Response from vAuto Founder, Dale Pollak
vAuto's Founder, Dale Pollak asked me to post this response:
Jon,
As you probably know AutoTrader purchased vAuto a little over a year ago. In spite of the fact that I continue my passion with vAuto and now AutoTrader, I will never say something that I don’t believe to be true in my heart of hearts. Please consider my following comments in that respect. The first thing I want to say is that there is absolutely no justification for arrogance on anyone’s part, vendor/partner or dealer. All of us should consider ourselves students and have humility and respect for different perspectives.
I’m a firm believer that the classified format of advertising is and always has been the most effective medium for used car shoppers. Even before the internet, when dealers advertised used vehicles, they always found the best results in the classified format. This is because used car shoppers generally have an idea of what type of vehicle they want to purchase, i.e. minivan, car, truck, sports car, etc., but know that there are many types, at many places with many different prices. The classified format allows a used car shopper with such a mindset to efficiently synthesize a lot of information and filter it to a specific set of vehicles that best meet their needs and desires.
I don’t believe that key word searches effectively achieve this objective from the perspective of a used car shopper. If you think so, just try entering something like “sport utility” or even “Chevy Tahoe, Chicago” into a search engine. This type of research will return a long list of organic and paid sites and landing pages, but very few, if any vehicles that can be critically analyzed and filtered into a short list. From my perspective, this is the unsatisfying experience that used car shoppers using search engines come to find.
With this premise, I continue to believe that online classified venues such as AutoTrader and Cars.com represent the best shopping experience for used car buyers. The facts seem to support this conclusion as there are roughly 16 million unique shoppers every month on AutoTrader, and something comparable on Cars.com. Moreover, more dealers spend more of their money on advertising their cars on these sites than on any other single medium. I’m sure that you can’t fool that many dealers if it didn’t really produce results.
The question however, is how you define results. I understand that dealers have a high regard for advertising investments that produce perfectly identifiable results. For example, when you buy key words on a search engine, you can exactly measure the number of impressions and/or the number of clicks. If you lined up all of the possible used vehicle advertising products on a continuum from most to least attributable, online classified sites would probably be on the end of the continuum that is least attributable. I believe that this is the primary characteristic of online classified advertising that causes dealers to mistakenly conclude that this medium is not worthy of their investment. In other words, if the results can’t be directly measured, it is often thought to be less worthy than another medium that is highly measurable. The mistake, however, is that the mere fact that a certain type of medium is attributable does not say enough about its worthiness to be meaningful.
The fact is that most shoppers on classified advertising sites don’t submit a trackable email, but rather just simply call or show up at your dealership. It is not in the shopper’s interest to identify the source which brought them to the dealership, because that would reveal more information to the sales person than that which is in the shoppers’ best interest. Notwithstanding this fact, there are a fair number of people who call or show up and ask if a specific vehicle is still in stock, and that is a tell-tale indication that they found your vehicle online and for one reason or another, find it to be preferable.
This belief about the fact that people most often call or just show up is more than an assumption on my part. I know this to be true because there is a mathematical correlation between the number of Vehicle Detail Pages (VDPs) a dealership receives and how many used vehicles it sells. For example, dealerships that receive approximately 10,000 VDPs a month will almost always sell 100+ used retail units. I see the consistent correlation between VDPs and used vehicle sales every day all across the country.
Further, I’ve seen many dealers get angry or frustrated with AutoTrader, cancel their subscription, see their VDPs disappear and invariably, their sales decline. This experience is so common across the AutoTrader advertising consultant field force that they know that it will happen even before it occurs. The conveyance of this warning, I’m afraid, is often perceived as arrogance, although that is not what is often intended. Simply stated, the overwhelming vast majority of dealers that give up on online classified used vehicle advertising, return having watched their used vehicle sales decline.
For what it’s worth, I think the most important indication of used vehicle departmental performance is the percentage of registrations in the marketplace relative to your competitors. I would be willing to stake my reputation on the prediction that any dealer who ceases to advertise their used vehicle on a major online classified advertising site will watch their used vehicle registration penetration decline as a result of that decision.
