-profit company. With this in mind, it unfortunately makes quite a bit of sense for Google to look the other way while your PPC budget is misspent or your conversion numbers are skewed. Not only do hyperinflated metrics and rates help convince dealerships to invest more into misguided PPC campaigns, this practice also serves as a retention tool of sorts for Google in regard to the vendors that stand as the middlemen in this process.
So far, there’s no denying that we’ve been pretty hard on some of the PPC vendors out there. However, we’d be remiss if we didn’t also point out that a significant amount of the parties involved in this process aren't harboring malicious intent; they simply don’t know what they’re doing when it comes to quantifying conversions or properly calculating the return on investment (ROI) related to a dealership's marketing budget.
To prove to you that these individuals and organizations often don’t know any better, and that Google is more than willing to turn a blind eye to the situation as they miscalculate these metrics, let's take a look at how this all plays out in the example below. Here, you'll see the numbers from a six-month period for a current Remora client that previously worked with an ill-informed vendor.
As you can see, this dealership raked in over 141,000 total conversions according to its prior PPC service provider. Sounds like a dream come true for anyone in the automotive world, right?
Impressive though this number might be as part of a sales call, once you establish exactly what counts as a conversion on this list as per our aforementioned definition, the inflated figure in question starts to lose quite a bit of its luster. In total, the number of legitimate conversions, which include "Value Your Trade" (0), "Leads" (880), and "Vehicle Exchange Program" (274) inputs, tallies up to the far more realistic (and accurate) 1,154 mark.
(Quick Note: The reason we don’t calculate Goal 2 "Form Submission" completions into our final figure comes from the fact that we were able to establish that Goal 8 "Leads" accounted for all of the example dealership's form submissions.)
So why is there so much disparity between how we measure conversions and how other, less scrupulous (or ill-informed) members of the digital marketing community engage in this process? It all boils down to the fact that Google and these automotive service providers have no incentive to change their ways – and much to gain when you spend inefficiently on AdWords.
By pumping up their numbers and incorporating engagement metrics into the conversion count, both Google and the vendors in question have a powerful tool to entice you into dumping more of your marketing dollars into a faulty and inefficient process that does nothing but waste your budget and bloat their bottom lines. To put it a different way, this business model is built exclusively around the principle of "spending harder, not smarter."
It also doesn't hurt that Google greases the wheel via lucrative backdoor agreements with some of the largest PPC service providers in the industry. Under these clandestine arrangements, the biggest name in the digital world ships substantial kickbacks to vendors based on account growth and sales volume.
Again, performance and the end result for you, the dealership, isn't the driving force behind this process. Instead, arbitrary increases in budgetary spending and new account growth, both of which line the pockets of Google and our less than savory PPC counterparts, are the primary focus of this approach.
What really spurred the creation of this article was a conversation that the PPC experts here at Remora had with Google's AdWords staff. During this discussion, we asked Google for guidance on how to help increase our account performance, specifically in terms of conversions. The first, and only, recommendation offered up by Google was to add engagement metrics into our conversion data to “beef up” our numbers, and not a deep dive into the metrics (or some other similarly legitimate process) like we had expected.
Given what we've covered here thus far, it's pretty obvious right out of the gate that this tactic is not the proper way to go about optimizing your campaign performance and uncovering new and exciting advertising techniques. In fact, all this sort of response does is confirm that certain vendors and Google alike are more than willing to "tweak" your performance metrics in an effort to shift even more profit to their end of the equation.
After speaking so harshly of engagement metrics and their role in bloated or falsified conversion data, you’re probably sitting on the other side of the screen and thinking that the team here at Remora doesn't see much value in this information. While these figures aren’t a legitimate replacement for actual conversions, engagement metrics can help determine the value of the traffic your dealership buys or sources.
Think of it this way: Knowing that a Facebook user spends three more minutes on your website is valuable information to have in your arsenal; just not valuable enough to sell a car.
The reality of the situation is that engagement metrics only have value when determining the quality of your website traffic. Knowing that traffic from TrueCar brings more conversions and page views, on average, to your dealership than say Autotrader is vital info that you need when determining where you want to continue to spend your marketing budget.
Conversion metrics, on the other hand, help you determine the effectiveness of your digital efforts – and therein lies the difference. Conversions are a measurable tool of performance, while engagement metrics show digital marketing quality and which clicks or visits are better than others.
Once you start viewing engagement metrics and conversions from this perspective, it doesn't take long to understand why we place such an emphasis on educating and enriching dealerships in regard to metrics, in addition to shining a light on tactics that do nothing more than siphon away your precious marketing dollars.