RE: Long story short: AutoTrader knows that the worst thing to happen to them from their rate hikes is that a bunch of dealers show up on DealerRefresh to complain about them. Big deal.

If we get the word out to as many contacts in the industry about dealerrefresh.com as we can it will become a big deal.

I have spread the word as much as I can. I think Jeff has created one of the best forums in the industry for ISMs, GMS, GSMs, and anyone working in the industry to express their thoughts, opinions, offer advice, and share industry information for all of us to be successful in any aspect of the auto industry business.

We plan on cancelling autotrader.com in mid November and will not entertain getting back on until they begin their national advertising campaign again next Spring. They've brought little or nothing to the table for us in the Winter months, just based on past performance. Do we pay more every year? you bet, but it washed out when we don't pay them for a 4 or 5 month period when they don't do alot for us. Just our experience. Do they get us back? Yes, but on our terms not theirs. Also, hold out for price, I drag them until the last week of the month and have gotten where I needed to be with them, timing is what it's all about. If more dealers did this they would feel the pressure eventually, it would bury them for the fourth and critical quarter. Hold out on price they will cave eventually.

What everybody in this thread seems to be missing is this: AutoTrader is comfortable raising their prices because they are confident (and correct) that the majority of their users will simply post a negative reaction on DealerRefresh.com but continue to pay their increases rather than drop the service.

AT has stakeholders to worry about, same as any for-profit company. When they raise rates, I am sure they don't do it arbitrarily...they conduct market studies to gauge what the net effect of a rate raise will equal. If they determine that they will lose an insignificant portion of their customer base by raising rates, and that the additional revenue will exceed any losses, then it's a good idea to raise them!

Long story short: AutoTrader knows that the worst thing to happen to them from their rate hikes is that a bunch of dealers show up on DealerRefresh to complain about them. Big deal.

By the way, I am on the side of the affected dealers in the room...I have seen the rates increase each year, and I think it is highway robbery in most cases. The way to change it, though, is to drop AT before the others have a way to justify their own rate hikes across the board.

If Cox hadn't privatized all divisions I'd think you were on target w/the sale of Autotrader proposition. Too much revenue for them to give up on so easily esp w/out the investment banking speculation driving stock pricing up or down on them since they're private. Most everyone I've known who's been with the company since the early days is long gone, must've got options & rolled elsewhere.

If I were Cox, this is EXACTLY why I'd get AT ready for sale.

AT has reached it's zenith.
-"1st to market" leverage...GONE.
-Competition growing exponentially.
-AT Brand loyalty stressed
-Sales methods, programs and support causing high turnover.

It'll need a fresh new vision and a total overhaul to remain "relevant".

"It's Elementary, my dear, Watson..."
Fatten the calf just before you take it to market.

Gotta love DR!
Joe

So I guess I should sell vehicles with one year leases and renegotiate the deals with payment increases of anywhere from 30% to 80% for my customers every year on the same vehicle? Great analogy, totally apples & oranges. You get what you pay for simple as that, many aren't getting what they pay for from Autotrader.com anymore. Anyone seen my Rep? Haven't seen one in the dealership in about 8 mos? Would be out third Rep in under two years.

Lightnup,

A few of us are commenting with our real names, links to where we work....we're completely transparent. How do you explain yourself? Why are you hiding?

To respond to your last comment, I'll admit my first thought was: is that the best he's got? You're right though. As an industry we are all about profit. We are the industry who is more exposed for this than any other. Yes, I have to respect AutoTrader for maximizing their profit on lip service. I don't respect your argument though. I think it is weak - you're stereotyping all dealers together in one bunch while this entire thread has been about one single company. You're trying to shift the argument.

Since it may be escaping you, here's the point of this thread: the Internet has created individual power. It gave everyone a voice. It is turning traditional media on its nose, and the media companies can't figure out how to make sustainable profit on it. Distribution isn't as much of a factor anymore, so the costs of doing business are less and competition is coming from every corner. But, there is a standard of living people are used to. I believe AutoTrader is battling with this right now. They're raising prices to see if they can sell their Internet package on the same level as their publication package. Nobody has figured this whole Internet thing out yet, but one thing we have from it is a voice. A few of us are using Dealer Refresh to be a voice for dealers. For better or worse, it is something we've never had before.

Sure is a lot of self-righteouness about reasonable pricing coming from folks in an industry known for $1,295 "Environmental Protection" packages ($10 worth of undercoating plus a quickie wax job) and $799 "Dealer Fees."

Like you wouldn't dance through your showroom after putting a car over the curb at M.S.R.P. plus fees plus a big back end? Home run, baby, high-fives all around! It's what car salespeople and sales managers dream of. Or the ever-popular "over-sticker" price of a hard-to-get hot new model. So don't begrudge a company for recognizing that they are entitled to maximize their pricing in the marketplace as long as they are providing value that customers are obviously willing to pay more for.

Does it make everybody happy? No. But then neither does hearing, "Oh, you must pay our dealer fee, it's printed right there on the buyers order."

AutoTrader is just like the Public Utility Companies: We pay to create, improve and sustain their infrastructure - increasing their value, allowing insiders to reap millions of dollars in profits though nifty stock option schemes... then once we do that - they rake us over the coals with exorbitant listing fees. In addition to that, they reap huge profits by selling ad space on their websites. I'd rather see an honor system in place, so when we sell a car listed on AT - they get a flat fee. Let's say $50. It's just going to be a matter of time, when someone click on your car for sale on AutoTrader, a flash ad will pop-up over the vehicle, forcing you to watch a 20 second ad for Progressive Insurance showing you how much this car will cost you to insure... then it will auto-minimize and you get to look at the vehicle...

Without the dealers... there would be no AutoTrader. Without AutoTrader, there will something else.

Then explain why AutoTrader.com Internet inquiries end up in my CRM. Why does the phone ring with a pre-recorded "Please wait for another quality lead from Autotrader.com?" And explain why I get neither of those things from any traditional media. It is also strange to me when I see those "Contact Seller" boxes all over Autotrader.com and Get a Free Price Quote on the ATC new car listings. Maybe I'm just confused?

Alex wrote: " .....Yep, that’s right, I called AutoTrader.com a “third party lead provider”. Newsflash AutoTrader: you’re playing on the Internet, you’re trying to get customers to call and email dealerships, and you’re trying to deliver traffic to a dealer’s website. Yes, you’re also putting customers on the lot, but we all know that cannot be tracked effectively. At the end of the day you fit my definition of a “third party lead provider”, so accept it and let’s not have that argument ever again. Yes, that also means I’m going to rank you against Cars.com, AutoUSA, Dealix, and all those other things we have allocated to the…..drum roll please….”INTERNET BUDGET”...."

Newspapers, magazines and radio ads try to get customers to call or email the dealer and try to deliver traffic to the dealer's website. Guess they're third party lead providers too? ATC doesn't ask for any contact info from the customer, doesn't provide any contact info to the dealer. That's a lead provider? Hmmm. Sounds like an advertiser to me.

"Google Base will eventually migrate into something bigger that's why we're perfecting the ad words move away from lead providers, and focusing on jumping right inside the ring where the action is"

Bingo. Eyeball audience is where the future lies. Autotrader has grown their audience enormously I'll give them that, but the search engine behemoths w/50 times the audience of Autotrader could eventually eat them for lunch. Name recognition id fine for Autotrader but think about this, Google has the capacity of a gargantious audience and has products like Google Base in their pipeline (been in Beta a while now) that they really haven't even publicized or marketed, if they did and decided to ever put a sales force on the street, Autotrader would melt from the heat.

P.S. All Google has to do is upload a dealers inventory for FREE, new and used, and by matching their inventory with vehicle images they can get in their voluminous image database, they can easily populate a search query based on a geographic IP match, to a users request. Google is going to crush auto trader with this sort of concept which I myself created in my mind, and now in digital form - or maybe, it's already in the works. But like someone said, Google Base will eventually migrate into something bigger that's why we're perfecting the ad words move away from lead providers, and focusing on jumping right inside the ring where the action is.

AutoTrader.com is enjoying success but you will see other successful sites come along. Most car dealership managers had old habits such as thinking autotrader is a must, and big expensive newspaper ads are a must. Part of the problem is that many of these sites like autotader are all own by corporate giants (cox) who buy all the good sites, and since most traffic is flowed through these sites, you can't help but see an autotrader, edmunds or KBB link everywhere. Myspace.com is another place people should post vehicles. We post on craigslist.com and like myspace.com, it's free. Today we signed an agreement with http://www.autoonemedia.com to manage our Google Adwords campaign, and they have a awesome landing page. My quick quote links everywhere will now go to my landing page. We are also thinking about doing videos and posting them on YouTube. They host it for free and now you can watch youtube movies on cell phones. I say stay creative and think outside the box. This is a fluid medium. The best car websites and process have yet to be created.... and anyone here can become a billionaire! Even me.

The purple elephant in the room that Autotrader.com is deathly afraid of is Google. Whenever Google begins to market their Google Base site Autotrader will have to rethink their rate structures. They are coming late to the game with pushing new car ad products. The manuf's in conjunction w/dealer websites have been able to market new vehicles pretty well w/out them. Used vehicle advertising they are ok but have priced themselves out of the market around us for the premium listing contract at least that what everyone I speak to at the auctions thinks the past year.

JL,

What flavor is the Kool Aid over there? If we decide to stay with AutoTrader, I'm going to need some of whatever you're drinking.

However, I need your help in some other areas:

1) "ATC works, the dealer must do his part by taking great photos, marketing the cars through comments, and being a price competitive as possible. Garbage in.....Garbage out!"

Okay, I'm with you 100% here. Many products fail because we (the dealer) do not give it the effort it deserves. However, when it comes to AutoTrader it is typically given more of an effort than any other third party lead provider gets because it is such a larger investment than anything else. Please tell me why ATC's competition trumps ATC in leads even after the extra effort?

2) "We all know like any other advertising medium ATC doesn't work in all markets."

Again, I agree with you 100%. Why is AutoTrader still selling in those markets like they're the greatest thing since sliced bread?

3) "if the dealer doesn't have the right inventory, inventory consumers are looking for the results will not be as rewarding either."

You're absolutely right! But....hold on a minute....if I always had the right inventory, what would I need ATC for?

4) "Also, the dealer has to take responsibility by making sure you have the right person responding to phone calls and emails and have a good system in place for those walk up consumers to be sourced and the sale contributed to AutoTrader.com."

Yep, yep, yep. This certainly needs to happen everywhere. I'm not going to argue with you, nor bring up the costs of accomplishing that in a perfect world - the costs don't matter, this needs to get done. I wouldn't base ATC's success around this. You all know what the industry is like, work with it - don't preach this over and over again...we know.

5) "Also, haven't we seen a nationwide decline in auto sales? It isn't ATC's fault we have seen this decline."

Unfortunately, auto sales haven't been as great as they were only a few short months ago. Learn this word: "relative". ATC, as a third party lead provider, has fallen off the relative radar screen more than any other third party lead provider since the volume of vehicle sales went stagnant.

6) "Continue advertising on the internet, ATC, Cars.com, dealer website and forget the rest, like newspaper, radio, tv and I promise you when consumers start buying again, you will start selling again and most of your sales are going to come from your internet advertising."

Please tell me that flavor of Kool Aid again. I'm an automotive Internet guy to my bones. I couldn't imagine a world without the Internet. I stopped subscribing to the newspaper last year, and haven't watched a commercial since DVR came to consumers. I love my Sirius Radio....I am the anti-traditional media guy! However, I am not the norm. I still want to sell Jaguars, Porsches, Audi's, and BMW's to well-established citizens. I still want to sell cars to people who might need a little financial help. The traditional medias are not as strong as they once were, but they are still very relative. Don't forget who pays your paycheck: Cox Media.

JL,

Take none of this personally. I have nothing against you, my local rep, and not even that guy who made those outrageous claims last Friday. I was able to spit this post out in 2 minutes because I've been having the same argument with every single AutoTrader.com rep for years. Trust me, the best thing you can do is not respond in this thread again.

We all like Autotrader. We just don't like paying the prices ATC is demanding. We're also sick of the BS ATC spits in our faces as reasons for being on the product. If you want to do something to really help your clients, tell ATC they need to get real with their prices. At the same time, I don't mind letting the market determine where things should fall - I'm actually hoping I can influence it.

Lastly, I'll make a warning to the dealers reading this thread. If ATC continues to collect this raised rate from us, the rest of the third party lead providers are going to follow AutoTrader's example.

change is constant at ATC for customers as well as sales staff, some good, alot of it bad for sales & customers. They are "running out of room" as I see it. Unless they come up with some type of "catagory killer" application in the next six month period I have a hunch they're gong to appear like the old "Emperor has no clothes" saying because the top tiered product price points are not going to float with the existing dealer base that've stuck with the price increase percentages for the last three or four years. Will a Honda dealer with 150 used units on the site suffer from downgrading product? most likely not, will the sales person suffer, you bet. One thing for sure and thats that sales staff & customers alkie never know whats going to happen next w/ATC only that its going to cost more to customers & sales.

Internet Jeff. I appreciate your feedback and thoughts on my posts. I agree we all want to make money and I have no disagreement with you there or about them making theirs, and as I have said AutoTrader.com does work in certain cases (standard free listings, featured, and even sometimes the partner package really depends on the market and competition and their goals) but this post was about the "price increases every year" which I have discussed with my dealers firsthand and their frustration of the increase not equaling or even close to the increasing their sales the same percentage or not being able to stay on the same packages same rates and continuing without the new 06, 07, 08 bells and whistles.

I have also seen ROI reports showing Cars.com, Dealix, and many other internet resources with higher closing and ROI percentages and were 2-3 times less of an investment.

Trust me if I wanted to hate I have a book I can write to cover everything over my last 2 years there, sorry I came off that way. My assessment/opinions are about the overall situation I experienced with my dealers not the exceptions. I haven't even touched the "inside" view as much as I could and I won't.

If you read the posts it seems to me the response has been consistent. At the end of the day its on the dealer to make the best decision for their company and budget and they will. Also, there will be many more choices " as the automotive internet vertical hasn't even come close to the tipping point.

DEAR TJ:

Wow TJ, sorry to hear you had such a bad experience working for Autotrader. Instead of giving DealerRefresh readers an infomative view of your inside experience, you're just WHINING and HATING. Easy to see why you are not an employee there anymore.

Why do you care what Cox owns, how much money they make, or if they are conglomerated with newspapers? AT started as a newspaper company and had the vision at some point to progress and adapt to the newfound Internet audience. Hmmnn... now theres a concept: 'Change with the times or the times will change you'. What if the dealerships could do that?

Exposure- 24 hrs a day 7 days a week? Maybe thats why I've shipped cars all over the United States and Canada? Doesn't sound too shabby to me.

I have to assume you are not actively in the dealership in a sales process that involves internet consumers or as an Internet Manager trying to develop the department. If you were and understood how to read stats, you would see first hand how much EXPOSURE your vehicles do get, and the clicks from there on out.

Sure, if you get the right SEM company (that wont rip you off) to draw internet shoppers to you by pay-per-click- Congratulations. But now explain that process to the GM or owner and how great it works (if you can keep their attention span that long), or explain Autotrader for the same price where they saw all of their advertising at the last major sporting event and how it targets new and used vehicles.

Im a Chicago Cubs and Chicago Bears fan, but I dont hate on the Red Sox and Patriots for being SUCCESSFUL, MAKING MONEY or WINNING. Instead I try to embrace what makes them all of that and learn from there.

Hate the game, not the players in it.

I am a current ATC employee and I can assure you it is tough to go into a dealer and request some of the recent rate increases and I overcome most of these objections because I sell the value of ATC and what it actually brings to dealers. It gives the dealer exposure to their entire inventory, allows the dealer to market his brand and his dealership and bottom line helps the dealer sell cars. We all know like any other advertising medium ATC doesn't work in all markets. So if some of you are in those markets, I understand your frustration. I would also like to point out, if the dealer doesn't have the right inventory, inventory consumers are looking for the results will not be as rewarding either. Also, the dealer has to take responsibility by making sure you have the right person responding to phone calls and emails and have a good system in place for those walk up consumers to be sourced and the sale contributed to AutoTrader.com. ATC works, the dealer must do his part by taking great photos, marketing the cars through comments, and being a price competitive as possible. Garbage in.....Garbage out! I have been with the company for over 3 years and I can assure you the sales people that only stick around for a short period of time are ones that don't like corporate structure and can't stand the pressure of a true "sales organization". Working for ATC can be stressful, but it is extremly rewarding. If you have a good relationship with your customers your life will be a lot easier. Dealers please take what I have said into consideration, know it is just as much your repsonsibility, if not more, if you are not successful with ATC. Also, haven't we seen a nationwide decline in auto sales? It isn't ATC's fault we have seen this decline. Continue advertising on the internet, ATC, Cars.com, dealer website and forget the rest, like newspaper, radio, tv and I promise you when consumers start buying again, you will start selling again and most of your sales are going to come from your internet advertising.

wow, seems the sales staff at autotrader is just as frustrated as we the dealerships are in dealing with them. My sales guy is good but he's also mentioned he's not aware of how long he's willing to stick it out with them either, somethings up it looks like. Ever try to call their corp number for service issue instead of your local rep? it's a trip to say the least!

"Bottomline, they will continue hire and turn more people that are happy making less money each year and becoming a "service/contract renewal/up selling robots" to the same 30 dealers in each territory, spouting Exposure and staying away from "leads" terminology having no clue about keeping the client's best interest before thiers, and they will keep raising rates until Dealers don't accept them anymore"
I'm tired of the kool aid drinking. The pay plans now are no way as lucrative as they once were by the way (think at least 30% less comp & much smaller territory) Spin, spin, spin, where would autotrader be w/out it? Retention of sales staff is poor because if they're anything like me, I don't believe half of what ever comes out of an execs mouth at this place.

"Bottomline, they will continue hire and turn more people that are happy making less money each year and becoming a "service/contract renewal/up selling robots" to the same 30 dealers in each territory, spouting Exposure and staying away from "leads" terminology having no clue about keeping the client's best interest before thiers, and they will keep raising rates until Dealers don't accept them anymore"
I'm tired of the kool aid drinking. The pay plans now are no way as lucrative as they once were by the way (think at least 30% less comp & much smaller territory) Spin, spin, spin, where would autotrader be w/out it? Retention of sales staff is poor because if they're anything like me, I don't believe half of what ever comes out of an execs mouth at this place.

"Bottomline, they will continue hire and turn more people that are happy making less money each year and becoming a "service/contract renewal/up selling robots" to the same 30 dealers in each territory, spouting Exposure and staying away from "leads" terminology having no clue about keeping the client's best interest before thiers, and they will keep raising rates until Dealers don't accept them anymore"
I'm tired of the kool aid drinking. The pay plans now are no way as lucrative as they once were by the way (think at least 30% less comp & much smaller territory) Spin, spin, spin, where would autotrader be w/out it? Retention of sales staff is poor because if they're anything like me, I don't believe half of what ever comes out of an execs mouth at this place.

It is great to finally post on Jeff's site with all of you. You have all been correct for years and being in the spin zone was very difficult. Luckily, I didn't buy into the hype and wanted to be a true "consultant" giving my dealer clients an unbiased view. And even when I was with AT.com I told them to take different internet related initiatives. It's funny how all their training is about Radio, TV, and Print but they never talk about competitors (Dealix, Cars.com, Carsoup.com, and "online" competitors)

Bottomline, they will continue hire and turn more people that are happy making less money each year and becoming a "service/contract renewal/up selling robots" to the same 30 dealers in each territory, spouting Exposure and staying away from "leads" terminology having no clue about keeping the client's best interest before thiers, and they will keep raising rates until Dealers don't accept them anymore.

When a customer searches for a car as I have many times and they start narrowing down their choices after using many online resources they are going to contact you whether you are in the free standard listings or Premium listings if you have that specific car at the best value.