I'll share some basic info...

In the last 30 days:

CarsDirect.com sent us 1500+ visitors...
AutoTrader.com sent us 600+ visitors...
Our blog sent us 400+ visitors...

If you're not familiar w/CarsDirect - they're cheap.

AutoTrader isn't...

Our blog is free...

[the C.R.'s for the 1st two are nearly the same; blog is obviously lower]

Where would you spend your time & money...?

I could only find the table in the print zine no luck online,
looks like the table is a breakdown of units and monthly overpayment over a five year period. Maybe you could email Paul if you don't have the print version.

Brian,

Is my computer busted or what- I don't see "the table."

Where is he getting that number ($7.74) from?

"It turns out that a dollar saved actually has the same effect as earning $7.74 in gross profit.

The below calculations are based on NADA-published 2006 U.S. dealer averages (as published in Auto Executive Magazine, March 2007. The table to the right summarizes the actual effort required to pay for excessive DMS charges:"

Brian, I believe Mr. Gillrie's statement is regarding "hardware & systems" versus autotrader.com which is strictly "advertising".

Our philosophy is that all sources of advertising are measured and tracked as accurately as we possibly can (really, we do try and track everything) and they stand or fall on the merits of the ROI generated from them. Last month we had 2 leads from autotrader.com and neither of them bought yet we sold about 22 from our website alone.

Back to the blitz issue with autotrader, our dealership realizes the discounts of these "sales blitzes" dog & pony shows they roll into town every year with but I gotta say that even w/the offers they had, we weren't about to spend any additional funds because the ROI from them has dropped so significantly in the past couple of years.

I would encourage you to open the June copy of Digital dealer or paste the link below
Mr. Gillrie has a relevant article on overpaying for technology
has more to do with DMS prices but I found this compelling piece of info....
"your intuition tells you that a dollar saved has exactly the same effect on the bottom line as earning an extra dollar of gross profit. Your intuition, in this case, would be very wrong. As you can see in the chart below, the reality is that it takes a lot more than a dollar of gross to pay for a dollar of computer expense. It turns out that a dollar saved actually has the same effect as earning $7.74 in gross profit."

hmmmm?

We are in a performance based industry - if we don't perform and sell cars, we don't have jobs. Guess what? That applies to our vendors as well. If your product does not perform - why should we keep you? When the cost of AutoTrader is 3 times more than other vendors that provide the same if not more page views, email leads, phone calls, and sales, how do you justify your cost? When we measure the ROI of all vendors, and AutoTrader is not nearly as good as many of our other partners, and comes at a significantly higher cost, why should we keep them? Bottom line for me is that while AutoTrader has some exposure in the market, they are pricing themselves out of the market against their competition. We are not getting added value that is justified by the cost. In the end - it is business - ALL of us must perform!

Amy,

Is that grape or fruit punch? You enjoy drinking that Kool-Aid, but please don't offer me any. I can't stand that stuff.

Phil is right. There are many, many, many alternatives to AutoTrader right now. It isn't about a captive audience on ATC, which is a farce of a thought anyway, it is about measuring ROI right now. Are your dealers who are spending over $20,000 a month making over $100,000 in profit with ATC that same month? Or are they turning maybe $5,000 to $10,000 in profit once the bill is paid? With all the forms and places of advertising online, you have to provide a much larger ROI if you're going to charge a much larger price.

"There is a reason we are so expensive. we are worth it..."

4 or 5 years ago, sure I'm with you on that, I'm sure others will agree. In 2008 (now) there are many alternatives out there that can generate almost the same local audience wide exposure to our used and especially new inventories.

If our ROI kept up with the percentages of rate increase from autotrader this would be a moot point but as countless of us have said in the past, it hasn't.

We had a "blitz" visit a couple months ago as another mentioned it was a little refreshing to have a visit from a rep that actually knew the product, our local rep seems clueless to the automotive market.

I think if you had several dealers in one area all call to cancel their contracts the same day, in many different locales simultaneously the guys at the top might pay attention and drop their rates? I sort of feel there's a monopoly and I'd like to see more players get into it.

Unfortunately COX Communications is the real culprit and I am sure some anti-trust laws could be challenged in relation to AT and COX's agenda to own every current in the stream.

You guys should take advantage of the blitz team. they are in your market for one week and since they dont have a relationship with you ...like your local rep (hopefully)...the thing they can offer you is incentive to sign today=good deal.

There is a reason we are so expensive. we are worth it. i have dealers in my market paying us well over 20K a month. why? because they see the value & recognize that although we do provide "leads" we also provide the best bang for their buck in reaching in market buyers.

think about it. why would anyone even go to autotrader.com if they arent looking for a car? there are no sports scores, no news, no pictures of beautiful women. the only thing we- autotrader.com- can offer you is that 100% of your dollars go towards advertising to the people who are in the market to buy a car. where is the waste?
Now think about what your store does in direct mail, billboards, tv, radio....where is the waste there?

today the name of the game is minimize your losses.

instead of being upset-like we are trying to take advantage of you - you should consider that we are on the same team. afterall- we are both here to move metal.

...take a look at the amount of people who see your inventory (exposure), respond to your ads (vehicle details-virtual walk arounds), get a map to the store (how many times do you get a map online & NOT show up?), go directly to your site, print out information.....dont discount it. yesterdays showroom traffic is todays internet traffic. you are selling yourself and your dealer short if you do not consider all that we bring to the table.

Ed,
Do you use a post-sale survey to gather marketing data?

Joe

I will take the under...this one played out in the last thread in Nov...

AutoTrader does cost more and we look at the measurement of cost per sale generated by our third party lead providers.

Of course the tracking is where everyone differs...ATC would like us to credit them for xx.x% of the pre-owned walk in traffic that 'must' have been generated by the large number of shoppers who printed our maps/directions. We actually recently created an exit survey for F&I to get a better picture of where our advertising is more effective in driving sales.

Currently, we track every incoming call, incoming email lead etc. and trace back to the source to match up sales...which currently puts our cost per sale at about $400 for the first 5 months of this year. Our CEO would prefer a $300 cost per sale, and we have heard differing opinions of anywhere from $400 to $600 per sale - Opinions?? - email me at [email protected]

We are a Premium Listings dealer in a large metro area market, so perhaps that explains part of the difference...perhaps it is our process that makes the difference...we always factor in process when evaluating a lead provider to make it more equitable - you have to look inside and accept some of the responsibility for poor performance.

Bottom line is that they do cost more and they are heavy handed but we can justify the expense so we continue to use them. I did recently cut back the $900 per month we were spending for 10 additional Spotlights as I cannot detect an appreciable difference in leads with or without them. Several of our other locations just reduced their contracts to Featured Plus at a savings ofabout $3K per rooftop so I am waiting to see if they can improve their cost per sale before jumping ship on the Premium Listings.

I saw the whole dog and pony show a few weeks ago on the new car listings. We already pay them about $8,000 a month between all of our stores, and now they wanted an additional $2,300 per store to list our new inventory. We have a free feed on the new car sites already. I love the word tracks that they use though, very cliche. " I don't know if my boss will let me do this, but I'll deal with that later." "You will be one of the first dealerships in the area to get on board with this, so all the traffic will come your way!" etc.
I am also shopping for a inventory solution and they have a company called CarSpot that I looked into. He came with the ATC blitz reps and must of been new, because he didn't know much about the product. When I asked for a few different things regarding the pricing, it took three weeks and three different people to get me an answer. I ended up contacting my local rep (which is the best part of AutoTrader she's great) and she got back to me with the info the next day. I think that many dealerships are no longer waiting for them to come by with open checkbooks!

"They have obviously maxed out on getting car dealers to pay them "newspaper" money from the used cars and keep trying to grow revs by changing strategy and becoming a "new car search site??"

Bingo!

Except their "new car" search audience is only about a tenth of what their used car audience is. The manuf's have pulled the plug on the majority of the co-op funded programs with autotrader, be they used or new programs and dumped alot of funds into search engine display advertising, so I'm really curious to see what transpires with autotrader in the next 12 months. I think they've finally run out of room.

ATC behaves like OPEC.

Increase prices without regard to the consumers whining until it sees "demand destruction". THEN, it'll mend its ways.

Joe

Blitzes are just another way to juice dealers out of more revenue without adding value. How is it valuable to a dealer to have new reps come to their market they are not even familiar with for a week and then leave and provide no follow up consulting?

How is it valuable to allow the blitz teams give discounts, free products, and tweak contracts that the local rep is not allowed to do?

But guess who gets the aftermath... hmmm the dealer and the local consultant maybe?

RE: Gerald:
You hit the nail on the head ATC is known and was built on a place to search out USED cars hence AutoTrader magazine agreement from the beginning. Why do I need a site like AutoTrader.com to show me NEW cars that all have the same MSRP, look the same, all are close to the same mileage point ect... Thats what the manufacture sites are for. They were pushing this new car thing first a couple years ago by selling New car partnerships priced at the same as USED car programs (that didn't work obviously) since there was no value or "new car shoppers" on the site. They launched new car specials which bombed because it takes 45 minutes to set them up per car. Now they are giving it away for FREE until August when your new bill starts coming for it ...

They have obviously maxed out on getting car dealers to pay them "newspaper" money from the used cars and keep trying to grow revs by changing strategy and becoming a "new car search site??

I think it is best used on used. And if there is heavy competition for your make in your market then yeah maybe a Premium or Partner solution is best, if not just as long as your cars are listed the consumers that want your car at your price and mileage will find it on the site. ATC helped with this with having such great search parameters that narrows the cars down very well.

If this company was public I would be shorting the stock about now. Especially in this economy I'm sure with it being the highest budgeted item for internet advertising it is being looked at hard and with so many alternatives...

I'll take the over.

It went pretty well for us. We were paying around $3000/mo for our listings (I have forgotten what level they call it) and ended up signing up for another $1000/mo, but they were making us "featured" for each of our new car makes (4 in total). While we ended up paying them more, we gained quite a bit more exposure with the featured listings, which was going to increase our sales dramatically with all the exposure.

Unfortunately, we did not enjoy much of an increase in new car inquiries, so we recently cancelled our agreement to go back to our previous agreement. Seems new car buyers are not needing to go to Autotrader to find new vehicles. They are already going to manufacturers websites and the dealers!

Too bad, so sad, bye bye.

So, yeah, we got talked out of another $4-5000 for the same results we were already getting. How could that not be a good thing?

Don't they realize how small this market is? They are a 600 pound gorilla, but their tactics are always the same.

Personally, it is getting old.

Autotrader is spinning "exposure, exposure, exposure". We decided to cut them to a minimum product last year and concentrate on driving traffic to our website. We've married a PPC campaign and have a great company doing organic SEO for us and it has been working out fantastic. The money we saved from not stepping up to the premium listings w/autotrader per month we've put into PPC & organic SEO and have managed to step up our closing ratios from our website inventory on used vehicles tremendously. Autotrader does have some value don't get me wrong, just that their rates vs ROI are insane near us at least. Our Autotrader rep has also informed us that they've experienced alot of indepedent dealerships closing & going out of biz near us in the past 6 months. I know that many independent dealerships are not on w/autotrader or have dropped off w/them in the past year, anyone else noticing this near them?

Brian - I think I'll take the under. I have a feeling people are sick of talking about Autotrader - it may be played out.

I won't be upset if I lose this bet though.....their sales reps really need to leave me alone - they tick me off every time they come around.

Brian - I'll take the over.

This company amazes me. They have tried the Blitz approach with me as well and they tried the free new car listings, etc. Bottom line- I dropped them approximately 3 years ago and my used car business is up! They are not a very friendly crew to work with and they don't really seem to care based on the things I am reading here today. They have tried to get my business back several times over the past couple of years but their pricing structure continues to be outrageous. They know it. They don't have any justification for it and they don't care.

This is going to be a fun thread to watch develop!

Glad to see I'm not the only one.

I'd be happy to advertise more with AT, as long as when MY PAGE LOADS, I get a cut of the click through revenue from the irritating number of ads shared on the same page.

On second thought, no thanks - I am getting more action from cars.com

Chris

It is too bad as this tool has great potential however the management is bent on sucking out the profits and making big promotion rather than making a progressive tool and listen to the client feedback which would give them the direction they need to make it better.

How long was I after them about simple things like the "Pop-ups" and all they wanted to do is deny there was an issue for a long time, they kept sayingpop-ups? We do not use pop ups, this is a good indication of their coporate style, deny everything and spin the works..''

The same with their "Buggy" dealer management tool, this could have been streamlined and made more efficient.

At some point their business model will run out of room as their pricing will no longer sustain the expense and increases they are passing on to the clients. The upper level management I am sure have their exit strategy and 'Golden Parachutes' in place.

New ecommerce options are developing so quickly that many of the solutions presently offered in the market place will just go away.

One of the issues ATC faces is the increase in labor and marketing expense. At some point top management will start to disappear with their hard earned rewards and middle level management will start laying off staff and the ad and promotion budgets will be cut back and the company will have difficult choices to make. Couple this with clients moving to other solutions Auto Trader will bite the dust.

The other option is to move the whole operation and management to India. This will allow them to make a huge increase in profit, as 70% reduction in overhead will reduce their costs. I think this maybe one of the few options left to them.

Plus the curry is great in India.

If you thought AutoTrader was paying attention to the last thread on here involving them, they're going to be monitoring this one real close. AutoTrader has been using the "Sales Blitz" model both on the "National Blitz Team" level and the "Regional Sales Blitz Team" levels for years to help them satisfy revenue goals. It's worked really well for them in the past but the fallout after the blitz teams leave town is felt by the sales staff in the area they sold in for months, crazy promises, bad non existant deals written & submitted, etc. There are some good deals to be had during these blitzes but be careful in who is selling you because as others have mentioned, once they leave town it's basically you against them.

In our market a couple months ago they were offering their "New Car Partnership" listing product for three months FREE w/no further obligation. Signing deals on speculation for them seems crazy to me, sales must be down alot for them. We've experienced some real funky billing irregularities also w/autotrader, pay attention to your billing w/them, trying to get it straightened out drove my accts payable person insane. In the end we owed them nothing, they just had our billing history completely screwed up.

Well they have made the precursor call in an attempt to gain permission to come see me "sometime" next week. The worst week to try and get any car guys attention, unless they want to buy a car. I'll report back after they drop in.

Ill put the over under on their current business model existing - 18 months!!