When ever the "cost per closed deal" conversation is brought up with Autotrader, they get very quiet. As a customer of theirs for the past 5 or so years the phone call numbers are going down year upon year. We've maintained our top tiered listing position with them but with the rising rate increases it's costing us considerably per deal sourced from them. We track all walk ins and have incentivised our staff on providing us with accurate walk in traffic sourcing. We've informed them that in order for management to most effectively spend the ad dollar to gain the most customer traffic, we need to acurately know where our walk in/showroom traffic is coming from. They've been very cooperative in doing this as it only helps them in the long run also. I'm not so sure that the added features of the past year or so have managed to do anything significant in bringing more attention to our pre owned vehicles listed with them, anyone else experiencing this? Our Rep is a good guy and looks out for us w/tips etc. but it seems even his head is spinning as to how to sell the product w/a straight face to us anymore. I'm not sure that the investement we've made w/them is paying off as it once was and I'm curious to see if we stepped down to a cheaper product w/them for 4 or 5 months we'd notice any real significant difference? other than possibly saving cost per closed sourced deals from them.

Joe Pistell,

Would like to share my results of Autotrader.com with you and what works for me in my market. Im sure I could learn some things from you as well. Contact Mr. Kershner for my info.

My responsibilities include handling all of the incoming calls and emails from AT, dealer website and GM OneSource- setting the appts, taking the appts, closing, and finally the delivery.

Obviously I end up cherry picking, and the least time consuming/highest profit deals are the used car leads from AT. Could only imagine what the dealership could produce from all incoming leads if I had the time to work properly. It's a work in progress and big paradigm shift for the dealership.

Look forward to speaking with you Joe.

Alex,

We have been on board for a long while with ATC and have experimented with almost every type of Package you can imagine from owning the top 7 makes in the area and forking out.....Gasp.... over 10K a month! Paying all of the money to still hover around $250 a lead. Deliveries were up and ROI had a growth spurt but nothing to justify the outrageous prices we were handing over. As far as the $7700 dollar mention I know plenty of dealers spending over that amount and more. We have since discontinued our top 7 make placement and consolidated to 3 makes with some verticals. We are processing a cost analysis and I dont think we are going to be players at our current rate. Now one thing can be said for sure the new 08 prices are going to be ridiculous!!!! I have spoken with several independents that are shelling out the 10K a month and will continue to do so because that is one of the only ad sources they use.

The new program is called ALPHA and it operates like it sounds. I have no doubt they plan on pitting dealers against each other for some of these top positions. The larger franchised dealers are going to slug it out for these spots. AT will continue to nickel and dime the independents with a somewhat inflated representation of what they are really receiving. I have heard estimates from Industry leaders that ALPHA pkgs may start around double what Partner pkgs are retailing for. I know AT works for us. Could they work in the same capacity for less money? YES! I think its time we start holding their feet to the fire a little. When you see your rep next time tell em you want more, that you just dont think your getting your money's worth. My rep said "Look at all the Floor Traffic and Web traffic we produce" My question is this TRULY measurable? There are a few ways of doing it but this cant be AT's only response when you are presenting your product as best you can online.

Ian,

I can't see what you're talking about in the link, but I heard about the new ad unit I think you're bringing up. It is going to allow one dealer to dominate a particular make with a big flash ad above the standards, the partners, the spotlights....everything. I can only imagine how expensive this thing is going to be!

I wonder what will be next?

On a different note, I didn't want to get into actual dollar figures - I wanted to keep things somewhat civilized, but....I had a phone call from a single-point dealer on this thread and heard he is paying $7,700 a month to have a partner listing on ATC. Is anyone else paying that kind of money? If so, do you get an industrial sized jar of vaseline with that bill? Yeah, it might be cheaper than buying a print ad, but that is leaps and bounds beyond any other online spend I know of.

Internet Jeff,
Your AT performance stats are very different than my *market experiences.

My AT shoppers are very stealth and could only be found in post sale surveys. See 6 months of 2007 Call Count Records, AT is buried in the pack:


I would like to study your marketplace. Which dealership do you represent?

Joe
p.s. Marketplaces are fluid, dynamic beasts. We all share space on AT with our competitiors, so, SIZE MATTERS.

* MY MARKET.
- Smallish market in UpState NY (300k).
- I'd define my market demographics as anything but upscale... Lunch Pail is more like it
- Small mass media budget (TV-Radio).
- It's a single point Chevrolet store w/100 used.
- 2 power players near by with over 2,000 used units within 10 miles.

This store is the classic old school family franchise operation where the property had been paid for generations ago and the last faciltites upgrade was when Nixon was Pres! hahaha...

Alex- Thanks for a great article for all of us to view our opinions from our experiences on this side of the biz. I think we all have learned much from this post and I based my opinions from results, not personal interests in gaining employment. Grass isn't always greener on the other side!

Caradgirl- Not only do I have a cute and classy AT consultant, but she also suggests dealerships to be on Autotrader.com and Cars.com to capture both types of internet car shoppers. It just happens that the majority of my current page views, emails, calls and sales come from Autotrader shoppers.

Question of post- Is AutoTrader.com worth the price hike? Yes! Im not excited about going to the owner in 3 months with a bigger invoice, yet I have the ROI to show its worth. And, it still blows traditional advertising costs out of the water with trackable 24/7 Internet Department results and that's excluding the non-sourced sales from the showroom.

Where do most shop for variety and best price on high ticket items; houses, computers, flat screens? The internet. Who is the number one online resource for automobile advertising?

That's where my money would be spent first, after a quality dealership website, then to additional online advertising sources.

Update!! (Now at 11 sales for month, 7 from AutoTrader)

Thank you for comment jp - sounds like you have too much time on your hands if you're taking the time to sit and read all these blogs. Some of us use two hands to type, read faster than the average person, and can think quick on our feet, so taking 2-5 minutes to post a comment probably isn't hurting business. On top of that, most of the dealers posting here are market leaders for their region. We're not complaining about business being down - we're talking about AutoTrader.com raising rates without adding any extra substance....did you actually read this thread?

I'm going to jump out on a limb and make an assumption with this next remark: I'm glad I don't work for AutoTrader either!

...posted from my house at 4:09 AM EST just before heading to the airport to catch a plane for....you'd never believe it....business.

You guys have way too much time on your hands! I am glad none of you work for me. I can see why you are not selling cars because you take way too much of your time to sit and write these blogs.

They are thieves but hey Kelly Blue Book listings will fix this in a jiffy right????? Spin, Spin, Spin, keep sellin' the Spin!!!!

Well Autotrader really stuck it to me. in May they called and said the prices were going to go up.They told me I could buy up to 45 select ads which i did. They also said I could have the ads until needed and the 60 day time was not a issue. Well after the 60 days were up I had 30 some ads to use. After alot of talk with autotrader they finally gave them back. Well guess what! after that 60 days I had 10 ads left and the deal we had they said is no longer a deal THEY RIPPED ME OFF. sTILL 10 ADS LEFT!!! i GOT SCREWED BIG TIME. Hey a deal is a deal what are they thinking?

Sounds like Autotrader is a bad name like Microsoft is? or Chevron? or AT&T? or GM or Ford...
Who doesn't want to pay higher rates. No One...
Who else do we gripe about... Cable company, gas companies, mortgage rates, car companies..
What does everyone think will happen when the next newest technology launches.. ie: Google... Prices will go up, traffic will go up, rates go up, traffic goes up, rates go up, etc..
I worked in newspapers back in the day and I heard dealers complain about rates ALL the time. Things are not different. Same argument, different company. Base your advertising buying decisions on who can perform, who can reach car buyers the most cost efficiently. Prices will go up... if they go down that is the time to worry about something bad going on.
BTW, KBB.com and Autotrader.com just announced a partnership... stay tuned...

AT used to be completely free in 1998. I was one of the first Non-Franchised dealers on AT in Ohio. AT WAS the best thing since sliced bread. That was nearly 10 years ago. Every single solitary year our rates go up. It was free in 1998. The rates were $250 in 1999. Then $400. Then $700. Then $800. Then $900. Then $1000. Then $1200. Then $1400. We are now paying AT $1650 per month for our package. For $1650 per month, we can have an unlimited amount of inventory listed, we get a thumbnail picture on the main search page, a useless credit application link (only bustout's apply for a loan without seeing a car), a bold logo which doesn't stand out, a few spotlight ad's which generate ZERO leads, and 9 pictures of our vehicles to be hosted on the AT site.

We track every single phone call and UP on the lot. We find out if they were stopping in because of an internet site or whether they were drive by traffic.

When I first started on AT, sales were slow...maybe 3-5 cars per month from AT. I experienced roughly 10-12 sales per month from AT around 2001-2002. In 2003, when I feel AT maximized their ROI, I was selling nearly 20-22 cars every single month from AT alone for only $700-$800 bucks. Fast foward 3 and a half short years and I am back to selling 5 cars per month through AT and spending $1650 to do so. Now in the relative sense of advertising, $300 per vehicle for advertising isn't a horrible number when you are grossing $2000... But it is nearly impossible to have that kind of gross when advertising on AT.

Do a search on AT for a 2004 Jeep Grand Cherokee within 50 miles of your dealership. I just ran that search and there are TWO HUNDRED AND THREE 2004 Grand Cherokee's that come up. How in the world is an internet shopper going to land on my vehicle. To try to combat this problem, we've priced our vehicles so low online to get the customers in our door. Now we've eliminated our gross, but in many cases, we DO get customers in the door. Now the problem is the customers want to negotiate. It's a big problem since I am averaging $1000 gross per vehicle advertised online. So then we lose the sale because the customer wants to haggle, and we have no room left...

AT was great when there was little or no competition from other local dealers. Eventually, all of the dealers figured out AT was the biggest and best site to list their inventories on. It was the biggest bang for the buck. In 2003, they were on top of the world. But as nearly every thread on this site has pointed out, those times have come and gone and all that's left are extremely high monthly fees and very few sales.

Internet Jeff: You said 4 of your 8 sales this month are from AutoTrader.com...I think that you are in the minority and are extremely lucky.

We take 9 excellent pictures and we write excellent ads for each and every vehicle we list...but AT just isn't giving us back the ROI we became used to and now expect. The real question is what do we do now?

We were on Cars.com from 2004-2005 for 18 months. We were paying Cars.com $1100 per month and experiencing less than 2 sales per month from their site. I am not sure why it took us 18 months and $20K to cancel our contract. Cars.com rolled out some newer more attractive products and as our sales flatlined in early 2007, we decided to give them another shot. At $750 per month, it seemed like the 2 sales a month would be worth it...and of course we were hoping for more. We are still only averaging 2 sales per month over the last 4-5 months from Cars.com....

Going back to the original question: What do you think of AutoTrader.com's price hikes?

I am extremely unhappy about it...but I have come to expect it every year. Who wants to pay more and more each year for less and less?? As long as we the dealers pay their rates, AT is going to continue raising them....and can you blame them? It's just like the oil companies that are gouging us for gasoline...we aren't happy to pay $3 bucks per gallon...but what other choice is there???

ATC management like lemmings are walking straight into the flames of collapse, you can smell the fear of the unknown anymore. They've asked too much and delivered too little. I predict they will shed reps enormously after Jan 1st. Dealers have had their fill of the double speak, even their own sales reps don't believe it!

Internet Jeff: 1)you sound like you're a green pea 2) you must have a cute AT rep because you are blind to what is happening around you.
The Titanic (a.k.a. AT) is seeing the fallout begin. Not only did dealers see a rate increase recently, you're about to see another one and you won't even know it. New contracts allow AT to raise your rate without you even knowing it...in some cases 60%. Cars.com is closing the gap. AT keeps touting the JD Powers survey: their score was 682 (out of 1,000) and Cars.com's score was 678: 4 points difference. Considering the fact that Cars.com costs less and yields the same results, where is the REAL dealer satisfaction in comparing the two? And...go to JD Powers and see who powers their online classifieds. It's not AT. As a former Internet mgr, wholesaler, and now Cars.com rep, I have seen the growth, I have seen the AT greed. Can't wait to see them price themselves right out of the market and on to the street. They have and are losing their best reps that have been there from the beginning due to changes in pay structure. What they do is outline a new pay plan, tell you to sell it, then change the pay plan to benefit themselves. Now, not only are they taking dealer profit, but employee profit. Chip Perry: how do you sleep at night? Your pigs are getting fat, but you're about to get slaughtered.

When I was in first grade I saw Charlie and the Chocolate Factory for the first time and after seeing the Oompa Loompas, I was instantly in love.

I asked my mom what kind of people the Oompa Loompas were, because I just had to have one. She looked at the television and said "I don't know. Must be some sort of pygmie or something."

Sounded good to me.

A few months later my first grade teacher asked our class to write our Christmas lists to Santa. Of course the #1 thing I wanted was a pygmie. Well I never got my pygmie. All I got was a meeting with my parents and the teacher. At the time I still believed in Santa and thought he was a big fat RAT!!!!!

As far as ATC-no comment-lol

I worked there for almost 4 years.... I can tell you that priority #1 for ATC is 5x.. they want to be a 500 million dollar co. by any means necessary (they might be already or pretty close). During my time there I saw 4 rate increases. Thye have no plans to stop increasing rates.

Funny, I see Cars.com on the TV all the time AND the local paper has Cars.com ads everyday. Soon cars.com will have Yahoo! auto channel which, unlike MSN, has had large increases in traffic. People go to MSN for two things, search/homepage and Hotmail. AT is falling behind with out dated partnerships that have a name (maybe for car buyers or maybe just a name) but, do not drive traffic of car shoppers. I'd rather have a 3rd party that changes with the industry and is effective. Not to sound like a cars.com ad, but they buy key words on all engines and have bigger budgets to do so than I. All the dealers on a 3rd party gives strength in numbers and I like that strength.
All of this isn't bashing, it is just that dealers are realizing what is going on and through communication, can all share what they know.... and that is AT is becoming a dying entity and this price hike is to get what they can, while they can.

I'd love to be a fly on the wall in the corp offices of ATC after reading this thread!

David - that's too funny. I'll be in Baltimore November 18-20th - maybe we should all catch up Monday or Tuesday?

Jeff - Are you getting ready to go work for Autotrader.com?

Dear Cars 3.0 employee,

Let Autotrader.com raise the rates. The last time I attended a professional baseball, football or basketball game I didn't see any Cars.com advertising. We pay for what we get back. Hmmnn...

How many internet marketing resources does Cars.com pay for to be easily found by the consumer searching for their next vehicle? KBB (lol!!), NADA, AOL, Edmunds?

In a non-newspaper affiliated/Cars.com market, when have I have seen a Cars.com rep come into the dealership and help educate management on the benefits of their advertising service and show their results, or assist a fledgling internet manager produce more results from their advertising?

Or upon contract signing, send an associate to the dealership's lot to do an intitial photo upload free of charge?

ATC is infamous for billing screw ups? Is this based on experienced or just heresay?

Wait until the last days of the month for the best deal? Lol... Proof is in the pudding. Contact me through Mr. Kershner and show me the difference of an initial contract proposal and a signed contract for monthly service for the same account.

Beyond all the ATC 'bashing' on this post, I have proven results from ATC that as of Nov 9, 2007; 4 of my 8 vehicle sales for the month came from Autotrader.com consumers so far.

Cherry on top... I don't pay for the advertising out of my pocket. All I know is how many customers it drives to me every month. My cost per vehicle sold via online advertising is exceedingly less than traditional dealership advertising costs of newspaper, tv or radio. Oh, but wait... how do you track those sources?

If they don't find your vehicle online, they will find your competitors. Autotrader.com is the #1 resource consumers use first to find and/or research their next vehicle.

Post an Autotrader blog entry on DealerRefresh= 3 psychotic calls from my AT rep

Alex Snyder raising the bar with his additions= 4 more calls and emails from AT higher-ups

look on Chip Perry's face when he was asked about the blog....priceless!!!

Three things with Autotrader.com

1. They aren't thru raising your rates yet, wait a couple months, more to come!

2. Watch your billing carefully, they are infamous for really historic billing screw ups that can take months to rectify, credit promises not paid, proration discounts never applied, etc.

3. Wait until 4 days left in the month to sign a deal then hold out and keep holding until they concede.

Ahhh, I thought it was weird that you couldn't recall the name of oompa loompas. Ok, so Mike Teavee was a good reference...our Rovion Lady is very much like a Mike Teavee, minus the fact she is female and an adult. And it is not that anyone "plays" with her (that would be creepy and weird and I would not want to know about it), she tells them what to do. It is interesting - when you give people instructions, more often than not, they tend to follow them! Maybe not accurately, but they can get the basics!

Mike Teavee was the kid from Charlie and the Chocolate Factory that used the chocolate television room to shrink himself down to about 2 inches...perfect for a website!!

The poor Oompa Loompas had their work cut out for them when they had to stretch him back to regular size.

WHOA!! When did the AutoTrader.com post turn into a 'land of pure imagination'??

I stand corrected. If your lead and service conversion ratios have increased 300% because of your Oompa Loompa, maybe every website should all get a friendly little guy to play with!!

I love Walt Disney World and Charlie and the Chocolate Factory! Perhaps if I was a "Professor," I would have more refined tastes. However, our mini Charlie and the Chocolate Factory person (for future reference, they are called Oompa Loompas in the book) upped our lead and service conversion 3 times...go figure.