AutoTrader.com Pricing???

[David Metter (blog)]

Come on Shaun! My Bose speakers sound just fine in my family room.... It seems like most dealerships feel the same about Autotrader but why do we continue to feed the beast. TJ was right-on about his comment regarding the inventory but Autotrader isn't the only one that does this, they just charge more than anyone else...

Dealerships have allowed multiple vendors to get rich at our expense. We have the assets, pay the light bills, employee expense, rent, etc. and must live with tight margins. Certain vendors use our inventory, our real estate, our brand, to profit (at much larger margins) and grow their business. Take two minutes and really think about the 3rd party lead business model and it will make you sick. The paid-search business model isn't any better because vendors have us competing against each other, tier two money (which is ours), and tier one (our partners?).

Back to Autotrader. Autotrader will continue to raise their prices because dealers continue to pay those prices. The only way that AT will stop the increase is if dealers cancel and new deals stop coming in. We can stop this madness by investing in our own sites, building great content and a positive buying experience, and making our inventory presentable and searchable online. Remember, it's our commodity that we are selling.

 

[Lightnup (blog)]

Maybe this helps explain things:

ATLANTA (Business Wire EON) October 31, 2007 -- AutoTrader.com (www.autotrader.com), the ultimate automotive marketplace, was once again rated as the most useful automotive site among used-car buyers who visited the site in the J.D. Power and Associates 2007 Used Autoshopper.com study, released October 25. This marks the fourth consecutive year AutoTrader.com has attained this rating.

 

[C.H.]

A.T. does this because they can. Other providers get their visitors from a better quality source that is more local. Cars.Com is everywhere and in front of people locally and nationally and that just draws better.... oh ya, at a way better ROI! Plus, all the "partners" that AT braggs about don't amount to squat. Anyone can look up the numbers. KBB, MSN and other all draw people for reasons other than car shopping.(hotmail, news, etc) The only auto channel on the rise is Yahoo! and AT lost that one. As a consumer (of A.T.)money speaks, I don't spend with them, then the price hike doesn't effect me. Plus it feels good to go to a cheaper, better way of doing things! (Cars.com and local seo)

 

[TJ]

Maybe this helps explain things:

ATLANTA (Business Wire EON) October 31, 2007 -- AutoTrader.com (www.autotrader.com), the ultimate automotive marketplace, was once again rated as the most useful automotive site among used-car buyers who visited the site in the J.D. Power and Associates 2007 Used Autoshopper.com study, released October 25. This marks the fourth consecutive year AutoTrader.com has attained this rating.

Hows this explain twice the rate of their largest competitor for the same measured ROI for the past 18 months? Is it me or does Autotrader.com merely pontificate off of JD Powers every year in an attempt to justify 80% price increases in some cases? Not working with us this year that much I can tell you. "Usefull" is great but when the rubber hits the road as it were Autotrader isn't justifying it's cost per month with ROI in our store anymore nor has it for the last several months. Our call numbers are not justifying an 80% price increase, what does JD Powers have to say about that I wonder?

 

[Good Ol' Boy]

"...left because I as an employee went from a first class citizen to a lower class, order taker, and renewal/contract robot" Just wanted to take a moment to clarify that the lions share of these recently implemented price increases are not finding their way into the current sales staff of ATC's pockets either. It's purely a corporate greed strategy to make yearly numbers. They've lost many good veteran sales people from the remarkable corp greed attitude in the place, it stinks in here.

 

[Good Ol' Boy]

"...left because I as an employee went from a first class citizen to a lower class, order taker, and renewal/contract robot" Just wanted to take a moment to clarify that the lions share of these recently implemented price increases are not finding their way into the current sales staff of ATC's pockets either. It's purely a corporate greed strategy to make yearly numbers. They've lost many good veteran sales people from the remarkable corp greed attitude in the place, it stinks in here.

 

[Good Ol' Boy]

"...left because I as an employee went from a first class citizen to a lower class, order taker, and renewal/contract robot" Just wanted to take a moment to clarify that the lions share of these recently implemented price increases are not finding their way into the current sales staff of ATC's pockets either. It's purely a corporate greed strategy to make yearly numbers. They've lost many good veteran sales people from the remarkable corp greed attitude in the place, it stinks in here.

 

[Jake]

Boy, seems like this topic comes up about once a year and creates a firestorm. Let's see, once a year the topic comes up, the Autotrader.com renewal rates increase once a year...coincidence? What I find interesting is that dealers always go off like this when they're up for renewal but they quiet down for about 11 months after that, almost like a boxer takin' one on the chin, talking a little trash, and then falling to the canvas.

I worked at Autotrader.com for a couple of years too, and like TJ said, the corporate mentality is that "they'll be back eventually". I'm in the process of compiling some data, but the preliminary results show that overall leads per vehicle are down from the previous year - not just down a little here, up a little there, but down in an amount that is statistically significant.

So this begs the question: why do dealers continue to use Autotrader.com more than any other site?

I think the answer is fairly simple. Although the ROI may be flat, or even as it seems to be trending toward ROI losses year over year, Autotrader.com does have the highest traffic numbers. In the end it's still a good deal (in most cases) compared to other media because there IS a return on investment. Does this mean you shouldn't be angry? Of course not - I would be furious and would probably cancel on principle if I were a dealer. There is however still value to Autotrader.com, even though that value seems to become less each year.

The question of whether you should pay the rate increases or cancel is a tough decision. Sure, marketing money could be spread around effectively if done properly, but your competition will get some of those deals that you would have closed if you were on there too. For this reason I have been recommending a lot of our clients downgrade their packages with Autotrader instead of cancelling altogether. Customers go there for one reason - to find a car. When you can pay $2000/month or $1200/month to have your inventory listed in the same section of the site, it only makes sense to downgrade.

 

[Alex Snyder (blog)]

David Metter - nice post. I’m a big fan of a competent competitor, and am looking forward to seeing MileOne get more involved in the Southern Virginia market. On top of that, thanks for looking out for ole' Jeff! Your post cracked me up because I had a meeting with AutoTrader.com last Friday evening in my boss' office. We were meeting with them because we were not happy with the results we were getting for our recent Premium-AT.com-market-tests at the new rates. We are actually seeing less response on the premium level than we saw on the standard level. That is besides the point. The funny part about the whole meeting was from the "Dealer Group" AT rep saying "David Metter, of MileOne, was in the same shoes you're in Alex. He wanted to cancel everything. Since I started working with him he has become one of AutoTrader.com's biggest fans."

I was going to wait before posting my own experiences with AutoTrader.com, but I couldn’t stand not putting the AT rep’s statement to me out there after David’s post.

We’ve been on and off with AutoTrader for years. With the turn-over of dealership personnel, the industry is full of short memories and second chances, and we are no exception. All it takes is a new GM on the dealership level or a stronger AT sales rep to get AutoTrader back in the door. Then it is the same thing all over again.

I believe AutoTrader preys on high dealer turn-over and also preys on their own high turn-over amongst their sales reps. How many AutoTrader.com reps have you had in the past 3 years? I’ll bet AutoTrader wins the award for highest turn-over in sales reps amongst all third party lead providers. Yep, that’s right, I called AutoTrader.com a “third party lead provider”. Newsflash AutoTrader: you’re playing on the Internet, you’re trying to get customers to call and email dealerships, and you’re trying to deliver traffic to a dealer’s website. Yes, you’re also putting customers on the lot, but we all know that cannot be tracked effectively. At the end of the day you fit my definition of a “third party lead provider”, so accept it and let’s not have that argument ever again. Yes, that also means I’m going to rank you against Cars.com, AutoUSA, Dealix, and all those other things we have allocated to the…..drum roll please….”INTERNET BUDGET”.

We just recently signed our Honda and Toyota stores up. Toyota was a deal cut through our regional Toyota ad agency, so it doesn’t cost us anything to be on AutoTrader for the standard service. Honda was signed up as a test. We had some extra money left over from a radio campaign allowing us to “experiment” with a few different Internet ventures. Our Hyundai/VW location was already on board, so I am using this opportunity to really see if AutoTrader is worth the money at their higher price points (compared to when we participated at half the price). We have made some internal changes to make our online inventory list stronger/better since the last time we were a premium AT dealer, so I think this is going to be very telling of how well AT works today. They have one more month on my test program.

So far, I’m actually receiving less leads/phone calls as a premium dealer than I was as a standard dealer. I still have the same issues with Atlanta, and the same stories from my reps. We get a whole lot of looks on cars that were going to sell anyway: older, cheaper, foreign cars…..cars that don’t even need to be marketed. The things we need to market don’t get any extra exposure I can track – phone calls and emails. The response from AutoTrader is “you have to list your specials, you have to get into our tool to monitor what is selling in your market…..blah, blah, blah, blah”. My response will never change: “why do I have to pay you to do more work myself?”

To re-summarize my 2007 “test-run” of AutoTrader.com: It has given me fewer leads than I had back when I was with them from 2004 to 2005. I have less than half the leads I receive from Cars.com. I have to log-in to another friggin’ back-end tool to see what is going on. I am still fighting with my rep. I am still asking the question of “why”. I still remember that I saw absolutely 0 change in the number of cars we sold after we cancelled AutoTrader last time. It still isn’t helping me sell the inventory I actually need help with.

I feel like I am giving AutoTrader the biggest effort I’ve ever given them, this time around, but the results are going to be the same.

 

[Jake]

Oh, and by the way, I too "left because I as an employee went from a first class citizen to a lower class, order taker, and renewal/contract robot". I think this speaks volumes to where Autotrader is headed, led by management robots, who are in turn led by upper management robots.