Thanks to all for your input on this extremely important topic! In the spirit of openness, I am the VP of Advertising Products for Cars.com and received Jeff’s okay before making this post to express my appreciation. I have been and will continue to be reading carefully.

Since Cars.com is the only company offering both 3rd party leads (through our NewLeadsPlus product, not associated with the Cars.com website) and inventory based solutions (through our core Cars.com products) I am grateful for the fact that the bulk of this discussion has distinguished between the two.

Leads services like Autobytel, AutoUSA, Dealix, and our own NewLeadsPlus product are a bit antiquated, as Jeff points out. We have enhanced the value of our offering relative to others by limiting the leads sources to search and in-market automotive sites like kbb.com, Edmunds.com, and NewCars.com, but I certainly don’t expect this product category to remain unchanged for another 13 years. Mike points out the desire for the IP address and click-stream data. That, of course, would need to be optioned into by the consumer because of privacy but is something we will investigate and work toward. Other ideas are extremely appreciated.

The core Cars.com product is a subscription service, because most consumers never submit a request for quote through any site, as pointed out by Jeff. By not having to put our stamp on a consumer in order to monetize them, the shopper is free to contact the store by phone, email, or website transfer. Additionally the shopper can simply go directly to the store without leaving any evidence to demonstrate that it was the dealer’s listing on Cars.com that sent them. This makes it impossible for Cars.com to be compensated on a per sales basis. Having read Mike’s post I will increase our efforts toward greater measurement of performance on all fronts, including walk-in traffic.

Many thanks for the recommendation regard secure credit applications (SCA). Our new SCA is our fastest selling product. However, it does not load directly to the CRM system, and we are scrambling today to change that if at all possible (thanks Chris). We will continue to focus on dealers offering BHPH and help dealers reach those consumers and we are working toward enhancing our product offerings specifically for those dealers later this year, but I agree with Chris on the desire to have it even sooner.

Cars.com certainly strives to be supportive of dealers, and that starts with listening to them. Thanks to all for extremely valuable input.

Found a screen cap that summarizes the significance of a Autotrader's "leakage" as mentioned previously. I'm aware the vast share of their audience is concentrating on cars within their respective DMA/zip, but how much of this "leakage" is really happening? I'd like to see more "local" promotions on pages, lets get more "local" oriented with "local" landing pages on classified sites. Login to view embedded media View: http://www.flickr.com/photos/21147718@N02/2346794830/sizes/o/

One thing I would like to see from the current vendors I use is a discounted rate or a credit for leads that do not provide a valid phone number. It is not a common issue but it does exist.

---No hard feelings I hope, just drastically different viewpoints.---

Absolutely no hard feelings. I don't even know who I am talking to.

Almost all UCG style sites have advertising on them and some exist so people users can profit from their use.

Eventually there will be a happy medium in this arena, but current models are just not very supportive of dealers.

---Paying to provide content to a website that they monetize in ways that do not benefit you is ignorance of acceptable standards.

Not trying to be argumentative, but "acceptable standards" would be what the two parties enter into at the time of a business relationship, correct?

Last thing and then I'm done. I already feel like I hijacked this thread. Please don't block me Jeff.

---Just think if all user generated content sites charged for admission. How successful they would be?

Same concept different venues...

Again disagree. I have the most viewed videos on youtube open and, oh my goodness, not a single advertisement. I've been through 7 pages and not a single one of them are encouraging me to make a purchase. Crazy! Could it be that most of the people going to this site aren't looking to buy anything, and the vast majority of people supplying the content arent selling anything?

Different venues, Totally different concept!

I assume that all the content you are generating and sending to cars.com and autotrader is for the expressed purpose of commerce. And likewise, the users that get on those sites are at least somewhere in the process of researching and buying a car.

With the exception of Craigslist, and even that one in a few markets that now charge for employment and realestate listings, the user generated content sites are not designed to benefit the user that supplied the content monetarily. I think that your argument against the monetization of user generated content is neutered when you consider the supplier and the end user's expectations.

No hard feelings I hope, just drastically different viewpoints.

consumer pay for a subscription? Like consumer reports? You can't get anything for free from consumer reports.

JL The point is what is the accepted standard today may not always be the case.

However I disagree with this statement:

"I respectfully disagree with the assertion that substantial value can be derived with nominal investment in any medium."

It is proven wrong time and time again in niches outside of the automobile industry and to some extent inside of it.

Paying to provide content to a website that they monetize in ways that do not benefit you is ignorance of acceptable standards.

Just think if all user generated content sites charged for admission. How successful they would be?

Same concept different venues...

---see if you can figure out how ludicrous the opinion given 13 years ago is today..

Actually, before aol was the internet it was bbs servers, and yes, I remember! No doubt the landscape has changed. Linkway on a 386 is a distant memory and a 14.4 baud modem won't handle the flash on the sites these days. But I think you know that was not the point I was making.

Since the first caveman started exchanging shiny rocks and a dull stick for a pointy one from the guy in the cave down the dirt trail certain things have had more value than others because they were more effective.

I'm not talking about a decade of technological advancement, surely the stuff we do today will be equally as foolish to us in another decade. I respectfully disagree with the assertion that substantial value can be derived with nominal investment in any medium. Since the modern era of mass marketing somebody foots the bill regardless of medium or industry. From your comment, I'm still not sure how you see it differently?

I think Dealers want more-better leads. Unfortunately, the market is only so big and only demands so much. Dealers want ways to work leads better and longer. Leads are increasingly becoming more important because sales are slow. I think Dealers want lead scoring but there are issues to address first.

----At the end of the day "it takes money to make money" and maybe I'm not a visionary, but I just don't see anything on the horizon that is likely to change that.---

Remember the day when AOL was the Internet?
Are you old enough to remember when Word Perfect was the standard?
Do you use IE browser only?
What happened to 5.25 and 3.5 floppy disk?
What happened to all of the stock brokers that guided your daily investments?

Look around you the online/computing world is very fluid and what was standard quo yesterday is now a memory. I suggest you read this article. http://www.newsweek.com/id/106554/page/1 and see if you can figure out how ludicrous the opinion given 13 years ago is today..

Paul

Mike Muncy writes:
Instead of being charged to send your inventory and descriptions (the valuable content) to a site like cars.com or autotrader.com? Why are the dealerships not getting the service free - oodle.com or vast.com ...

Pete Says:
So nobody say first "they are already free listing services"...I know that but none have any "wind" ...Does anybody know of the one that just spent 6million in six months and is gone already?...Kaboom! and they will both be gone once someone gets enough wind at their back to offer the listings for free.

Not sure about you, but my mother always told me "if it sounds too good to be true..." and I'm sure you know the rest. If you are holding out hope that a new start up is going to come along and advertise all of your vehicles with customized video presentations, secure credit apps that integrate with your CRM and, hell, detail all of your cars before they take 47 photos of them and all at no cost to you because they "need" your inventory, I'm going to suggest that you don't hold your breath. That makes as much business sense as a dealership giving away cars to build brand loyalty.

The "wind" behind autotrader and cars.com is gale force. 6 million over six months? You have to lay 6 mil in 60 seconds to be a player at these tables. The tables for usedcars.com, myride.com, vehix.com, web2carz.com, getauto.com, peachstateautomall.com and pleaselookatmyFREElistings.com have a small ante and an equally small pot to be won.

I'll finish with this, if the maxim that Paul presents, "Content is King and Traffic is Supreme" is true, then Content and Traffic must co-exist for success to be possible. Free listings mean lots and lots of crappy content, if it were free fringe dealers would upload 100% of their inventory which would degrade the buyer pool i.e. craigslist. A barrier to entry, not a gouge, is a good thing for those that can afford to be inside the fence. The retail buyer (non-craigslist) seems to know the difference between these sites and shows a strong preference. But the real issue here is traffic, and just like every other medium, traffic is not free. There are real costs to providing effective products, that's why so many have tried to knock autotrader off the pedestal with the free listings model and failed.

Paul, you complain about leakage and suggest that inventory should be free, seems to me that you inherently must have one or the other. There are 3 options, the dealer pays to be on the site, the site is paid for by interuption advertising as in TV and Radio, or the end user uses the site by subscription which isnt likely, what am I missing? Looks to me like the cost of both of these sites are split between option 1 and 2.

At the end of the day "it takes money to make money" and maybe I'm not a visionary, but I just don't see anything on the horizon that is likely to change that.

JG - thanks for the definition. We know what 3rd party lead providers do. This is a discussion to say what we would like to see changed about them. Do you have anything to add in that regard?

RE: 3rd Party Leads.....

3rd Party leads provide access to some of the most trusted and branded websites in the world. These sites spend large amounts of money to be of value to the purchasing public. Much more than Dealers can get thru their own marketing SEO/SEM efforts. And they are unbiased for the most part. They provide valuable information to the consumers.

3rd party lead providers move these leads to the Dealers in the most efficient manner possible. Without these leads the Dealers would have few prospects in their sales funnel. Each 3rd party provider has different features and benefits all of which allow the Dealers to do their jobs more efficiently - thus lowering the costs per sale.

There are 3 big Lead Aggregators - Dealix, AutobyTel and AutoUSA.

As for AutoTrader and Cars.com, both are price gouging and supplying Dealers with reports to justify their value. It is advertising but bottom line - what is the ROI. The value is in delivering good leads to Dealers and inturn, the Dealers being able to justify the ROI. Paying $1400 for 14 leads translates to $100 per lead. From there, look at how many leads actually purchased and then what is the ROI per lead or program. Some cost $3500 but do not guarantee any lead volume.

The newest player is www.UsedCars.com which is based on a per lead charge. Lead costs are $25 per lead. Plain and simple. It's the lowest cost per lead model available (I think).

----From Classified Sites, what do I need? I want *Web 2.0! I need them to give me tools to create content, then get out of my way!---

This is already being done it is just unfortunate it is not in a classified vendors style site. I was able to sell 8 used cars that was directly attributable to one page because I was able to get instant SEO from this platform for the term "Market Area Brand" searches for a brand we do not carry, which was also the name of a local dealer.

It was a little work. Maybe 30 minutes to set up and 5 to 10 minutes a week to maintain.

Best of all it is free and the traffic is monetized. :P

wish the videos were a little easier to find on atc

Sorry - Had to jump in here to respond to Joe Pistell who wrote: "Why don't we have a personal video from the hard working and passionate ISM rather than "YOU MUST PRINT THIS PAGE AND ASK FOR PAUL H JOHNSON FOR YOUR TRUE INTERNET PRICE"."

That's already available at no charge Joe and you can probably guess where.

Unfortunately, as simple and easy as shooting a brief video is, it's mind-boggling how few dealers will make the effort to better merchandise themselves this way, even when the opportunity is right in front of them. Only the relatively few "enlightened" dealers are doing so. I suspect it's because many others don't see an immediate cause & effect (i.e., post videos = X more sales per month) so they aren't interested in investing the time or effort.

So nobody say first "they are already free listing services"...I know that but none have any "wind" because they all are waiting to catch a free wave that dealers will jump on magically and they can sell their company for big money, NOT going to happen.

When I see them at the stores hustling to get dealers signed like Autotrader then maybe they will make it. Cars is backed by a multi billion dollar company that will lose money and squash the college kid start ups.

Does anybody know of the one that just spent 6million in six months and is gone already?

I apologize in advance for commenting on my own comment, bad blog manners.

Take care and all the best to everyone.

This has been fun and so long,

Pete from the Windy City

"They both have let the boat pass them"...

I agree totally with you Paul it has and just because you can still see the boat, doesn't mean it hasn't passed.

The big reason that Cars and Autotrader still exist is that although it cost big $$$$ to list aggressively, it's still cheaper than a dealer trying to launch a nationwide campaign on their own to reach that large of a targeted audience.

Kaboom! and they will both be gone once someone gets enough wind at their back to offer the listings for free.

I have had a discussion with the newest big man on the internet block and we'll see if it all comes together in time.

I have some foresight opinions here that once Microsoft takes over Yahoo and the time is right Yahoo autos and Msn autos combined just put together a one two punch knockout if they decide to offer to list for free in lieu of placed ads.

Hey Cars.com and Autotrader want to stay in business?

Start reading Jeff's Blog and hire us all here as independent ISM marketing consultants for big $$$ because the more powerful that Jeff Kershner's blog becomes we may all power info together and buy you out to go away...☺☺☺☺all the way to the bank!!!

Oh, and one more thing from my end... I want the IP and URL that generated the lead... click stream data too.

Mike Muncy / Founder & CEO / Carfeine.com

Jeff: The last thing that the 3rd party lead providers want to do is become transparent. They don't want you to know where you got the lead generated (remember your point of womanmotorist.com some time back?) and they certainly don't want to integrate with something like lead scoring. That'd be like the proverb of taking off the nose to spite the face.

Chris: There are certain technologies and services available to those in Internet auto sales to help manage the various lead channels and restore some transparency.

Joe & Paul: Here's an idea that I'll give to this community. (It's definitely a Web 2.0 approach) Instead of being charged to send your inventory and descriptions (the valuable content) to a site like cars.com or autotrader.com? Why are the dealerships not getting the service free - oodle.com or vast.com -and actually being PAID a percentage of the ad revenue that each of their vehicles generates? Here's the point: If you have hundreds of vehicles and you have popular vehicles in stock then you should be generating quite a bit of eyeball traffic. If these companies are really partners then shouldn't both parties be more equitably profiting?

Better yet, why don't they adopt the floor salesman compensation model and be paid more for a sale versus an up?

Mike Muncy / Founder & CEO / Carfeine.com

-----The money is better spent on a speed pass which is what Cars.com is.

Autotrader better get it together fast because they are getting stomped on by Cars.com-----

They both have let the boat pass them.

Paul Rushing

Great discussion and here is what I will add;

This paying to vendors for "drive to traffic" amounts to a toll both on the (very old term) internet super-highway.

Everyday there is new and a better means for customers to travel to a dealers website and paying for how many people drive by is soon to be gone, but maybe not because dealers are slow to realize things most of the time.

The money is better spent on a speed pass which is what Cars.com is.

Autotrader better get it together fast because they are getting stomped on by Cars.com

Ebaycars, was great to brand in the past but to sell a late model car not so sure unless its a 1978 Pontiac TransAm...still cool to me but it was my childhood dream car so I would look there to find it.

Hey who turn the spring weather off here in Chicago, brrrrrr!!!

From Classified Sites, what do I need? I want *Web 2.0! I need them to give me tools to create content, then get out of my way!

*Web 2.0 is web design that aims to facilitate creativity, information sharing, and, most notably, collaboration among users Web 2.0 - Wikipedia

Look what happens at MySpace and Facebook. Personality rules! Nothing plain and boring there! Marketing leaders (like me will create all kinds of fun stuff to make that shopper hang around just a little longer.

What am I talking about?
Why don't we have a personal video from the hard working and passionate ISM rather than "YOU MUST PRINT THIS PAGE AND ASK FOR PAUL H JOHNSON FOR YOUR TRUE INTERNET PRICE". Just like on MySpace, Small Entrepreneurs could offer widgets to implant all forms of fun widgety stuff.

If I am Chip Perry, and I can add a platform and tools to empower our dealer base with a goal to create UNIQUE content that will retain visitors longer, its a win-win-win. The last win would be keeping shoppers off competing sites like cars.com.

Joe
(yes.... it's me again)

Great comments Chris. It's easy to tell you're right in the middle of the battlefront at your biz.

re: Classified sites
Chris, I'll take the other side of the argument. In my world (a marketing director) all the points of measurement are important. Click-thrus, printed pages, emails, phone calls, all are signs left from shoppers who prefer to remain anonymous.

Although these activities do not directly correlate to sales, they trickle down to floor traffic. If you improve your classified presentations and activities are up 20% year over year, then floor traffic should be seeing a similar increase in Mr. anonymous internet classifieds shopper.

Joe