Some managers of car dealerships are asking why their search traffic is down when compared to previous years, and some ask why this traffic is down when compared to last summer. They seem to share the notion that there's a set amount of search traffic to capture every month, and year-to-year. It's important to acknowledge that search traffic fluctuates every month, varies over the years, and that this traffic does not exist in a vacuum.
Search Volume Over Time & Sales
Search volume (the number of searches for a given phrase) changes throughout a year:
The above chart shows more search volume for "ford los angeles" in the summer months. Compare that to overall car sales (below chart from EconBrowser.com):
And we see a correlation between number of sales and search volume, though not perfect:
Note that the above search volume is from the phrase "ford los angeles" and the chart is overall U.S. car sales, it also does not take into account other factors that influence the search volume.
What Influences Search Traffic?
So we know there's a relationship between search volume and sales, but we need to address things that can influence the number of queries for a given phrase to understand what car dealers are seeing today.
To show that search volume is influenced by outside factors, lets take a look at Google Trends. Using the example "ford" we see a spike in traffic when something related to a phrase hits traditional or online news outlets.
The spike highlighted above corresponds to the death of Gerald Ford on December 26, 2006. This is a dramatic example of the influence the news has on a search query.
The point of the all this is to show that search volume and traffic is fluid and affected by outside factors, news being just one. On a smaller scale, a dealer's local advertising can affect traffic, or sales and incentives.
The factor currently affecting search traffic for car dealers is the slowing economy. If fewer people are planning on purchasing a car, then fewer people are searching online for vehicles and dealerships. Let's look at another obvious industry being affected by the current economy, then return to what car dealers are facing. With all the news on sub-prime mortgages and foreclosures, and the above demonstration on the news' influence on search volume, you might think that the search volume for "real estate" is increasing. But it isn't.
While real estate news is heavy, it's heavy with stories on foreclosures and lower sales. Search traffic is down because people aren't looking for new homes, as shown by the real estate sales chart below from Calculated Risk. Compare the dip in past recessions to the massive decline currently happening.
Of course, the economic conditions affecting home sales and real estate search traffic is affecting the automotive industry as well. Take a look at the trend for "new car" in the United States.
We can drill down further and see how the historical search volume is for this phrase within a given state, let's use California as an example.
There's no blip on the news radar, but the search volume is clearly on a negative trend since 2004.
Capture Today's Traffic, Not Last Year's
So given the declining search traffic, managers at dealerships need to be careful evaluating their performance by comparing current search traffic statistics with previous months and years. They should be gauging success by calculating how much of the existing search traffic they are capturing, and how well they convert these users to customers. This involves pushing forward with both paid and organic search programs, as well as bringing website visitors into the dealership through creativity and setting a dealership apart from the others in the community.
When search traffic for local car sales is down, it's down for all the dealerships. Competition for the remaining searchers is likely to escalate, making it increasingly important to track your success, and that of your competitors, appropriately.
