Any discussion about online auto-dealer advertising very quickly turns to the question of “leads.”
In other words, is it all about delivering specific, ready-to-buy – and countable – consumers directly to a dealer’s salespeople? (Those would be called “leads.”) Or is it about delivering a marketing message that persuades consumers to choose that particular dealership.
Some online businesses, such as Autobytel.com, are built solely on the model of lead generation. As a consumer, when you check out cars on Autobytel and “request a quote,” that becomes a lead for which dealers pay.
That lead-generator model is well known to dealers, and makes it hard to discuss a marketing model with dealers. They want to compare direct results of the two models, which is nearly impossible.
Third-party sites like Cars.com, AutoTrader.com and Adicio (serving media clients via private label sites) are primarily marketing platforms, but each has approached lead-gen differently.
Cars.com has had a lead-generation business since 2005. Its pay-per-lead business is up 32 percent in 2008, compared to 40 percent for its core business.
Adicio likewise has approached lead generation as a necessary element to address dealers’ demands, and in June launched its PowerLeads Buy Program, an enhancement to their PowerLeads Program, which enables Adicio media clients to buy and sell qualified automotive leads for their car dealers. In other words, if a dealer is just getting started, or having trouble getting business, the Adicio media client can offer the dealer qualified leads from within the market, acquired from one of the lead-generation sites. The idea is to help Adicio clients retain the business of their dealers during these tough times. “It helps keep a lot of dealers happy,” said Tony Lee of Adicio.
AutoTrader.com has taken a harder line on leads. “We made a deliberate decision (from the beginning) to not go down the path of e-mail leads, and instead focus on being an advertising and marketing vehicle,” said Chip Perry, CEO of AutoTrader. “The key is not buying a lead but to influence a car shopper on a third-party site.”
Perry said AutoTrader.com has been able to validate that position with some research. Working with JD Power, AutoTrader recently examined online auto-shopper habits, and found that while the number of online auto shoppers has steadily increased to 71 percent of all buyers in 2007, the percentage of people “requesting a quote” has held steady at about 22 percent for the past four years.
“We asked people what’s the next thing you want to see after you ‘build your car’ on AutoTrader? They want to see specials, and they want to see where they can go look at that car in person,” Perry said.
“The next action the consumer wants is to walk into the dealership.”
No doubt it will take time for dealers to figure out that “leads” and “marketing” have different roles in their mix of ad spending.