AutomotiveDealership Marketing
Written By Quincy Armstrong
Am I spending too much on AutoTrader? How is Cars.com performing? Do I have the right CarGurus package?
In 12 years of auto retailing marketing, without question the most debated item on a dealership’s budget is its spend on 3rd party vehicle listings sites (automotive marketplaces). Dealerships spend anywhere from $2,000 - $20,000 per vendor month on 3rd party websites with little definitive sales attribution. Unlike dealership brand or digital campaigns, these websites are not designed to drive loyalty or differentiate a dealership from its competition. Instead, the true value of these products is reach. Ideally, efficient reach among “in-market” shoppers.
Each of the three main providers each has its own product and sales strategy. This series of posts will analyze the strengths and limitations of each providers and layout a strategy to make the right decision regarding providers and budgets for your dealership.
AutoTrader
Brand - AutoTrader has historically been brand leader in the category going back to the mid 1970s with is print magazine. AutoTrader has been an active TV advertiser and has a strong presence in sports with advertising campaigns in nearly all professional sports and an ongoing advertising partnership with the NBA. With their latest TV creative, AutoTrader tried humor, with the “Finally It’s Easy” campaign featuring people from 18th century France and the middle ages discussing how easy it was to buy a car on AutoTrader. The campaign has been updated since COVID-19 to “Finally It’s Easy (From Home)” to highlight dealerships that are now offering home delivery.
Shoppers - AutoTrader has sold dealers on the quantity and quality of their shoppers over the years and has steered away from talking about leads. Dealers wanting more leads were commonly told that the vast majority of AutoTrader shoppers walk into a dealership with no prior contact. AutoTrader research from 2011 showed that up to 80% of shoppers did not contact a dealer prior to visiting.[1] This stat decline to 50% in a 2018[2], and lately AutoTrader has focused on shopper quality stats instead of shopper quantity. AutoTrader receives approximately 20M unique monthly shoppers to their website which puts them close to the same volume as Cars.com and at roughly half of CarGurus’s reported volume.
Engaged (quality) Shoppers - Lately AutoTrader has an initiative to promote the quality of their leads vs the competition with a 2019 study of VinSolutions CRM data showing that their leads convert at a rate 60% higher than the industry average. Counting only email leads, this study showed AutoTrader’s sold rate (7.6%) to be higher than Edmunds (6%), CarGurus (5.3%), TrueCar (4%) and Cars.com (3.8%).[3]
Shopping Experience – A valid critique of AutoTrader has been the over-segmentation of their search results with several tiers of inventory designed to capture additional fees from dealerships. While consumers prioritize relevance, (make/model, color, price, distance from home) AutoTrader has presented listings based on premiums paid dealerships for a “alpha” ad positions or elevated “featured” or “spotlight” positioning in search results. Both AutoTrader and Cars.com have followed CarGurus’s lead by labeling pricing as Good or Great, with AutoTrader’s labels corresponding to KBB used car values.
Selling Experience – Dealers are accustomed to receiving “white glove” service from their local AutoTrader representative with frequent dealership visits and a variety of reports to justify the premium prices and upgrade options AutoTrader sells.
CarGurus
Brand – CarGurus has had a strong search presence with an advantage over other providers in organic search rankings and traffic. CarGurus is emerging as the new brand leader among 3rd party advertising solutions and has added a significant brand presence on TV, outspending AutoTrader in early 2019 with $6.6 million spend in January and February compared with $5.5 million for AutoTrader.[4]. CarGurus has focused on the consumer frustrations with the difficulty of shopping for a car in their ad creative with “The Detective” where a man has outlined his car shopping with a complex diagram as complicated crime would be analyzed, and recently “The Less Painful Way” features a dentist explaining that people would rather visit her than shop for a car.
Shoppers – CarGurus boast the largest monthly shopper volume among the three major listings sites with over 40M monthly shoppers.[5] CarGurus outspends both Cars.com and AutoTrader on paid search. In Q1 2019 CarGurus captured 23.7% of Desktop used car search volume vs 19.5% for AutoTrader. On mobile search CarGurus also outspent their competitors capturing 23.1% of used car search vs 13.2% for Cars.com.[6]
Engaged (quality) shoppers – CarGurus says they have the highest average time on site per shoppers at 21 minutes vs. 14 for Cars.com and 11 for AutoTrader.[7] They also boast the highest engagement in terms of “Connections” with 62M in 2018. Connections include email, chat, phone and text leads plus map views and website clicks.
Shopping Experience – The shopping experience on CarGurus is very price focused with their algorithm placing heavily discounted vehicles at the top of search results with very conspicuous pricing labels (Great Price, Good Price, Fair Price, High Price, and Overpriced). A common critique from dealership sales managers is that the platform does not fully consider all options and reconditioning when comparing similar vehicles. With hundreds of trim levels and option combinations available for most brands, it’s key for any dealer advertising on CarGurus to ensure all trim and option information is included in their inventory feed and not rely solely on VIN decoding when merchandising their inventory. To a certain degree, CarGurus has trained shoppers to consider significantly discounted vehicles over those that have lots of options or extensive reconditioning. Also factory certified vehicles are not prominently merchandised with factory CPO logos on listings pages and details pages as they are on Cars.com and AutoTrader.
Selling Experience – CarGurus has a much smaller field sales team than AutoTrader and most dealers will hear from their representative a few times a year and when rates increase or new products are available.
Cars.com
Brand – Cars.com has historically been a good alternative to AutoTrader for dealers looking to market their inventory to a large audience. Like AutoTrader, Cars.com runs nationwide branding campaigns like their “Confidence” campaign from 2012, Drama from 2012-2014, and more recently the “Moment We Met”. Even though they have run commercials in the Superbowl and other high profile events, Cars.com has not been as aggressive as AutoTrader with big sports sponsorships.
Shoppers – Cars.com claims 22.4 million monthly unique shoppers[8], putting it second behind CarGurus with around 40% fewer shoppers. Cars.com claims to have 23.6% of the auto shopping market vs. 26.1 for CarGurus, and 16.2% for AutoTrader[11].
Engaged (quality) shoppers – A Cars.com study showed that 81% of its shoppers buy a car within 6 months. Additional studies conducted with Google and Dealer Inspire website traffic showed that Cars.com shoppers who clicked on a paid search ad are four times more likely to visit a dealer website and 6 times more likely to convert to a lead.[12]
Shopping Experience – The shopping experience on Cars.com is similar to AutoTrader, with a “featured” dealer paying premiums for inventory to show at the top of search results pages and the rest of inventory presented in order of relevance.
Selling Experience – As Cars.com has changed ownership over the years, so also has their approach to field sales. When owned by Classified Ventures (a joint venture of newsprint companies - Gannett,The McClatchy Company,Tribune) Cars.com was sold by local newspaper representatives. When Cars.com was spun off into a separate publicly listed company they established a direct sales team similar to AutoTrader, with similar levels of support including frequent meetings with dealership management and reports highlighting the levels of shoppers, VDPs, and “on-site” mobile shoppers. (shoppers at the dealership viewing inventory on Cars.com)
Even though there are many similarities between AutoTrader, CarGurus, and Cars.com, the differences between their brand positioning, tactical marketing (SEM, SEO and other traffic growth efforts), and the consumer shopping experience all have current and future impacts on dealership clients. All three companies not only face increased competition from each other, they also compete with Facebook and Instagram advertising which many dealers execute themselves or through agencies, paid search, display advertising, content marketing and many other channels which drive traffic directly to dealership websites. Street Smart Retail will continue to analyze these companies as they evolve and compete for shoppers and dealership and OEM advertising.
[1] https://www.quirks.com/articles/how-autotrader-com-uses-primary-research-to-clarify-the-car-shopping-process
[2] https://b2b.autotrader.com/oem/wp-content/uploads/2018/03/2018-Cox-Automotive-Car-Buyer-Journey-Brochure.pdf
[3] https://b2b.autotrader.com/news/view/the-high-cost-of-poor-quality-leads/
[4] https://www.kantarmedia.com/us/thinking-and-resources/blog/adg-car-advertising-on-tv-and-in-paid-search-2019
AutoTraderCarGurusCars.com3rd party automotive websitesauto dealership marketingautomotive classifieds
Quincy Armstrong
