Relative Value: Cars.com, AutoTrader.com, and Alternatives

Recently, I've witnessed wild differences between the value being received from Cars.com and from AutoTrader.com in the Northeast region of the country. This is a region where Cars.com performs very well, yet it is AutoTrader.com that receives the higher rate, as much as three times higher. Dealers need to be more careful about how they spend their marketing dollars. I've seen instances when there is no way to justify the additional cost of going Alpha or Premium on AutoTrader.com, yet it was done. There will be cases where Cars.com's new Premier product does not pencil out either, but there are also cases where these products make all the sense in the world for the dealer buying them at the price being offered.

Dealership sales teams tend to have a one-word answer for marketing solutions, "more." If it brings any more traffic to the store it is better to have it than not have it from the eyes of those working on commission. The biggest drivers of traffic often appear indispensible. This is how many markets newspaper prices were jacked up to ridiculous and unjustifiable rates prior to the internet. It is what happened to AutoTrader.com prices in some markets today.

I've gone on and on about the relevance and importance of Cost per VDP as a value metric for traffic-now advertising. That only works after the fact, and most dealerships don't have good analytical tools for a priori evaluation, so one might excuse the purchase of advertising products that to the trained marketer were clearly destine to fail. However, there is no justification for continued purchase after they have failed relative to the prices being charged.

Driving traffic to the dealer's website through pay-per-click and SEO are perfectly good alternatives to AutoTrader.com, as are pay-per-lead services. In some markets, CarSoup or local newspaper sites are a reasonable value. No vendor can hold your marketing dollars hostage if you truly work the numbers and listen to the alternatives. Without good analysis, canceling a product that is providing a good value can be worse than buying something that is not returning a value. In far too many cases, dealers are only pretending they know the difference between the two.