3rd Party Lead Analysis White Paper


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3rd Party Lead Analysis White Paper

  1. 1. 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,
  2. 2. How the Major Classified Auto Vendors Hurt Your Online Success 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. Copyright © 2008 – Creative Content Blogging Inc,
  3. 3. How the Major Classified Auto Vendors Hurt Your Online Success 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. Copyright © 2008 – Creative Content Blogging Inc,
  4. 4. How the Major Classified Auto Vendors Hurt Your Online Success 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. Copyright © 2008 – Creative Content Blogging Inc,
  5. 5. How the Major Classified Auto Vendors Hurt Your Online Success 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. Copyright © 2008 – Creative Content Blogging Inc,
  6. 6. How the Major Classified Auto Vendors Hurt Your Online Success 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 Copyright © 2008 – Creative Content Blogging Inc,
  7. 7. How the Major Classified Auto Vendors Hurt Your Online Success 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 Copyright © 2008 – Creative Content Blogging Inc,
  8. 8. How the Major Classified Auto Vendors Hurt Your Online Success 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. Copyright © 2008 – Creative Content Blogging Inc,
  9. 9. How the Major Classified Auto Vendors Hurt Your Online Success 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. Copyright © 2008 – Creative Content Blogging Inc,
  10. 10. How the Major Classified Auto Vendors Hurt Your Online Success 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. Copyright © 2008 – Creative Content Blogging Inc,
  11. 11. How the Major Classified Auto Vendors Hurt Your Online Success 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. Copyright © 2008 – Creative Content Blogging Inc,
  12. 12. How the Major Classified Auto Vendors Hurt Your Online Success 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. Copyright © 2008 – Creative Content Blogging Inc,
  13. 13. How the Major Classified Auto Vendors Hurt Your Online Success 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. Copyright © 2008 – Creative Content Blogging Inc,