- Apr 7, 2009
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- Joe
Note: This is a work in progress, in no way is it a final research work. Grab a cup of coffee and feel free to add or challenge what you see.
Summary:
Overview:
I've been hearing complaints from Dealers about SEM costs going higher and SEM traffic getting lower, so I looked into it. I was prepared to blame it on bad SEM Vendors, but, I've found a far bigger cause. The Big Classified Sites are in a SEM war. CarGurus has outspent ALL of the other classified sites... COMBINED (e.g. AutoTrader, Cars.com, TrueCar, Edmunds, CarFax, etc...) From a biz strategy POV, 'Gurus competition must react. So... SEM costs that dealers pay are already high AND the trend to continue higher looks real.
It's easy to conclude that this war is real and it the trend of SEM costs are going higher. Dealer's need to place a wary eye on SEM spending. As time passes, it's logical to expect Classified sites to pass thru these costs to dealers. Should this happen, Dealers used car SEM and the Dealer SEM vendor biz could be at risk.
Details:
Using SEMrush*, it shows SEM spending by Auto classified sites like CarGurus, TrueCars, Cars, AutoTrader, Edmunds, Carfax, etc is about $10MILLION A MONTH and the historical growth rate looks to be accelerating.
"So what?" you may ask. Let's look at some of the evidence and connect some dots.
"How does CarGurus play a role in this?" As of June 2018, this SEM arms race among classified sites looks to be dominated by CarGurus. The gap in spending is so significant that It's easily possible that this SEM war between the Classified Sites has just begun. CarGurus has a Wall Street war chest AND they have lower costs (gurus scrape your website for inventory data & they don't pay your DMS to get your data).
I'm looking forward to your thoughts...
*Some SEMrush screenshots FYI
CarGurus $ is 4:1 mobile to desk
AutoTrader $ is 1:1.5 mobile to desk
TrueCar $ is 2:1 desk to mobile
Cars $ is 2.5:1 mobile to desk
CarFax $ is 2:1 mobile to desk
Summary:
- The Big Classified Sites are in a face-ripping SEM war.
- CarGurus aggressive SEM work is noteworthy
- Dealer SEM spending needs a deep review.
- The car dealer SEM vendor biz could be at risk.
Overview:
I've been hearing complaints from Dealers about SEM costs going higher and SEM traffic getting lower, so I looked into it. I was prepared to blame it on bad SEM Vendors, but, I've found a far bigger cause. The Big Classified Sites are in a SEM war. CarGurus has outspent ALL of the other classified sites... COMBINED (e.g. AutoTrader, Cars.com, TrueCar, Edmunds, CarFax, etc...) From a biz strategy POV, 'Gurus competition must react. So... SEM costs that dealers pay are already high AND the trend to continue higher looks real.
It's easy to conclude that this war is real and it the trend of SEM costs are going higher. Dealer's need to place a wary eye on SEM spending. As time passes, it's logical to expect Classified sites to pass thru these costs to dealers. Should this happen, Dealers used car SEM and the Dealer SEM vendor biz could be at risk.
Details:
Using SEMrush*, it shows SEM spending by Auto classified sites like CarGurus, TrueCars, Cars, AutoTrader, Edmunds, Carfax, etc is about $10MILLION A MONTH and the historical growth rate looks to be accelerating.
"So what?" you may ask. Let's look at some of the evidence and connect some dots.
- $10mill a month divided by 20,000 dealers is ~$500 a roof per month. This is a 'pass thru' cost that dealers will pay for.
- Why would Classified Sites spend more SEM money than today?
- As New Car SAAR rolls over, dealers' sales and marketing dollars move into Used Car Arena
- CarGurus, the new 800lb gorilla, is smashing the SEM gas pedal to the floor. CarGurus is outspending EVERYONE COMBINED (~$6mill a month) See below.
- Wall Street Likes CarGurus model (the winner gets more cash to work with)
- 'Guru's competitors may want to close the gap & shift dollars into SEM (consider AT's TV spend)
"How does CarGurus play a role in this?" As of June 2018, this SEM arms race among classified sites looks to be dominated by CarGurus. The gap in spending is so significant that It's easily possible that this SEM war between the Classified Sites has just begun. CarGurus has a Wall Street war chest AND they have lower costs (gurus scrape your website for inventory data & they don't pay your DMS to get your data).
I'm looking forward to your thoughts...
*Some SEMrush screenshots FYI
CarGurus $ is 4:1 mobile to desk
AutoTrader $ is 1:1.5 mobile to desk
TrueCar $ is 2:1 desk to mobile
Cars $ is 2.5:1 mobile to desk
CarFax $ is 2:1 mobile to desk
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you invite a one-upper from the old dude 
