What is a 3rd Party Lead Exactly? Let's come to a conclusion.

[Jeff Kershner]

3rd Party Lead VS Classified Vehicle Listing Lead - Which is it?

We NEED, as an industry, to CLARIFY what exactly is a 3rd Party Lead.

I understand any lead from a 3rd Party no matter what kind of website or service could be categorized as a 3rd Party Lead, but lets be honest, it's not exactly how we do it. The term "3rd Party Lead" is loosely used in our industry. It's obvious to me there is (and has been) a tremendous gray area when describing a "type" of lead.

What exactly is included under the 3rd Party Lead umbrella?

I'll share my opinion on what I believe a 3rd Party Leads to be and you can contribute and share your opinion below or over in the forums where this conversation was originally posted. Agree or disagree, but as a community here on DealerRefresh - Lets lock down EXACTLY what a 3rd Party Lead is.

Here's how I classify 3rd Party Leads...

A 3rd Party Lead is a lead that is NOT associated to a particular vehicle in your inventory (new or used) that you (the dealer) purchases through a lead aggregator.


3rd Party Lead aggregator service includes:

• AutoUSA
• AutoBytel
• Dealix
• Edmunds.com
• TrueCar
• Detroit Trading
• Cars.com - New Car Leads Plus (I believe it's still called this)
• Finance and 2nd Chance leads from services such as Roadloans, BlueSky ect.
• OEM leads might also be included in this category since several resell these leads to their dealer body.

Most 3rd Party Leads are a lead for a New vehicle, and again, are not associated to a particular vehicle in your dealers current inventory. They typically derive from a "get your price quote" call-to-action where a customer chooses or configures a Year, Make, Model, Trim, Options and such.

Classified Vehicle Listing Lead:

A Classified Vehicle Listing Lead is a lead that IS associated to a particular new or used vehicle in your dealers current inventory. The customer is contacting you about a particular vehicle you have listed on a classified listing website - usually wanting to know if you still have that particular vehicle in stock.


Classified Vehicle Listing Lead services include:

• AutoTrader.com
• Cars.com
• eBay
• Craigslist
• CarGurus.com

…to name a few

*I don't count a lead from a Vehicle Listing Service like AutoTrader.com or CarGurus as a 3rd Party Lead. This is a Classified listing lead.

There are several reasons behind the need to clarify just what a 3rd Party Lead is. Many times discussions happen around marketing budgets AND a simple question like "How much do you send on 3rd Party Leads?" can receive two very different answers depending on what you determine to be a 3rd Party Lead.

"What is your Show Rate and Closing Ratio on 3rd Party Leads?" - Your show rate and closing ratio on 3rd Party Leads (as I have clarified above) shouldn't necessarily be rolled-up with the performance of your Classified Vehicle Listing Leads. Wouldn't you agree?

When asked the questions above, how do you answer and determine the difference between a 3rd Party Lead and Classified Vehicle Listing Lead, or do you roll them up as one?

 

[Alex Snyder]

Re: What is a 3rd Party Lead Exactly? Lets come to a conclusion.

I look at it from the perspective of control (do you own the property or not):

1st party = any lead or call coming from your property (your website) including tools on your website like Black Book or Hooklogic. Things that come from places where you're the landlord.

3rd party = any lead or call from anywhere but your website. A medium you have no control over. When you're just a renter.

 

[Jeff Kershner]

Re: What is a 3rd Party Lead Exactly? Lets come to a conclusion.

I look at it from the perspective of control (do you own the property or not):

1st party = any lead or call coming from your property (your website) including tools on your website like Black Book or Hooklogic. Things that come from places where you're the landlord.

3rd party = any lead or call from anywhere but your website. A medium you have no control over. When you're just a renter.

My point being - is the way you look at it too "broad"?

If someone said, "Alex - you mentioned that you're getting out of all 3rd Party Leads, can you please clarify", would you include Cars.com or AutoTrader.com in the category of 3rd party leads when answering this question?

 

[GrantG]

Re: What is a 3rd Party Lead Exactly? Lets come to a conclusion.

My point being - is the way you look at it too "broad"?

If someone said, "Alex - you mentioned that you're getting out of all 3rd Party Leads, can you please clarify", would you include Cars.com or AutoTrader.com in the category of 3rd party leads when answering this question?

I think both Alex and Jeff are right. I think of 3rd party as a lead that I have done nothing to get buy write a check. The provider brings the customer to me (ie: Dealix, AutoUSA, True Car, etc).

Classified leads are more of a 2nd Party lead. We put the time in to pictures, descriptions, etc. and now are waiting for the provided to bring home the bacon...

 

[eddyshaf]

Re: What is a 3rd Party Lead Exactly? Lets come to a conclusion.

I look at it from the perspective of control (do you own the property or not):

1st party = any lead or call coming from your property (your website) including tools on your website like Black Book or Hooklogic. Things that come from places where you're the landlord.

3rd party = any lead or call from anywhere but your website. A medium you have no control over. When you're just a renter.

I think that there is a third classification that Jeff is trying to get at - what I refer to as "2nd party" leads for lack of a better term.

Totally agree with your definition of 1st party leads, Alex, with a qualifier to include OEM websites...perhaps these should be in a category of their own?

Here is what I think are the categories:

First Party Leads are generated from website properties directly controlled by the dealership or OEM. Pre-owned inventory based leads are the most common type in this section. Also included are new car inventory leads, credit applications, trade evaluations, chat leads, payment pre-qualifiers and incentive based leads.

Second Party Leads are new and pre-owned inventory generated leads from subscription based advertiser websites. These are always connected to one specific piece of inventory and will always include a VIN and/or Stock#.

Third Party Leads are leads aggregated from various websites such as MSN Autos, Edmunds, AOL Autos, Cars.com and Kelley Blue Book. These are new car Leads, are never VIN or Stock# specific and are generally the result of prospects using online vehicle configurators. Leads generated in this category are sold to an exchange where various aggregators bid for the right to resell the information to dealerships.

 

[Sarah Udelhofen]

Re: What is a 3rd Party Lead Exactly? Lets come to a conclusion.

My point being - is the way you look at it too "broad"?

If someone said, "Alex - you mentioned that you're getting out of all 3rd Party Leads, can you please clarify", would you include Cars.com or AutoTrader.com in the category of 3rd party leads when answering this question?

I would have to agree with you, I consider a 3rd party lead to be from Autobytel, AutoUSA, Dealix....the list goes on. I would take a classified listing with my specific inventory over a 3rd party lead any day. Edmunds just came out with a new car "Price Promise" program that lists your specific inventory and pricing (so far it's been a big success & it's only been a couple of weeks). I do separate the "3rd party" from "Classified Listings" when I'm doing reporting. It is a broad term that we just throw around there but I've always personally separated the two.

 

[AaronSchinke]

Re: What is a 3rd Party Lead Exactly? Lets come to a conclusion.

I would have to agree with you, I consider a 3rd party lead to be from Autobytel, AutoUSA, Dealix....the list goes on. I would take a classified listing with my specific inventory over a 3rd party lead any day. Edmunds just came out with a new car "Price Promise" program that lists your specific inventory and pricing (so far it's been a big success & it's only been a couple of weeks). I do separate the "3rd party" from "Classified Listings" when I'm doing reporting. It is a broad term that we just throw around there but I've always personally separated the two.

Obviously this comes down to some semantics, but 3rd party is traditionally meant to identify the source, rather than the type. So a third party lead would be ANY lead coming from a source other than the dealership, regardless of type. This is clearly something that isn't totally accepted which why this thread is so valuable.

We've (DealerFire) recently run a huge "BREAK FREE from 3rd party leads" campaign and it's interesting to know it might be a little confusing given a different context.

Anyway, for my 2 cents, 1st party or 3rd party define the source - stock / inventory specific vs new car define a type. You can get an inventory specific lead from a 3rd party lead provider (including autotrader, cars). The 'party' basically defines who is working to get the lead. Why make it any more confusing than it needs to be?

 

[Sarah Udelhofen]

Re: What is a 3rd Party Lead Exactly? Lets come to a conclusion.

Obviously this comes down to some semantics, but 3rd party is traditionally meant to identify the source, rather than the type. So a third party lead would be ANY lead coming from a source other than the dealership, regardless of type. This is clearly something that isn't totally accepted which why this thread is so valuable.

We've (DealerFire) recently run a huge "BREAK FREE from 3rd party leads" campaign and it's interesting to know it might be a little confusing given a different context.

Anyway, for my 2 cents, 1st party or 3rd party define the source - stock / inventory specific vs new car define a type. You can get an inventory specific lead from a 3rd party lead provider (including autotrader, cars). The 'party' basically defines who is working to get the lead. Why make it any more confusing than it needs to be?

I think it really depends on what you are doing with the data. I consider most of our 3rd party leads just generic I want a 2013 Toyota Camry, Of course all of the other websites that you are collecting leads from that our not your site are still considered 3rd party but I think the quality varies. Even on 3rd party sites there are things you can do to maximize your conversions by making sure your inventory, pricing, and listings are all on point. I usually do break them into two categories myself personally but I think everyone has their own way of doing things.

 

[Alex Snyder]

Re: What is a 3rd Party Lead Exactly? Lets come to a conclusion.

Obviously this comes down to some semantics, but 3rd party is traditionally meant to identify the source, rather than the type. So a third party lead would be ANY lead coming from a source other than the dealership, regardless of type. This is clearly something that isn't totally accepted which why this thread is so valuable.

True.

If I recall correctly "first party lead" was just a marketing term that came up from a few website companies years ago .....brilliant marketing..... we're still debating the slogan today

 

[Jeff Kershner]

I thought this would bring about more conversation.

I completely understand that any lead provider outside of your own grown leads (first party leads) would be considered a 3rd Party -- lead. BUT too often questions around budgets and marketing are asked and not clarified exactly what they mean by "3rd Party Lead". If this thread does anything, I hope it serves as a reminder to ask that person referencing 3rd Party leads what exactly they mean. Are they including classified listing sites into the mix or just leads they purchase that are not associated to a particular vehicle in your inventory. Services like AutoUSA, AutoBytel and Dealix.