How Smart Bidding Improves Campaign Reach Efficiency

Historically, brand and manufacturer terms were too broad for dealerships to use in paid search campaigns. Search volume and cost per conversion were really high for terms like “Honda” or “Ford f-150”, and they can easily eat up a dealer’s entire budget.

It’s why we educated dealers for years to closely follow a micro-moment strategy. Back then, dealers needed to focus their spend on long tail search terms that showed more intent to buy, such as “Honda dealer Portland” or “Ford f-150 for sale near me.” The problem with only focusing on low-funnel, long tail keywords is that there are a fair amount of buyers who don’t search that way anymore. As search engines have gotten more sophisticated, they understand that some users who are simply typing in “Honda” are actually searching for a Honda dealer near them. We joke internally that searchers have gotten lazy, but the reality is, search engines have gotten more sophisticated, allowing users to type less and get more. 

Just as search engines are getting smarter, so are the advertising platforms. They are using machine learning to identify in-market shoppers with systems like Google’s Smart Bidding so that dealers can target in-market shoppers regardless of the keywords they use.  Smart Bidding’s ability to identify in-market shoppers versus tire kickers and its efficient budget utilization has also allowed dealerships to expand their geo-targeting footprint and keyword coverage, all within the same budget.

Let’s talk about what this looks like in practice. Historically, we’d target a specific keyword like “2021 Jeep Wrangler Rubicon” and serve ads to as many users who searched that term as possible. Now, with Smart bidding, we’re purposefully not showing ads to some users who search “2021 Jeep Wrangler Rubicon” because we know more about their shopping history and intent.

For example, one of the users who searched that term may be a 16-year-old looking for cool pictures of the new Rubicon, while another user may be an in-market shopper who’s ready to buy this week. Smart Bidding allows us to purposefully not show ads to users like the 16-year-old who is not going to buy anytime soon. Similarly, for a term like “Jeep Dealer Portland”, one user may be a software salesman trying to get the dealership to buy new payroll software, while another user may be an in-market shopper looking to test drive a new Jeep today. In this example, we’d prioritize serving ads to the soon to be test driver over the salesman.

Because we’re able to save budget by not spending on clicks that won’t generate leads, we’re able to expand our targeting footprint in many instances. And expanding our footprint opens up the door to generate even more conversions. Just remember that you want to capitalize on all of the available opportunities in your own backyard first as it is still true that the further away from the dealership you go, the less you sell while the cost per conversion goes up. 

Using Smart Bidding, we’ve seen some dealerships have been able to increase their geo-targeting by up to 20% without increasing budget.

What’s Next?

Are you looking for a partner to help your dealership leverage Smart Bidding? With a year of automotive Smart Bidding experience under our belt, a unique account structure, and premium conversion tracking, Adpearance has been able to generate 37% more conversions at two-thirds of the cost per lead for our auto clients. Reach out for a free digital analysis to get started.