To prevent their organic results from being diluted, brands must invest in paid search. However, for most Auto brands, doing so usually means bidding against themselves.
Two-thirds of Index brands have their OEM and Tier 2/dealer sites competing against each other for their own brand search terms, according to L2’s Cannibalizing Search report. Examining paid search results for the brand terms of 39 Auto brands, the study finds that 39% of results were for OEM sites, while 44% were for the brand’s dealer and Tier 2 sites. OEMs and their dealerships essentially cannibalize each other’s search traffic, bidding up brand term prices in the process. For brands competing, the average Cost Per Click was 15% higher.
For paid search at the model level (i.e. “Ford Fusion”) the situation is even worse. The study finds that 30 of 36 Auto brands compete against themselves for the same model terms. Auto brands offer a stark example of how brands need to develop SEM strategies that work efficiently for both the brand and its retail partners.