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Dealer Management | Digital Dealer | Lead Management & CRM | Technology
March 26, 2015

Third-Party Leads vs. Dealer Site Generated Leads

Posts:
Dealer Management | Digital Dealer | Lead Management & CRM | Technology
March 26, 2015

Third-Party Leads vs. Dealer Site Generated Leads

This subject causes more dealer confusion and misplaced marketing dollars for dealers than any other. Making matters worse, information in trade publications has vacillated over the past year. Frankly, metrics between these various services are not strictly comparable, but reasonable estimations can be made when dealers have the facts.

Listings services like AutoTrader and Cars.com are only as good as the inventory, pricing, and vehicle merchandising the dealer puts into them. These systems don’t provide much of anything to cause the shopper to contact the dealer, but they do provide exposure. For the past six years I’ve been advocating that these systems be compared primarily on the basis of Cost per Vehicle Details Page (VDP). The challenge here is that a VDP as measured by Cars.com is not strictly comparable to one as measured by AutoTrader or any other listings service. Still, the rule I set forth in 2009 is still valid, and if the dealer is receiving VDPs at an average cost of less than $1.00 and doing a good job with pricing and merchandising, then they are probably getting their money’s worth.

Search Engine Marketing is sold on a Cost per Click basis, but clicks are far from sales. Every dealer’s website should be able to show how many phone, chat, and email form leads are being delivered through paid search. Website providers can deliver additional content to VDPs that listings services do not. Some of these items include downloadable factory brochures and owner’s manuals, the awards and accolades the vehicle won in the model year it was created, crash test ratings, green scores, and testimonials. Ideally, the website and digital marketing should come from the same source, so the combined effort can be evaluated based on the leads and cost per sale, as well as by VDP. The math for this should come from the combined service provider.

While the results are not 100% apples to apples, the value differences are often staggering. I’ve seen dealers pay a marginal cost per VDP of over $3.00 for listings services, making it impossible for the dealer to break even on the investment. I’ve seen dealers pay for digital marketing services without even knowing what keywords they are buying. Worse, dealers are trying to drive traffic to some websites that don’t provide enough content to optimize conversion and/or don’t work properly on all mobile devices.

Add other service into the mix, and dealers’ challenges only increase. Pay per lead services have been around for 20 years, and can still be relevant. Some Cost per Sale services advertise a reasonable rate but take attribution and full payment for every sold-vehicle they touch in any way, regardless of their contribution to sale. Gino Cipperoni and I will show dealers how to compare all these services and which are best for each strategy at the 18th Digital Dealer Conference & Exposition in Tampa, from April 21-23.

Dealer Management•Digital Dealer•Lead Management & CRM•Technology

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