Auto Warranty Review Website
An auto warranty review website that utilizes third parties to review companies that offer vehicle service contracts (VSC). Third party experts are paid for a thorough review and do not have any affiliate with the company they review nor the company that is showcasing the review.
The company receives revenue by producing leads to VCS companies. The challenge in the market comes down to four major hurdles:
- Advertising Cost
- Legal Constraints
- Product Misconceptions
The VSC space is very competitive. We found well over 300 companies fighting for market share.
Most of these companies are affiliates selling the same product which creates even more of a challenge for search marketing.
Often you will see four ads for four different companies selling the same contract.
Google Keyword Planner forecast a monthly search volume of 1MM for the terms auto warranty, car warranty, and extended auto warranty. The average cost per click is $18.90.
If you run your ads only during business hours, that number is much higher. Around $26 per click for top positions.
With an average CTR of 3.4%, you can expect around 28k clicks per month. This will cost about $529k
The unique CVR (Conversion Rate) for the industry is around 12% (quote requests). This is for website traffic (clicks) divided by the aggregate of form submissions, chats, and phone calls.
Every state has different rules and regulations for this product. Some states require the businesses to be set up a certain way. Other are pretty unregulated.
Consumers have misconceptions for what a VSC contract is for. Most consumers believe the warranty should cover vehicles with pre-existing issues.
In fact, every contract stipulates pre-existing repairs are not covered. This complicates the review process.
We found most of the complaints come from people who vehicle was not covered due to a pre-existing repair. This is easily proved due to the repair companies keep records of when a repair is needed.
Findings From The Marketing Audit