The Cost of NOT Ranking at the Top of Google Search Results

I use Google in the title, because they are the eight hundred pound search engine, but you can substitute Yahoo, Bing, etc. if you desire.  It’s difficult for dealers to gauge ROI on many of their digital marketing services, especially their SEM/PPC campaigns.  In this article, I will attempt to analyze the missed ROI from not ranking at the top of Google search results.

Although generating leads is the number one objective for digital marketers, the initial goal for PPC is to control impression share and drive more website traffic.  Pay per Click marketing has almost equaled organic ranking as the main component that drives traffic and you should be dominating both to succeed.  

So let’s break this down, factually. There are five billion searches performed on Google alone and 95% of all clicks happen on the first page of the Google search results. But being listed on page one is just not good enough these days.  65% of all clicks come from the top three Google search results, also considered as “top of the fold.”  There are several factors that determine your ability to actually rank in the top three results.  I will cover those in the next article (what a cliff hanger).

To determine your missed ROI, I’ve used one of my previous campaigns that consisted of 50 keywords of a popular domestic brand in a popular city.  That campaign generated 500,000 Google search results in a month. Depending on a variety of factors, the average click-thru-rate from page one results could be 2% – 35%.  For this example, we will use a conservative CTR of 5%. That math equates to 25,000 possible lost visitors.  If we use google analytics website data to determine the actual conversion rate of those visitors at 5%, we would come to a conversion amount of 1,250 leads.  Average dealer’s website conversion rate, for leads to appointments, should be 15%. Using those calculations, we should expect 187 qualified opportunities. Using the 50% show and 50% show-to-purchase averages, we would expect 93 shows and 46 sales.  You can plug in your own profit per vehicle amount, but if you average $1,000 on a new/used ratio, the amount would total $46,000. (avg of $2,000 per vehicle is $92,000).

Using my formula, the cost of NOT ranking at the top of the Google search results would conservatively equal $46,000 in lost revenue per month or $552,000 annually.  So if your digital marketing agency is not creating a strategy to have you rank in the top positions, with relevant and engaging ads, you’re not only wasting the current SEM/PPC monthly spend, but COSTING your dealership thousands of dollars.

The key takeaway here is that although social media is increasingly important, and SEO is always a key factor, failure to have an amazing Pay per Click/SEM strategy could be costing you website traffic, leads and sales.

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