The reason it costs so much is due to the enormous amount of waste in media spend. How many times do you look at a car and say "look at all the vdp's? Why is this not selling even when priced right etc?" It's because ad platforms are graded on how many VDP's they generate so if you have a "click candy" car its going to attract click bait, dreamers, etc but not buyers, your ad spend is going to climb. But your rep is going to say "look how great we did driving vdp's!! Meanwhile your bread and butter, high profit high demand stock is going unseen...NADA says it takes 30 vdps minimum to sell a car. Look at your results and see how much of your inventory is below the 30 vdp threshold. Your vendor is probably not showing you that data but it should be in your GA, When this happens, cars age and you start marking down pricing because someone is telling you "you are priced too high...lower the price and buy a spotlight!" Its starts a vicious cycle. At my company we see success when an average of 5 "low funnel ready now buyers" view a car. Those buyers are going to buy in 12-20 days based on our data. Our $100 per car rate ends up at an effective rate of around $90 per car at the end of a month. Yes,,,combining all vendors - digital, email, 3rd parties, tv, radio, etc, etc will add to the cost. I say dump that stuff. 90% of people now days don't use 3rd party classifieds,,,they simply type into search "Used (brand/model) near me" and go see the car. Heck they probably speak it into the phone.
There's parts of this that I agree with, however, the other parts are "onus" that gets lost.
If a car gets a million VDPs, and no leads, it isnt a successful marketing campaign.
You can hold 3rd party vendors accountable the same way you do your website to tangible results. Your website similarly delivers VDPS/SRPs, and is a lead gen tool.
If you measure chats, email/form leads, text leads, and phone calls from a 3rd party site, then add in a secondary measurement of referral traffic to your website, and measure THAT traffic in how much leads it generates, you have a pretty roundabout view of how valuable a lead source any of the 3rd parties are.
Im not talking "multi channel attribution" which covers touch points, Im talking verifiable leads.
Where this fails in most cases is a: nobody wants to do this every month. Its easier to spend money and believe the reps about wild VDP swings, and merchandising/pricing "issues" (drop the price, get better photos, walkaround videos, write a better description, etc etc).
Additionally, where this fails, most arent even utilizing their website TO track those items correctly. If you're not tracking each lead type separately between new and used car leads, and just using a total "form fills" goal, you've already lost a major portion of the most important information.
I'd be less concerned about a 3rd party's lead "driving" capabilities on a new car, during the new car inventory crisis, and I would want to specifically separate that from used car leads, whenever possible.
The other parts that nobody wants to talk about is attribution at the CRM level. How many of those leads are lost to the "showroom" drivebys? How many are lost to phone ups that are just logged as "internet" or some other vague criteria? You cannot accurately measure cost per lead, (or the true cost to sell a vehicle) when you cannot even trust your own data.
" 90% of people now days don't use 3rd party classifieds" I would not agree with that statement, personally. Any of your 3rd parties will give you search volume for make and model by now. Its not negligible by any means If anything, google's entrance into the "shopping" Vehicle Ad product, is a testament to how much traffic was being captured by 3rd party classifieds in the first place.
"they simply type into search "Used (brand/model) near me" and go see the car." The problem with that assumption is that you're implying that dealership website rank high enough for an individual used car, with regularity, to outrank a carfax, cars.com, cargurus, carvana, etc etc for a lower funnel long tail search. I dont believe that to be the case, and it is very easy to test and see the search results disprove that as well.
3rd party websites are a necessary evil unless brands invest a consistent amount into their own used car strategy at the website level, which still may not deter the large % of buyers who have learned over the years to begin their used car search on autotrader.com regardless.
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