Your concept relies on all dealers not providing prices quotes over the phone. I know many that do currently and more that are moving that way. It's up for healthy debate but I wonder if consumers are willing to pay you for the privilege of paying you.

All lead sources provide the same thing, it's how you respond to a lead that effects the ultimate outcome. I keep perspective by understanding that sales, in a nutshell is a numbers game - period. However as an outside the box type of guy, I really think consumers will eventually pay for a quote, and I'm creating the model for it now. It makes sense because if they (the consumer) know they would be getting a for sure, ultra low and very competitive price with full details on the vehicle, they'd pay to get it... versus what they really get now, hoping that their free quote request will be replied to. I know that in my market, I'm the only guy with my brand to make real follow up calls, and follow up emails hand written, versus the other guys who still send the same boring emails devoid of any substance - asking them to call them to get the information they requested. I'd be willing to try to get customers to pay for a quote. It's unchartered territory, but isn't that where entrepreneurs like to roam?

Hi Folks!

Great topic and some excellent commentary thru out.

I'd like to offer my own comments- if I may.

What Jeff is saying is exactly right about Lead Provision and Aggregation. Dollar cost per leads had their place in the evolution of the digital space. But that time has past.

Let's be really honest about a 3rd Generation in Market Digital Car Shopper. Do we think they want the Dealer to be in control of the process? How many of these shoppers go into the Endemic sites, search engines, software programs and then outright refuse to give up their Name-Email Address and Phone # in lieu of going directly to the dealer to control the process themselves? I'll give you a hint. It's more than 75%. (3rd Gen Folks here--which are the people we should be concerning ourselves with)

I think we all know the reason why this has become the norm.

So what to do?

The answers are littered thru the comments in this section.

The buzz word is TRANSPARENCY!

Tell your vendors you want this:

*Click stream Data up to 60 days from first visit measuring any/all transaction.

*Microsites(Landing Pages) Built into all Banner Ad Campaigns specific to the path of the site visitors intent(ie Used Content for a Listings shopper)

*Web Based Real Time Analytics with log in for multiple parties at store level(Customizing for supreme granularity, or basic overview)

*Rich Media Ads Enabling Video-Direct Text Linking(SEO)and most importantly Pixel Tagging.

*Co-OP Support and Approval

*Thank You Pages and Follow Up(Calls/Emails) from the Vendor/site to all Shopper generated lead submissions(transparent to the Dealer)

*Endemic Auto Site Lead Programs directly indexable by the Major Search Engines

The sooner we/the Industry start giving you this kind of transparency, the faster you will maximize your digital spend and truly realize the power of this medium.

This is what I want from a 3rd Party Vendor assuming tools, processes and trained personel are in place to accomodate at dealership.

ROI: 10% sold ratio new/used with grosses accordingly to franchise and market.

Quality lead scrubbing: Ex: Calling a phone number and it's disconnected, sending the perfect email to an address that's non-existant, or receiving a new car lead from 250 miles away, unacceptable.

Acceptance of bad leads: Don't charge me for all the leads this month, then subtract the "accepted" bad/duplicate leads on following months bill.

Ease of return bad/duplicate leads from any CRM tool to vendor, not faxing, calling or otherwise.

Marketing: 1. Exact knowledge of how the Vendor produces their leads. What are the URL's customers click on to produce a lead? If a General Manager knew it was CarsBelowInvoice or WhyPaySticker . com, that contract wouldn't go very far. 2. Is my dealerships new vehicles exclusive to a certain mile range?

I dont consider ATC or Cars.com online advertising as a 3rd party Lead Vendor. The best ROI I've experienced from a 3rd party lead source is clickmotive, hands down.

McCoy and Billy: It's been my experience that you're both right.

What you both are talking about is lead funnel analysis. Car shoppers use more than one method to contact multiple dealerships when given the opportunity - and they have plenty of opportunity.

Billy, your results of leads closing is incomplete unless you are properly identifying every step the prospect created during their entire sales process.

McCoy, you are way off base if you think you are not a lead provider... you are an email lead provider, a phone lead provider, a walk-in provider - all that matters to the dealership is the fact that they give you inventory and you provide them leads in multiple forms.

The better debate would be effective measurement and optimization of each of a dealerships funnels to increase ROI.

Lead providers in all forms can better enable dealerships to work with them by providing more information about where leads come from so that empirical tools can be employed. Getting back to the idea of this post... more transparency please.

Mike / Carfeine.com

Billy:
The leads from your own website are ALWAYS going to close at a higher clip. That doesn't mean that those leads are exclusive to your own website (meaning your website didn't originate the consumer). If a consumer saw your vehicle on a third party site (lets just say for the sake of argument your name was Billy Ford) and then decided in the next day or two to come back to that vehicle, but instead of going to the third party site they thought, hmmm his name was Billy Ford, I wonder if there is a BillyFord.com or if there is not I know I can google it. That way I won't have to sift through all the other vehicles to find it again. BOOM! Now the consumer is at your front door and ready to learn your hours, your salespeople, your history, and come buy a car. People that go to your website are usually in the final stages of purchase. It is where they start their search that doesn't get credit. You, the dealer, don't want to know that a consumer went to your website, contacted through it, and then bought a vehicle, do you? I would think you would want to know how they arrived at your website. I may be wrong here, but I don't think people just wake up and go to BillyFord.com. There must be some kind of call to action(advertisement). The great thing about Cars.com and AutoTrader.com is that people that go to those site are only looking for one thing, a vehicle. Those two sites dominate the online used car marketplace. You do believe that most of your consumers are finding you online now, right?

Saying that the leads on your personal website are the best to you REP is the same difference as you not allowing your REP to say "We are not a lead provider." In my case, and I sell for Cars.com, I AM NOT A LEAD PROVIDER, but I do sell a "lead-providing" product, ha! You, the dealer, create your own leads and are not relying on me to provide them to you. If you are sitting back and waiting for AutoTrader.com or Cars.com to provide you leads, then other dealers are taking advantage of you. My job is to put your inventory in front of as many car shoppers as possible and then let them contact you in any way they seem fit (email,phone,website,walk-in). The analogy of comparing Cars.com/AutoTrader.com to a billboard is ridiculous, unless of course you live in a town where everybody that drives down the road is a car shopper at that moment. If so, I think all the dealers on here want to relocate to your town.

Also, I know you were kidding when you said that "My willingness to be on these vendor sites has everything to do with the fact that my competitors are on there and nothing else."...right? If not, there are plenty of one-liners that will fit here (insert one to your pleasing).

This is a great topic and I have enjoyed learning some of the things dealers expect and want from us as third party vendors/salespeople. I will keep telling my dealers that I am NOT a lead provider even if they think otherwise. I love what I do and my dealers know that. I expect them to have the same passion about their business as I do. Yes we will butt heads on occasion, but we can also learn from each other and try to understand our different points of view.

I got to eat dinner now.

McCoy

I do agree with much of what's been said here but have to add my .02.

As I mentioned in a post a couple of weeks ago, how you handle the vendors such as Autotrader and Cars.com depends on your biz model. If you're interested in branding your particular dealership, and you're willing to get the mack-daddy premier package, then open the wallet and spend away.

However, if it's the bang for the buck you're looking for, i.e. - leads, phone calls, walk-ins, you can't beat your own site/s.

My willingness to be on these vendor sites has everything to do with the fact that my competitors are on there and nothing else. I could care less about the branding aspect. My reps all know not to use that "We're not a lead provider" line with me.

My opinion on the branding you get with these sites is about like having a billboard on an interstate where the traffic is always 75MPH. With another billboard over yours, under yours and right behind it.

We close our website leads at a much higher percentage than any 3rd party lead provider or marketing site so why shouldn't we put more focus there?

After all, you're the only billboard on that particular interstate.

I concur with this statement and one we all should visit when salary time comes around.
"Additionally the shopper can simply go directly to the store without leaving any evidence to demonstrate that it was the dealer’s listing on Cars.com that sent them. This makes it impossible for Cars.com to be compensated on a per sales basis."

Dennis - thanks for posting. Jeff and I were just talking about your comment and we both think it is awesome you decided to let everyone on Dealer Refresh know Cars.com is listening! We both thank you.

We also hope you've started a trend.

Thanks to all for your input on this extremely important topic! In the spirit of openness, I am the VP of Advertising Products for Cars.com and received Jeff’s okay before making this post to express my appreciation. I have been and will continue to be reading carefully.

Since Cars.com is the only company offering both 3rd party leads (through our NewLeadsPlus product, not associated with the Cars.com website) and inventory based solutions (through our core Cars.com products) I am grateful for the fact that the bulk of this discussion has distinguished between the two.

Leads services like Autobytel, AutoUSA, Dealix, and our own NewLeadsPlus product are a bit antiquated, as Jeff points out. We have enhanced the value of our offering relative to others by limiting the leads sources to search and in-market automotive sites like kbb.com, Edmunds.com, and NewCars.com, but I certainly don’t expect this product category to remain unchanged for another 13 years. Mike points out the desire for the IP address and click-stream data. That, of course, would need to be optioned into by the consumer because of privacy but is something we will investigate and work toward. Other ideas are extremely appreciated.

The core Cars.com product is a subscription service, because most consumers never submit a request for quote through any site, as pointed out by Jeff. By not having to put our stamp on a consumer in order to monetize them, the shopper is free to contact the store by phone, email, or website transfer. Additionally the shopper can simply go directly to the store without leaving any evidence to demonstrate that it was the dealer’s listing on Cars.com that sent them. This makes it impossible for Cars.com to be compensated on a per sales basis. Having read Mike’s post I will increase our efforts toward greater measurement of performance on all fronts, including walk-in traffic.

Many thanks for the recommendation regard secure credit applications (SCA). Our new SCA is our fastest selling product. However, it does not load directly to the CRM system, and we are scrambling today to change that if at all possible (thanks Chris). We will continue to focus on dealers offering BHPH and help dealers reach those consumers and we are working toward enhancing our product offerings specifically for those dealers later this year, but I agree with Chris on the desire to have it even sooner.

Cars.com certainly strives to be supportive of dealers, and that starts with listening to them. Thanks to all for extremely valuable input.

Found a screen cap that summarizes the significance of a Autotrader's "leakage" as mentioned previously. I'm aware the vast share of their audience is concentrating on cars within their respective DMA/zip, but how much of this "leakage" is really happening? I'd like to see more "local" promotions on pages, lets get more "local" oriented with "local" landing pages on classified sites. Login to view embedded media View: http://www.flickr.com/photos/21147718@N02/2346794830/sizes/o/

One thing I would like to see from the current vendors I use is a discounted rate or a credit for leads that do not provide a valid phone number. It is not a common issue but it does exist.

---No hard feelings I hope, just drastically different viewpoints.---

Absolutely no hard feelings. I don't even know who I am talking to.

Almost all UCG style sites have advertising on them and some exist so people users can profit from their use.

Eventually there will be a happy medium in this arena, but current models are just not very supportive of dealers.

---Paying to provide content to a website that they monetize in ways that do not benefit you is ignorance of acceptable standards.

Not trying to be argumentative, but "acceptable standards" would be what the two parties enter into at the time of a business relationship, correct?

Last thing and then I'm done. I already feel like I hijacked this thread. Please don't block me Jeff.

---Just think if all user generated content sites charged for admission. How successful they would be?

Same concept different venues...

Again disagree. I have the most viewed videos on youtube open and, oh my goodness, not a single advertisement. I've been through 7 pages and not a single one of them are encouraging me to make a purchase. Crazy! Could it be that most of the people going to this site aren't looking to buy anything, and the vast majority of people supplying the content arent selling anything?

Different venues, Totally different concept!

I assume that all the content you are generating and sending to cars.com and autotrader is for the expressed purpose of commerce. And likewise, the users that get on those sites are at least somewhere in the process of researching and buying a car.

With the exception of Craigslist, and even that one in a few markets that now charge for employment and realestate listings, the user generated content sites are not designed to benefit the user that supplied the content monetarily. I think that your argument against the monetization of user generated content is neutered when you consider the supplier and the end user's expectations.

No hard feelings I hope, just drastically different viewpoints.

consumer pay for a subscription? Like consumer reports? You can't get anything for free from consumer reports.

JL The point is what is the accepted standard today may not always be the case.

However I disagree with this statement:

"I respectfully disagree with the assertion that substantial value can be derived with nominal investment in any medium."

It is proven wrong time and time again in niches outside of the automobile industry and to some extent inside of it.

Paying to provide content to a website that they monetize in ways that do not benefit you is ignorance of acceptable standards.

Just think if all user generated content sites charged for admission. How successful they would be?

Same concept different venues...

---see if you can figure out how ludicrous the opinion given 13 years ago is today..

Actually, before aol was the internet it was bbs servers, and yes, I remember! No doubt the landscape has changed. Linkway on a 386 is a distant memory and a 14.4 baud modem won't handle the flash on the sites these days. But I think you know that was not the point I was making.

Since the first caveman started exchanging shiny rocks and a dull stick for a pointy one from the guy in the cave down the dirt trail certain things have had more value than others because they were more effective.

I'm not talking about a decade of technological advancement, surely the stuff we do today will be equally as foolish to us in another decade. I respectfully disagree with the assertion that substantial value can be derived with nominal investment in any medium. Since the modern era of mass marketing somebody foots the bill regardless of medium or industry. From your comment, I'm still not sure how you see it differently?

I think Dealers want more-better leads. Unfortunately, the market is only so big and only demands so much. Dealers want ways to work leads better and longer. Leads are increasingly becoming more important because sales are slow. I think Dealers want lead scoring but there are issues to address first.

----At the end of the day "it takes money to make money" and maybe I'm not a visionary, but I just don't see anything on the horizon that is likely to change that.---

Remember the day when AOL was the Internet?
Are you old enough to remember when Word Perfect was the standard?
Do you use IE browser only?
What happened to 5.25 and 3.5 floppy disk?
What happened to all of the stock brokers that guided your daily investments?

Look around you the online/computing world is very fluid and what was standard quo yesterday is now a memory. I suggest you read this article. http://www.newsweek.com/id/106554/page/1 and see if you can figure out how ludicrous the opinion given 13 years ago is today..

Paul

Mike Muncy writes:
Instead of being charged to send your inventory and descriptions (the valuable content) to a site like cars.com or autotrader.com? Why are the dealerships not getting the service free - oodle.com or vast.com ...

Pete Says:
So nobody say first "they are already free listing services"...I know that but none have any "wind" ...Does anybody know of the one that just spent 6million in six months and is gone already?...Kaboom! and they will both be gone once someone gets enough wind at their back to offer the listings for free.

Not sure about you, but my mother always told me "if it sounds too good to be true..." and I'm sure you know the rest. If you are holding out hope that a new start up is going to come along and advertise all of your vehicles with customized video presentations, secure credit apps that integrate with your CRM and, hell, detail all of your cars before they take 47 photos of them and all at no cost to you because they "need" your inventory, I'm going to suggest that you don't hold your breath. That makes as much business sense as a dealership giving away cars to build brand loyalty.

The "wind" behind autotrader and cars.com is gale force. 6 million over six months? You have to lay 6 mil in 60 seconds to be a player at these tables. The tables for usedcars.com, myride.com, vehix.com, web2carz.com, getauto.com, peachstateautomall.com and pleaselookatmyFREElistings.com have a small ante and an equally small pot to be won.

I'll finish with this, if the maxim that Paul presents, "Content is King and Traffic is Supreme" is true, then Content and Traffic must co-exist for success to be possible. Free listings mean lots and lots of crappy content, if it were free fringe dealers would upload 100% of their inventory which would degrade the buyer pool i.e. craigslist. A barrier to entry, not a gouge, is a good thing for those that can afford to be inside the fence. The retail buyer (non-craigslist) seems to know the difference between these sites and shows a strong preference. But the real issue here is traffic, and just like every other medium, traffic is not free. There are real costs to providing effective products, that's why so many have tried to knock autotrader off the pedestal with the free listings model and failed.

Paul, you complain about leakage and suggest that inventory should be free, seems to me that you inherently must have one or the other. There are 3 options, the dealer pays to be on the site, the site is paid for by interuption advertising as in TV and Radio, or the end user uses the site by subscription which isnt likely, what am I missing? Looks to me like the cost of both of these sites are split between option 1 and 2.

At the end of the day "it takes money to make money" and maybe I'm not a visionary, but I just don't see anything on the horizon that is likely to change that.

JG - thanks for the definition. We know what 3rd party lead providers do. This is a discussion to say what we would like to see changed about them. Do you have anything to add in that regard?

RE: 3rd Party Leads.....

3rd Party leads provide access to some of the most trusted and branded websites in the world. These sites spend large amounts of money to be of value to the purchasing public. Much more than Dealers can get thru their own marketing SEO/SEM efforts. And they are unbiased for the most part. They provide valuable information to the consumers.

3rd party lead providers move these leads to the Dealers in the most efficient manner possible. Without these leads the Dealers would have few prospects in their sales funnel. Each 3rd party provider has different features and benefits all of which allow the Dealers to do their jobs more efficiently - thus lowering the costs per sale.

There are 3 big Lead Aggregators - Dealix, AutobyTel and AutoUSA.

As for AutoTrader and Cars.com, both are price gouging and supplying Dealers with reports to justify their value. It is advertising but bottom line - what is the ROI. The value is in delivering good leads to Dealers and inturn, the Dealers being able to justify the ROI. Paying $1400 for 14 leads translates to $100 per lead. From there, look at how many leads actually purchased and then what is the ROI per lead or program. Some cost $3500 but do not guarantee any lead volume.

The newest player is www.UsedCars.com which is based on a per lead charge. Lead costs are $25 per lead. Plain and simple. It's the lowest cost per lead model available (I think).

----From Classified Sites, what do I need? I want *Web 2.0! I need them to give me tools to create content, then get out of my way!---

This is already being done it is just unfortunate it is not in a classified vendors style site. I was able to sell 8 used cars that was directly attributable to one page because I was able to get instant SEO from this platform for the term "Market Area Brand" searches for a brand we do not carry, which was also the name of a local dealer.

It was a little work. Maybe 30 minutes to set up and 5 to 10 minutes a week to maintain.

Best of all it is free and the traffic is monetized. :P

wish the videos were a little easier to find on atc