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LOS ANGELES — Google is poised to expand its online car-shopping service to dealers throughout California and enter more states, sources say.
Dealers in the San Francisco Bay area have tested the service since last summer. Consumers can browse dealers’ inventory and check vehicle prices without leaving Google search pages.
By expanding the pilot, Google is signaling its intention to be a more significant force in online auto shopping, a crucial part of auto retailing. More than 90 percent of car buyers begin their shopping online, and two of every three visitors to a typical dealership’s Web site arrive from a Google search page.
But some dealership general managers who have participated in the pilot give it mixed reviews. For instance, they say, Google shoppers can call dealerships anonymously, which limits the usefulness of a Google sales lead. And the Google service limits how many times a dealer can follow up with a potential customer.
Google’s service also lacks original content found on other shopping sites, such as auto reviews.
The expansion’s timing is undisclosed, but the sources told Automotive News that Google is nearing a statewide rollout in California. Other states will follow soon, they said.
Dale Pollak, founder of vAuto, a dealer inventory-management system vendor, said Google executive Michael Rose described for dealers how the Google service works and took questions during the 2013 Digital Marketing Strategies Conference on Feb. 7 in Orlando. Pollak said Rose made it clear that Google was preparing to expand the service beyond the San Francisco test. vAuto is owned by AutoTrader.com, which competes with Google for Internet sales leads.
“Clearly, he was there to announce that it was coming soon,” Pollak said. Rose’s title at Google is industry expert, auto vertical.
Another attendee who asked not to be identified confirmed that Rose asserted that California was next for the Google rollout.
A third source close to the program said Google is ready for the expansion in California and that other states would follow.
A Google spokeswoman said: “This experience is designed to help connect users who are looking to purchase a car directly with the dealers who can get them the cars that they want. We have nothing further to announce at this time.”
Dealers who sign on with Google can list their new-vehicle inventories with no upfront or monthly fees. They pay only for leads, or when shoppers ask for vehicle information from the store and give an e-mail address, phone number or other contact information.
Say a shopper searches for “Honda Accord San Francisco” on Google. A box appears high on the crucial first page of search results containing a picture of a Honda Accord and a link marked “Honda Accord — Inventory on Google.”
Clicking the link opens a page with a detailed list of vehicles available at local dealerships.
The Google service’s per-lead cost is determined by bid, starting at around a $10 minimum. Dealers pay the bid amount when they receive a request from a customer to be contacted with a price quote. The amount of the bids only help determine the pool of dealers from which shoppers can request price quotes.
Mike Shum, general manager of Toyota Sunnyvale in California and part of Google’s pilot program, is enthusiastic about the service. His store averages about 200 monthly leads, and the volume and quality of those leads improve every month, he says. About 10 percent of his store’s 350 average monthly new-car sales originate from the Google service.
Shum says his store pays about $22 per lead for Toyota cars and $26 for trucks and crossovers, making Google leads more expensive than the roughly $20 he pays for most other lead providers. Shum praises the bid system used to determine lead costs, which he says allows him to adjust sales plans immediately.
Another big appeal: the Google brand.
“Everybody is going there already,” Shum says. “They’re doing their searches there; they’re using them to find our Web sites, and that drives a lot of traffic to us.”
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