Cost Per VDP/Lead...Do you include your CO-OP Dollars in your calculations?

[Chris Slaydon]

We have had a few internal debates, and I have spoken with many, many people regarding this subject...and the opinions vary wildly.

When you calculate your cost per VDP/Lead or do any other analysis, do you factor in your CO-OP reimbursement in those figures?


On one side of the fence you have your gross spend and it is an apples to apples comparison across all your digital platforms. On the other side of the fence, a lot of decisions on different marketing packages are based heavily on CO-OP reimbursement dollars of that package so your net spend is very important

I tend to lean more towards a net spend figure since CO-OP dollars greatly influence package subscriptions and therefore must be included in any cost analysis.


Thoughts?

 

[Bill Simmons]

I figure the costs on the gross amount spent, not the net after COOP. You may be receiving COOP on one listing service ant not another. So comparing the cost per VDP on the gross amount spent puts all of the services on a level playing field. In theory, that more expensive package should generate more VDP's, right? By comparing the cost per VDP with the upgrade versus cost per VDP without it, you can see if you are paying more per VDP and if the package upgrade was worth it IMO.

 

[Chris Slaydon]

Bill,

From a macro perspective that makes sense, but that is considering no COOP or relatively equal COOP spend across medians you are comparing your cost per VDP/Lead/ etc.

The problem is a lot, if not most managers/directors make decisions on upgrading packages dependent upon COOP dollars. If it is a key decision factor, then shouldn't it be included in analysis? Because those extra VDPs/leads/etc would not exist for you if you would not have increased your package, and your package would not have been increased without it being funded by your COOP dollars.

My real life example is that I spend over $30k per month with Autotrader for my stores, yet the net is less than $9k in spend. That drives my Cost per VDP from the $1.30 - $1.40 range down to .35-.40 cent range. My Gross cost is still really good, but the packages make it tremendous and its Free Money from COOP dollars. Those packages would not have been purchased unless the COOP eligibility was there. So don't I have to consider that in comparison to what I spend on the other 3rd party sites?