What, exactly, is the purpose of your third party spend? Is it supposed to build brand awareness of your dealership? Is it to drive traffic to your website? Is it to generate leads in the form of Calls, Texts, Forms? Is it to SELL CARS?
Or is it to shut up Old Bob, your archaic used car manager who insists it works without any data?
One of my biggest gripes with Third Party Inventory sites is the way they block dealer access to data in an attempt to prevent dealers from seeing their true performance. If they were serious about transparency, then they would allow dealers the ability to download historical performance data in a csv format. Not partial data. Not for the last month. Not in a formatted Excel or PDF file. But all historical performance data.
None of them do this because if they did, dealers would drop them like a bad habit or demand price reductions.
Another of my pet peeves is the way they use other lead gen methods and advertisers to generate leads/actions that they roll up into their reports as "engagements." The perception is that a car shopper goes to one of their sites, searches for a car, sees a SERP, clicks on a dealer's car that generates a VDP, and then converts into some kind of lead. But, I've seen way too many cases where these third party sites use other parties, like Craig's List, to generate phone calls or leads. Or they will use retargeting ads to generate leads. In my opinion, this is deceptive. In my experience the quality of these "leads" sucks.
But to your point, is Cost Per VDP still relevant?
Yes and no. Its a measure, and sometimes you have to use what's at your disposal. So from that standpoint, it's relatively useful to compare performance between Third Party Vendors, and as a benchmark for performance so when your rep comes in and tries to raise your rates you have some sort of rational basis for making a decision. But beyond that, it's questionable.
The truth is it's way too easy to manipulate top level KPI's. Increasing the number of VDPs and lowering the Cost Per VDP means nothing if it doesn't translate to your bottom line as sales.
Unfortunately way too many GMs still use the mindset that, "if it sells me one or two more cars a month, it's worth it."
And given the nature of OEM Co-op programs and the political pressure marketing managers are under, often times it's just not worth the hassle of cutting this dead weight from your budget and reallocating the spend to more productive uses. Especially if the only real alternatives you have are OEM approved Co-op SEM vendors.
