3rd Party Lead Analysis White Paper

How the Major Classified Auto Vendors Hurt Your Online Success

How the Major Classified Auto Vendors

Hurt Your Online Success

A White Paper From

Creative Content Blogging Inc.

Legal Notice:

While all attempts have been made to verify the information in this publication, neither the Author nor Publisher assumes any responsibility for errors, omissions, or contrary interpretations of the subject matter herein.

This publication is not intended as a source of legal or accounting advice. The publisher wants to stress that the information contained herein may be subject to varying state/local laws or regulations. All users are advised to retain competent legal counsel to determine what state and/or local laws or regulation may apply to the user’s particular business.

The Purchaser or Reader of this publication assumes responsibility for the use of these materials and information. Adherence to all applicable laws and regulations, federal, state and local governing professional licensing, business practices, advertising and all other aspects of doing business in the United States or any other jurisdiction is the sole responsibility of the Purchaser or Reader.

The Author and Publisher assume no responsibility or liability, whatsoever on the behalf of the Purchaser or Reader of these materials.

Any perceived slights of people or organization are unintentional.

Copyright © 2008 – Creative Content Blogging Inc,


Why Listen To Us

Creative Content Blogging Inc. is the brain child of Paul Rushing and Mike

Paetzold. We provide content across various mediums to help businesses

promote their products and generate leads via affiliate networks.

Paul Rushing is currently the Internet Sales Manager at Carl Gregory

Chrysler Dodge Hyundai in Brunswick, Georgia. He uses a unique

approach to generating leads across many platforms. He also markets

many different products online and is very active in many of the

automotive social media venues.

Mike Paetzold has made a full time living from on line marketing for the

last 2 years and has taught numerous businesses how to create leads and

use the internet for a variety of off line businesses.

Our Hypothesis

The current trends in automotive online marketing are not in sync with

accepted best practices across the World Wide Web.

The web is the only medium that you can start with virtually nothing but

time, build a massive marketing presence in any niche, and create a

measurable identifiable process to drive leads to your phone, inbox and

showroom.

The major automotive classified vendors in the marketplace have adapted

their products to help you accomplish your short term goal of selling a car

today while at the same time taking away from your ability to market

your business effectively online for the long term.



Leads – Crack of the Car Biz

Lead generation is the most important aspect of any online marketing

operation and the process in which they are handled is what makes or

breaks the internet sales department at your dealership. There are many

ways to acquire leads and the automotive classifieds do seem to provide

the best ROI quickly. This is second only to the dealerships own website

or microsites.

The cost of online classifieds can range from free to several thousand

dollars per month and leads generated from these venues provide a

positive ROI. Let’s face it, we all need leads today to sell cars today. The

more leads we generate today equals more sales today. That is what the

use of these services is all about – Business Today!

Third party lead vendors prosper based on the average dealerships 30 day

window of measuring results. Manager’s and salespeople’s incomes are

dependent upon results during this period.

Due to this fact most of us turn to crutches to prop up our lead volume

during this defined period without much thought about the long term or

short term cost to our business. Lets face it - the ROI is there and “best

practices” is defined in the car business by what we do with that lead

volume to convert them to sales today.



What are the long term costs of these services?

That is a question only you can answer. Each of our situations is different.

If the next thirty days is your only concern we suggest you stop reading

this now and stay inside of your thirty day trap.

If the ROI is there why should it matter how much is spent to generate

leads? With costs rising exponentially in the various classified venues they

are banking on you receiving positive ROI to help them increase their

ROI.

Autotrader.com and Cars.com have done an exceptional job at helping

dealers advertise their inventory and charging dealers an exorbitant fee to

do so and this would be ok if all they did was help you advertise your

inventory and let dealers truly brand themselves. This is not what is

happening though.

Their major branding mission is to brand themselves and that is not a bad

business model for them at all but it is for you. It would not be realistic to

expect them to advertise any other way. This helps you short term as

they get more traffic, you get more leads.

BUT…

They are doing this at the expense of the dealers that provide them

content to their sites.



Why this is so

“Content is king and traffic is supreme” is the mantra of internet

marketers.

• Without content you have no traffic.

• Without traffic you have no sales.

• But what are the 800 lb gorillas really selling?

They are using your inventory to provide content to their site and YOU are

PAYING for the right to do so. This is used to push affiliate offers that

interfere with YOUR bottom line or to additionally monetize their

advertiser base.

Leaks, Leaks, Leaks

If you will look at your listings inside of these venues you will notice

several “leaks” that may affect your bottom line.

Definition:

A leak is any actions that the visitor to your inventory item can

perform that does not directly benefit you, the advertiser.

Ad rates in newspapers are determined by the size of the advertisement

that you buy. With a full page costing more than a classified ad and the

ROI on the different size ads is huge. The reason dealers buy full page

ads and not half page ads is because when someone is looking at your full

page ad they have no other advertising to draw the reader away. That is

why you pay the premium for that full page.



Now that you are paying a premium to display your inventory in a

classified providers site but they are using it to further monetize their

bottom line.

Let's take a look at how they do this.

Cars.com

Three leaks at the top of the page (above the fold) the prime real estate

on any web page.

• Banner for 2 competitors at top and side

• Main menu for cars.com



Bottom half of Cars.com page

Major leak at the bottom - Big block of affiliate offers that are all potential

profit centers for you like –

• Financing

• Selling current car

• Bad credit financing

• Insurance quote



Autotrader.com

Again banners for 2 competitors and the links in their menu bar.

More leaks to potential profit centers on the bottom next to the lead box.



They both have ads for their internal lead programs, finance alternatives

and for the visitor to sell their current vehicle on their site. These are not

the only leaks, but these affect profit centers directly.

The others such as credit report offers, inspection services and insurance

quotes are also distractions to the person who has found your inventory

item online at their site.

Every one of these leaks is an additional profit center for the respective

classified vendor and distracts eyes from YOUR inventory, which you have

paid handsomely for the right to show there.

Profit is not a dirty word. We all live for it day in and day out. It pays the

bills.

Answer these two question though…

• If your local paper required you to place a phone number for the

local credit unions loan department on your full page ad or

• an internal ad for the paper’s classified department saying don’t

trade your car sell it here.

Would you still pay full price for the ad?

Would you even run the ad at all?

That is what you are paying for when you advertise your used inventory

at the two biggest classified vendors. Granted some of the smaller

vendors like vehix.com also have these same leaks but their pricing is a

nuisance more than an expense.



The price for a full year at vehix.com for Carl Gregory in Brunswick was

$3000 per year compared to $1400 a month at Cars.com and $2800 a

month at Autotrader.com. Your cost may be different and this is not a

pre-sell for Vehix.com, because eventually they will price themselves out

of the market too if they play follow the leader.

Finally let’s get to the real killer with using these services as they are

structured now.

As stated before the 30 day window that most operate under in the car

business allows these vendors to continually raise their prices because

dealers are experiencing positive ROI if the leads are handled properly.

But what is this costing you long term?

The biggest long term disadvantages to the dealer is that the consumer

remembers buying their car through the classified vendor’s site and

returns to them first when they reenter the market at a later date.

That coupled with the dealer negative advertising that they use to drive

traffic to their site, (remember the Cars.com Super Bowl ads), should give

you pause to consider the true value of their service and whether long

term if it really helps your business.

The fees they charge would be justified if it were not for the leaks on the

sites. While it would be impossible to get them to release this information

to the dealers, the exact percentage of visitors that complete other offers

on their site, as internet experts we know it costs YOU business and a

reduction in YOUR profit centers daily.



Actually as internet marketers we are jealous of a business model that

gets people to pay them to use their content. It is a very solid use of the

internet for Cars.com and Autotrader.com – not for you the dealer.

It is possible at some point to overcome the leaks but the branding they

are doing to generate your leads will continue to be a major detriment.

There are two solutions to wake up these vendors into being a viable long

term solution that will enhance your bottom line and long term

profitability.

1.Refuse to pay the prices they are charging you to provide content to

their site to push other products to visitors of your inventory.

2. Demand that they remove the distractions from your inventory.

Chances are they will not embrace these demands in the near future

unless dealers stand up to them in concert.

You can continue on with a mediocre product at an extravagant price and

accept that is the way it is and allow your profit centers to continually be

affected short and long term by these providers or discover a different

and better way to use the internet.

Our goal and a vision

We are working on a few systems for dealers to allow those that can

break the 30 day trap to generate leads that both brand your dealership

and create long term relationships with your brand and customers not the

big ad sites.



When you downloaded this report you signed up for our blog's update list.

If you got this report from someone else we recommend that you visit our

blog at www.dealerbytes.com and sign up for the updates there.

Remember, you can unsubscribe at any time. We hate spam as much as

you do.

These blog updates will show you how using up to date internet marketing

techniques can allow you to eliminate having to deal with an inferior

system to get the leads that you need.

We will be posting there on these topics and creating additional reports

like this to inform you about topics like…

• Using blogs and other interactive web sites

• Using search engine saturation / reputation management

• Using micro sites

• Using web 2.0 properties to generate leads for you

If you are willing to look past the 30 day trap that you are stuck in with

the major classified advertisers you will discover that you can lower your

internet expenses and receive a much higher ROI for your internet

department.

But…

It won’t happen in 30 days or less.


http://www.dealerbytes.com/


Report created and distributed by

Mike Paetzold

Paul Rushing

Creative Content Blogging Inc.

Check out our blog on this and other marketing topics for auto dealers at

www.DealerBytes.com

Feel free to leave your comments and interact with us there.


http://www.DealerBytes.com/

3rd Party Lead Analysis White Paper

Automotive

Transcript of 3rd Party Lead Analysis White Paper