Cash For Clunkers is the "Perfect Storm" for Search Advertising

By Tad Miller | Aug 11, 2009
More Articles by Tad

Almost no one predicted the wild success of the government car scrappage program known as “Cash for Clunkers”, myself included.  I actually thought it was too restrictive in that your car has to be worth less than $4,500 to qualify for a trade in.  WRONG!  We are a nation that holds onto old cars way too long and the recession has just exacerbated that.

We have managed the pay per click advertising of an automaker for almost two and a half years and have never seen anything like the surge of searches witnessed in the last three weeks.  “Cash for Clunkers” wasn’t even an idea a few months ago, much less a keyword that someone would type into a search engine.  Little did we know, that keyword was going to increase in searches more than 1000 times over in days.

Initially before the program started, OEM Auto manufacturer sites were the only advertisers aggressively playing in the Cash for Clunkers space.  But, as the day for the program to begin grew closer almost every local dealership in the country that had PPC accounts were advertising locally on Cash for Clunkers keywords.  Not to mention third party lead aggregators and auto review sites.  This coincided with the explosion in search traffic from auto shoppers.

At the same time, hundreds, if not thousands of articles about Cash for Clunkers were being posted on Newspaper, Magazine, Automotive and Blog websites.  Many of these sites participate in the Google Adsense program allowing Google to place it’s ads on the pages of those sites whenever the text of their content matched the Cash for Clunkers keywords PPC advertisers had selected.

All of the following created a “Perfect Storm” of search activity that we think has never been seen before in the PPC automotive space:

  • The combination of almost every auto manufacturer, every local auto dealer and every other automotive website that tries to generate leads for auto sales competing on the same group of keywords;
  • The overwhelming amount of content generated that triggered PPC Content Network Ads;
  • The overwhelming demand from the public that put off car purchases because of the recession; and
  • Most importantly – The sense of urgency created when news that the CARS program was running out of Cash and would only last until Midnight July 31The uncertainty of both the House of Representatives and the Senate extending the program created even more urgency.

The benefits of the program to automakers and the environment aside there have been some big winners that seem to be missed in media coverage about Cash For Clunkers.  The biggest winners apart from the automotive industry are:

  • The Search Engines – Especially Google.  There have been significant drops in automotive search traffic for the last year.  Cash for Clunkers more than likely saved some jobs at the search engines in their automotive advertising sections.  Cost Per Click Bids on Cash for Clunkers surged upwards with the surge in clicks.  Even more important, searchers began searching for automotive brands again. Brand searches have been way down since last September.
  • Web Design Agencies: Landing Page design and banner ad design specific to Cash for Clunkers for OEM Auto websites and local dealer websites were a huge cash boon.
  • Online Ad Agencies – Traffic related to Cash for Clunkers has been highly productive and advertisers really ramped up their ad spend.  Most agencies get paid on the percentage of the ad spend…
  • Traditional media: TV, Radio and Newspapers.  Ad spend on these mediums has been way down and Cash for Clunkers may have reversed that for some.

The question now is how long will it last?

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