Cargurus might be coming for you soon. PRICE INCREASES

[Dan Sayer]

can we shift that budget to another source and maintain the status quo or increase it (SEO, SEM, other 3rd party vendors)

So this brings up an interesting "what if" that came up at a 20Group of mine last month. We had a new vendor speak that has experience with Google (as in former Google employee). They compared the listing sites (CarGurus, Cars.com, etc) to the travel classifieds (Expedia, Travelocity, etc). Their point was the birth of the travel classifieds .com's came about to fill the void created by the airline and hotel industries inability to get found on search as well as their crappy sites to book flights/rooms, etc. Fast forward to today, I found myself, and everyone else at that 20Group, booking my flights directly through the airline and it was a great experience. Same comparison years ago, the retail dealer's inability to get our inventory found via search and our crappy websites opened the door for the Classifieds. The classified sites took over and basically most retail dealers, still today, spend money with them instead of just building inventory dynamic campaigns for their Used. This new vendor was pretty adamant that with the right strategy, whether with them or another capable provider, a dealer could show up on page one with their "2016 Ford Fusion SE" along with the Cars.com and Cargurus listings.

Thoughts on this?

 

[ideveroux]

This new vendor was pretty adamant that with the right strategy, whether with them or another capable provider, a dealer could show up on page one with their "2016 Ford Fusion SE" along with the Cars.com and Cargurus listings.

Thoughts on this?

You're looking at it from the correct angle. Getting your organics to show up for used vehicles (and new for that matter) is having the inventory coded properly for google (metatags, etc...) 3rd party has spent millions, if not billions, in honing this and sadly automotive website providers haven't.

The workaround is SEO. Have your SEO company build content around inventory makes and model you carry. This is NOT an overnight endeavor, it takes MONTHS. BUT, as content grows, organics will too. You will NEVER outrank the 3rd party vendors on page 1 unless you aren't in a major market. Your goal isn't to be #1 organic on used (again, impossible): your organic rankings with google will feed into your relevance for SEM and the Ads you run that has relevant content for your domain, will help you rank higher with your ads.

If you're SEM company is doing their job (and you need to make sure they are), pre-owned SEM ads should be pointing to optimized pages about that ad. (i.e. if you're running an ad for Certified Pre-owned Jeep Grand Cherokees, then that ad should point to page about say, "Buying Certified Jeep Grand Cherokee SUV's are good for the pocketbook". Google see's your ad about Certified Jeep Grand Cherokees, checks where it's linked to (Certified Jeep Grand Cherokee is in title, meta data is directly related to the ad) and Google says hey...This ad is totally relevant to the content it points to...I'm going to give it preferred placement because the other ads are just pointing to an inventory list. It will take time so don't think you can just flip a switch from 3rd party to SEM and be happy. But once you have SEO content and start linking SEM ads properly to the content, you'll start to see the bigger picture come into focus.

When I first started trying to get traffic for pre-owned, it was a complete bust. Dollar for Dollar, it was impossible to get the traffic, it still is. We have, however, found that the trade-off has led to higher grosses and VERY LOW FUNNEL CUSTOMERS.

 

[John_pol]

The cost of CarGurus for dealers has gotten out of control.
Every year there’s another increase.
dealerships can’t keep absorbing endless price hikes.

 

[Dan Sayer]

The cost of CarGurus for dealers has gotten out of control.
Every year there’s another increase.
dealerships can’t keep absorbing endless price hikes.

It's really a question of ROI then. Is it bringing you value? Vendors with an easily measurable ROI, where that ROI is good at whatever the dealer accepts as good, typically avoids expense discussions. Vendors like CarGurus, AutoTrader, Edmunds, CarFax Listings, etc have started partnering with "attribution BS meters" like Clarivoy, to prove their contribution, or the dealer itself subscribes to inspect for themselves. I'm of the mindset that classifieds have a major hand in our Used strategy BUT understanding how to measure attribution, or what level of attribution we accept, is a real challenge. IF Used cars as a department is failing, it is typically first because of processes at the start. Buying vehicles, merchandising, pricing, and Sales process are typically broken which then puts inspection further on the expense side of the department (gross heals all wounds). Departments with high-turn and better than average front and back, typically manage their expenses to Guide and then just keep it running. The temptation during that success is to further increase profit by trimming expense which can sometimes create a gap in momentum. Cancelling the tools that may very well be the ones assisting in the current success is a risk.

I will add though, that I'm painfully aware that the prices of automotive retail tools/software/etc is typically 2-10x more than functionally similar tools in other industries. Our higher revenue per customer is the excuse they use.

 

[Alex Snyder]

I will add though, that I'm painfully aware that the prices of automotive retail tools/software/etc is typically 2-10x more than functionally similar tools in other industries. Our higher revenue per customer is the excuse they use.

The issue is historically integration costs. Mostly from DMS companies, but others (cough....Cox....) are sneaking up there. I think AI costs are going to start having a large impact soon.