Google has created a new ad format, called 'vehicle ads', that shows Google search users nearby cars for sale.
The new ad format has launched in the US and aims to help car sellers reach potential buyers more easily via Search from a smartphone. Google plans to roll the format out in more countries soon.
Google launched the ad format at the National Automobile Dealers Association last week. Google commissioned research firm Kantar for its 2021 GearShift study and found that 16% of new car buyers bought their car online, up from 1% three years ago.
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The pandemic drastically changed car-buying behavior due to stay at home orders and triggered a massive shift to online shopping for almost everything, which forced retailers to go digital. New and used vehicle sales were also thrown into turmoil as demand initially dropped, and now the auto industry is struggling to finish off vehicles due to the chip shortage.
A 2021 McKinsey study of the auto market found older buyers were less inclined to want to visit car dealerships and now consider online buying as a substitute for visiting dealers.
Google explains that car buyers who look for a 2019 SUV from Search will see a picture, location, make, price and mileage of vehicles that are either nearby or can be delivered. Sellers, meanwhile, get details about potential leads.
"If someone searches for a 2019 SUV, they'll see several vehicle options they can either purchase nearby or get delivered — along with pictures and inventory information like location, make, model, price and mileage," says Stephanie Shum, director of product management for Google Retail & Vertical Ads.
Once a potential buyer selects a car, the ad directs them to the vehicle description page on the dealer's website where they can fill out their contact details or get the dealership's contact information. Dealers can then select actions they'd like to measure the contact with, such as leads and store visits, and assign a value to them, Shum explains.
The vehicle ad format is for dealerships and not for private sellers or auto brokers, according to Google, which describes it as a "performance-focused, lower funnel ad format" for auto-advertisers to promote only non-commercial passenger vehicles, such as cars or pickup trucks.
"Vehicle ads support both new and used vehicle inventory from dealer or retailer stock. Vehicle ads from private sellers, individuals, or auto brokers are not permitted," it notes.
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Also not permitted for promotion via vehicle ads are recreational vehicles, commercial vehicles, farm vehicles, buses, two-wheelers, trains, boats, airplanes, or outdoor utility vehicles, Google notes.
Dealerships need to create an inventory data feed and connect to the Google Merchant Center.
Google claims dealers who used vehicle ads with existing Search campaigns saw a 25% increase in conversion rates during the beta phase.
While Google hasn't said which markets vehicle ads will launch in next, it does advise auto advertisers in Canada and Australia to contact their Google representative if they're interested in participating. US dealers also need to contact Google directly to express interest.