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Autotrader - Good, but $800-900/sale good????

Nov 4, 2011
2
0
First Name
Justin
New to the forum, thanks for having me guys.

Im wrestling with cancelling AT altogether. Im seeing horrible ROI as far as i can track it. My boss is a believer in it though, but with less than 50 click throughs to my site each month from it, and less than 5 leads a month, I just cant see paying for the premium listings. I feel as though im priced very competitive and have great photos and descriptions, just cant seem to get results.

My thoughts are to cut my listings down to my used cars only, and spend the difference on SEM, or just see if I can talk my GM into taking the money from the Gen-Ad budget instead of mine since autotrader swears they drive more traffic through the doors than they do leads.

Also, maybe you all can help me with this, I saw a statistic once that listed an internet buyers web shopping behavior, I thought it went AT/Cars > OEM site > Google > Dealersite Is that right or have I got some of it mixed up?
 

ddavis

Boss
Jun 28, 2011
1,493
495
First Name
Doug
Justin, I was looking at your website and positioning on AutoTrader. Premium listings come above Featured. With several Premium Ford dealers, your cars fall way down the page. I also noticed that you have a high percentage of vehicles with no or stock photos. I also think that custom descriptions will improve your VDPs.
 
Dec 24, 2010
6
5
First Name
Chris
Hey guys. I usually lurk in the shadows looking at every thread but never really offering anything. And I figured I'd offer my very successful experience.

First off, just to be blunt I am a big believer in crap in, crap out. People will say, "I have great photos, price, descriptions, etc but I still have no activity." Well, having those is like dressing yourself everyday in this competitive market, they ARE extremely baseline and you HAVE to be doing them 100% to even be in the game. So thats not what I mean by crap in crap out. That is not the secret sauce that drives marketing efforts. Focus on it from the point of do you actually know how and why stuff works and doesn't work? I mean do you truly know your craft as marketer or are you trying to cook with an easy bake oven? From what I see in the industry these days, I saw the same thing when I was in college and worked as a personal trainer. There are a lot of personal trainers out there, but there is a distinct level of understanding that separates the amateurs from the true professionals and you can see the same thing in the Automotive Marketing world. It is not from a lack of effort, but make no mistake about it....Excellence is not a measure of effort, it is a measure of results! Here are a couple of points to remember but first heres why I can say what I say.

My AT Results From September:
Inventory Demand Index: 293
SRPS per Vehicle: 3,934
VDP per Vehicle: 106
Activity and Prospects per Vehicle: 16.9

Please watch the below link from Dale Pollak at vAuto(now part of Autotrader) This is incredible informative on how to really measure you're activity:

Webinar


1) As much as we think we are great at tracking source types, we are actually pretty horrible at it. The problems lies not with our efforts, but as Uncle Joe pointed out, buying is a multi-point endeavor now. A smart consumer will look at your same vehicle on several different sites now. We have to use more intuitive ways of tracking the consumer. Check your Google Analytics and I guarantee you will see that Autotrader is one of your top referring sites.

2) How many of you actually look at the fantastic Scarcity reports and how many of you know how the inventory demand index of your inventory is calculated by Autotrader? Combine these with a great stocking tool like vAuto and you can engineer your inventory for maximum market efficiency. If you do not know how this is calculated then you have no business even talking about ROI efforts because you are not doing your job of understanding EXACTLY how your market works. Great thing about these insights from AT is that if you understand them and use them to your advantage then not only does your ROI for AT increase but so does all of your ROI efforts.

3) How many of you just let your feed pull from your inventory manager to AT? How many of you have great search oriented Make/Model/Trim levels on your webpage? One flaw of Autotrader (and actually this is industry wide in my opinion) is that they don't map your trim make/model/trim fields...they VIN explode to get your vehicle tile and it sucks...sucks bad. Ok so change it manually? Well the problem with that is that AT assumes that a User change on its back end takes precedence over anything, therefore it locks out the incoming feed for that vehicle. So if you make a price change, or description change or anything from your inventory manager then the feed WILL NOT be uploaded if you have modified that same vehicle on ATs back end. So kind of a catch 22 wouldn't you say? Well, there is a clever way around that. Ask your rep. But how many 40-50k vehicles do you have on your website that on Autotrader are labeled as a base version of that model....a lot more than you think.

4) cars.com vs autotrader.com vs this vs that ....... You cannot compare to classified sights unless they are set up the same way in terms of tracking purposes. Some of you will say, "Hey I have a better VDP/SRP conversion on cars.com than on AT." Well cars.com counts there shoppers differently than Autotrader therefore their VDP/SRP count/conversion is higher by default. So how can you compare a 5% cars.com conversion with a 3.5% Autotrader conversion when they do even use the same reporting methods? cars.com is just an example and I love cars.com but you can apply this principle to every marketing effort. What a good ROI for classified site might be a bad one for another site.

But you will say heck if one place has a superb ROI compared to another then I should put all my efforts into that one. Couple of problems with that train of thought. First, you are probably not as efficient as you think in maximizing ROI with your current efforts on the site. Second, your MAIN job is to maximize ROI. But there is an economics principal called the Law of Diminishing Returns. LoDR states that holding everything else constant that adding one more unit or production(in this case advertising) will at some point lead to lower per unit(advertising dollar) return. So knowing our job is to maximize ROI from first an efficiency standpoint(ann I maximizing my current efforts) and then increasing adverting dollars to the point of diminishing returns we then can create a model of progression to really determine where ad dollars are spent.

5) As Uncle Joe said, as long as Autotrader is up there in search results and Independent Studies, website polling, etc put them in the top 3, then you need to play where the money is. But you need to be playing in the same game.



Sorry if some of this came off as very frank, but that is just how I am. We had to understand that to become true professionals at what we do then we by definition have to become experts with our tools. Thats a big pill to swallow considering the daily workload most of us have, but the results can be staggering. Look at the comparison of a Peyton Manning to a Rookie QB. Peyton literally spends 100s of hours a month just studying, studying so he knows EVERYTHING about his tools and the market he faces. Look what happen when someone of that level is out....you have a season like the Colts are having this year. I hope all of the above makes sense and you all feel it was helpful. Feel free to PM at anytime.
 
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Reactions: 3 people

flosho

Boss
Dec 20, 2010
159
17
Awards
1
First Name
Jason
Excellent post Chris!

With regards to some of your points. I'd like to throw my Curtis Painter level $.02 at you... ;)

I've looked through the scarcity reports and it basically tells you which vehicle makes/models get the search action and how many listings there are in your area. Pretty simple to understand that if you have a vehicle with 1000 searches and only 2 ads active (in the market) you'll have better odds of getting a click thru than say a vehicle with 100 searches and 42 active ads. I'm not at all familiar with the specific math of how they calculate the entire inventory demand index or what the "scale" is.

I'm interested to see specifics regarding how Cars.com and ATC differ in their SRP and VDP statistics. I've been comparing them to see what they are doing relative to each other and ATC is always around 3.5% and Cars.com always is around 4.1%.

Also just for kicks, I have my Sept report card in front of me...

Inventory Demand Index: 214
SRP: 25686
SRP/vehicle: 1036
VDP: 812

Total activity & Prospects per vehicle: 5.0
 

ddavis

Boss
Jun 28, 2011
1,493
495
First Name
Doug
Hey guys. I usually lurk in the shadows looking at every thread but never really offering anything. And I figured I'd offer my very successful experience.

First off, just to be blunt I am a big believer in crap in, crap out. People will say, "I have great photos, price, descriptions, etc but I still have no activity." Well, having those is like dressing yourself everyday in this competitive market, they ARE extremely baseline and you HAVE to be doing them 100% to even be in the game. So thats not what I mean by crap in crap out. That is not the secret sauce that drives marketing efforts. Focus on it from the point of do you actually know how and why stuff works and doesn't work? I mean do you truly know your craft as marketer or are you trying to cook with an easy bake oven? From what I see in the industry these days, I saw the same thing when I was in college and worked as a personal trainer. There are a lot of personal trainers out there, but there is a distinct level of understanding that separates the amateurs from the true professionals and you can see the same thing in the Automotive Marketing world. It is not from a lack of effort, but make no mistake about it....Excellence is not a measure of effort, it is a measure of results!
Chris, this is a great post. "That is not the secret sauce that drives marketing efforts." I spend a lot of time looking at individual dealership websites and their efforts on third party websites. The extent of most dealership's "marketing efforts" is to buy a website and a subscription to AutoTrader and Cars.

In this market, I am seeing a lot of dealerships cancelling or downgrading AutoTrader. This is probably a good idea because if you don't know what your doing or not willing to put in the work, you're wasting your money.

Last month, I called the guy that I trained to replace me at my previous store. Seeing all of the dealerships that had cancelled or downgraded, I wanted to know if something had changed. It was the third week of the month and he had over 50 vehicles sold in the DMS attributed to AutoTrader and his ISMs. That is with the best week ahead of him. With less competition, his AutoTrader business is improving.

Matt, that was a good read but definately not my experience. The data deals with averages and most stores don't market their products. My previous Internet departments sold 60-70% of the new and used vehicles. We worked ISMs, cradle to grave. We only got credit if the customer asked for an ISM or it was an appointment.
 

yagoparamo

Boss
Dec 30, 2009
1,892
494
First Name
Yago
AutoTrader.com's sourcing studies provide some very interesting information. They have done a ton of them all over the country.

Check out this article that talks about how car shoppers are influenced in their car buying process and how AutoTrader.com performs against other providers.

Articles - How AutoTrader.com uses primary research to clarify the car-shopping process
Matt,

That link is great but the study is paid by Autotrader so the results will always be positive for what Autotarder sells. Is there a study that they have done that doesn't provide good results for their stuff?

Reading the article you also find some things that are not 100% in-line with the reality of the business:

"As a result, AutoTrader.com has used primary research to dispel many advertisers’ limited focus on specific metrics and to examine the halo effect that online advertising has on traditional brand metrics. For example, when our customers advertise on AutoTrader.com or with any other media outlet (traditional or non-traditional), their ultimate goal is to drive people into their dealership."

The ultimate goal of the deaership is to sell cars.

Not attacking Autotrader, as a matter of fact it is fantastic that at least they try to provide info to the dealers about what's going on but is it good to have some checks and balances.

The more important question is:

Autotrader.com just spent an astronomical ammount of money buying Homenet, VINsol, Vauto, KBB, etc. With perhaps the exception of KBB, none of the others are directly related to Autotarder.com creating more leads. Autotrader.com could have spent half of half of the money they used for the purchases in advertising instead and no dealer would be complaining: everyone would be floded with leads.

Why did Autotrader.com diviate from creating more leads--having the money to do so-- in a time when everyone is hurting for business and more leads from a source you already pay for would have been a saving grace in many times and stop the bleeding?
 

john.quinn

Boss
Dec 2, 2009
1,001
656
First Name
John
That link is great but the study is paid by Autotrader so the results will always be positive for what Autotarder sells. Is there a study that they have done that doesn't provide good results for their stuff?
Yes. They did a study for us last month. It was in no way Autotrader-favorable.
 

yagoparamo

Boss
Dec 30, 2009
1,892
494
First Name
Yago
Yes. They did a study for us last month. It was in no way Autotrader-favorable.
Two questions:

Who is "they" in "They did a study for us last month"?

Are you agreeing with me? We are into something here then!
 

john.quinn

Boss
Dec 2, 2009
1,001
656
First Name
John
Two questions:

Who is "they" in "They did a study for us last month"?

Are you agreeing with me? We are into something here then!
"They" are Autotrader, and they paid to have a company survey our sold clients to determine what is driving traffic. Isn't that what we were talking about?

So, no, I guess I'm not agreeing with you, sorry!! ahaha! ;)

Our results showed that while the internet is very important, repeat and referral business is what drives our success.