"Why are third parties running Google VLA ads on MY vehicles? Shut it down!"

[Ryan Everson]

"Why are third-party platforms like Autotrader or CarGurus running Google VLA ads on MY vehicles? Shut it down!"

Sound familiar, car dealers?

Let's dissect this common concern with a sharper lens: What if allowing third-party marketplaces to run VLA ads on your inventory isn't a curse, but a veiled blessing?

Here's my take: If you've already maxed out your VLA budget, yet you're not capturing a full 100% impression share, why not be grateful that Autotrader, Cars.com, CarGurus, and CARFAX are helping fill the gap?

Because here’s the kicker: Your cars are still the ones reeling in the clicks. And guess what? You’re not footing an extra bill for it.

Pause and consider: If you tell these third-party marketplaces to hit the brakes on running VLA's for your vehicles, guess who benefits? That’s right, your competition. The same advertising budget will just veer towards showcasing their inventory instead; they certainly won't pass the savings along to you.

"But Ryan, my website converts WAY better than a third-party site."

That may be the case, but aren't some leads better than no leads? The answer is yes.

"But Ryan, third parties are inflating my cost-per-click!"

Does it, though? Real talk: VLA ad units have a carousel of 20 vehicle cards. The search keywords that trigger a VLA often have an army—sometimes hundreds or even thousands—of eligible vehicles, especially when you factor in geographic scope, the inventory availability of certain models, and nationwide VLA advertisers like Carvana.

So, pulling your cars out of the game won't really lower your CPC, unless every other dealer decides to collectively opt out.

And let's not forget: Google's recent shift to Performance Max is changing the game once again.

VLA's were originally a dynamic, VIN-specific ad format that could go toe-to-toe with Facebook’s Automotive Inventory Ads.

Now, Pmax is diluting VLAs by forcing dealers to also serve the ads on YouTube, Gmail, Discover, Display, and traditional Search.

Only time will tell how effective VLA's will remain.

So, dealers, let's not be too hasty asking third parties to stop promoting your vehicles.

Sometimes, what seems like a problem may actually be an opportunity.

 

[The QR Code Guy]

"That may be the case, but aren't some leads better than no leads? The answer is yes."

Is it when it comes to these low quality leads?

I see a lot of what I call "Lead apathy" in sales teams at dealerships from week after week of chasing down 3rd party web leads that rarely convert to a sale. Monday mornings when the weekend web leads are handed out, it's like those who get the leads are handed a death sentence and the rest of the team doesn't mind NOT getting them.

I've been running google ads since they were started in the early 2000's and I can create more leads and clicks than I can handle, but to what end? Leads that don't convert are a waste of time and money. I weekly audit my ad spend not only in money, but in conversion rates. Low rate? Eliminate it. I focus on the clicks and leads that convert. I'm amazed at how little dealers (and their marketing vendors) do this.

Switching the mindset from those buyers who are early in their purchasing journey to those who are near the end results in higher conversion rates, higher profit per sale and happier sales teams.

What would you have as a lead? Ten 3rd party web leads or three actual opportunities from car buyers who came to your store?

I'll take the store visits every time. And you would too just based on conversion rates.

Why invest in those who are further down the road in their purchasing journey?

They're invested in a purchase and not just sitting on their couch looking at cars.

They're invested in YOUR dealership and made a VISIT to your store.

They're near the end of their buying journey and will most likely purchase a car in the next week.

Jamming more leads into the large end of the sales funnel is what many do.

Maximizing conversions on the other end is what many NEED to do.

Disclosure - I'm highly biased towards the "end of the buying journey" marketing/sales method. So much so that I created a lead capture system for dealers that captures and converts those car buyers who visit stores. I don't like wasting my time with tire kickers.

 

[Ryan Everson]

I see a lot of what I call "Lead apathy" in sales teams at dealerships from week after week of chasing down 3rd party web leads that rarely convert to a sale. Monday mornings when the weekend web leads are handed out, it's like those who get the leads are handed a death sentence and the rest of the team doesn't mind NOT getting them.

We've seen third-party marketplace leads regularly convert at ~10% - a salesperson needs to seriously re-evaluate their career choice if they are turning down those leads and treating them as a death sentence.


Here's two great DealerRefresh posts from earlier this year regarding the lead source bias among some salespeople:

'Those Leads Suck' and other self-fulfilling prophecies.
AAG Sales Guides - TrueCar, AutoHub Trade, EquityIQ, CarGurus and others typically get a bad rap because of their perceived Lead quality. Historically, leads such as these have performed their best when they were worked with a positive mindset vs an attitude of "those leads suck". If we have the attitude of a lead not being good based on its origin or even initial lead information it typically isn't worked with care and thoroughness. This then reduces the likelihood of it converting. Please treat each lead as a unique opportunity and a shopper with their hand up. More than half of our internet sales come from something other than our websites and that number has room to increase. Here are a couple tips to try.

Experiment: Modify the lead source name of your website leads to have third-party lead source names, and modify your third party lead source names to have website lead source names.

What would happen to your closing ratios? Lead source bias among salespeople is real, and often based on one negative experience ingrained in their memory. They are often trigger happy to prove their bias true by clicking lost or bad lead much more freely.

 

[Blindeye]

View attachment 8137

"Why are third-party platforms like Autotrader or CarGurus running Google VLA ads on MY vehicles? Shut it down!"

Sound familiar, car dealers?

Let's dissect this common concern with a sharper lens: What if allowing third-party marketplaces to run VLA ads on your inventory isn't a curse, but a veiled blessing?

Here's my take: If you've already maxed out your VLA budget, yet you're not capturing a full 100% impression share, why not be grateful that Autotrader, Cars.com, CarGurus, and CARFAX are helping fill the gap?

Because here’s the kicker: Your cars are still the ones reeling in the clicks. And guess what? You’re not footing an extra bill for it.

Pause and consider: If you tell these third-party marketplaces to hit the brakes on running VLA's for your vehicles, guess who benefits? That’s right, your competition. The same advertising budget will just veer towards showcasing their inventory instead; they certainly won't pass the savings along to you.

"But Ryan, my website converts WAY better than a third-party site."

That may be the case, but aren't some leads better than no leads? The answer is yes.

"But Ryan, third parties are inflating my cost-per-click!"

Does it, though? Real talk: VLA ad units have a carousel of 20 vehicle cards. The search keywords that trigger a VLA often have an army—sometimes hundreds or even thousands—of eligible vehicles, especially when you factor in geographic scope, the inventory availability of certain models, and nationwide VLA advertisers like Carvana.

So, pulling your cars out of the game won't really lower your CPC, unless every other dealer decides to collectively opt out.

And let's not forget: Google's recent shift to Performance Max is changing the game once again.

VLA's were originally a dynamic, VIN-specific ad format that could go toe-to-toe with Facebook’s Automotive Inventory Ads.

Now, Pmax is diluting VLAs by forcing dealers to also serve the ads on YouTube, Gmail, Discover, Display, and traditional Search.

Only time will tell how effective VLA's will remain.

So, dealers, let's not be too hasty asking third parties to stop promoting your vehicles.

Sometimes, what seems like a problem may actually be an opportunity.

I think you are missing the big picture. Third parties are using first party cookies to collect information about “YOUR” customers. They don’t share all the information they collect with a dealer or the OEM. They then use your customers data to make more money with their advertising, use it for reporting and most even sell it. When dealers get smart they will keep customers on their website and not third parties.

 

[Ryan Everson]

I think you are missing the big picture. Third parties are using first party cookies to collect information about “YOUR” customers. They don’t share all the information they collect with a dealer or the OEM. They then use your customers data to make more money with their advertising, use it for reporting and most even sell it. When dealers get smart they will keep customers on their website and not third parties.

Here's the big picture:

Does Expedia share all the data they collect with hotels and airlines?

Does Zillow share all the data they collect with Realtors?

Does Etsy share all the data they collect with creators?

Does Airbnb share all the data they collect with hosts?

Does Amazon share all the data they collect with brands and sellers?

It's not unique to automotive, it's marketplaces across all verticals.

I would love if we didn't have to spend thousands of dollars every month with third party marketplaces. And I'm sure every airline, realtor, etc would say the same.

Let's look at hotels as an example - hotels would jump at the opportunity to only get direct bookings through their own website. However, the majority still choose to use the marketplace behemoths: Booking.com and Expedia.

Why is that?

They know even with the best advertising, merchandising, website, direct booking discounts and perks, etc, they would be missing out on a huge number of people actively looking for hotel accommodations on these marketplaces.

There are ~100k hotels in the United States. With a large percentage being multi-location chains. Marriott alone has 6k hotels, and even with that economy of scale, they still see value in participating in marketplaces.
United
Now compare that to automotive - there are ~100k car dealerships in the States. With a small percentage being new car franchises and/or part of a dealer group. The largest dealer group, Lithia, only has 291 dealerships. That's only 0.2% of the US dealership rooftop count, compared to Marriott's 6% share of the US hotel count.

So if Marriott with 6% of the hotel count has succumbed to marketplaces, what does that say about dealerships with exponentially lower %?

There are outliers to the rule, as always. In the hotel industry, there are many boutique hotels that only offer their accommodations via direct booking. But you'll find that most had to initially use Booking.com / Expedia marketplaces to get to the point where direct booking demand could consistently deliver the occupancy rates needed.

Marketplaces simply offer a more efficient and better online experience for consumers across all verticals.

The takeaway is like hotels, dealers should be focused on driving as many "direct-to-consumer bookings" as possible by building a great reputation, delivering value, and offering great customer service to foster repeat customers and brand ambassadors. Then use marketplaces as a way to a) supplement the direct business and b) nurture them into becoming "direct-booking" consumers long-term.

 

[joe.pistell]

When dealers get smart they will keep customers on their website and not third parties.

To dbl down on @Ryan Everson's reply.

• if you were selling your home, would you tell your realtor to save the $150 bucks and NOT list your home on Zillow?
• if you were planning a flight, would you go to every airline's website or go to Kayak?

Sorry @Blindeye, your profile says your Unemployed, but all I hear are word tracks used to defend your pay plan.

 

[Ryan Everson]

I am a proponent of not subscribing to marketplaces when any of these scenarios apply:

1. Your vehicles aren't priced at least somewhat competitively
2. Your photo percentage is low
3. Your photo quality is poor
4. You don't need or can't properly handle additional leads / business
5. Your dealership's marketplace profile has an overall review rating of 3-stars or lower

^ any of these conditions will greatly diminish the ROI of marketplaces.

 

[DrewAment]

Your photo percentage is low

Just me, in the corner, trying to convince all my dealers to modify their feeds to only send vehicles with PHOTOS and PRICE to 3rd party sites.

We pound our chest when the rep asks us how many vehicles we normally stock.... 150!!! we say == but in actual we only have 100 that are front line ready, priced, and photo'ed.

Sign up for the 100 vehicle package, save yourself some money. No one clicks on vehicles with no photos.

 

[Kelly Wilson]

The 3rd parties have a huge budget, and they are going to have someone's car in that ad, why not be happy it's yours?

 

[FormaticDigital]

Hey Gang,

I worked on the Auto team at Google for 7.5 years and the large auto endemic sites buy a ton of Google Ads to drive traffic to their sites to generate leads that they can then sell to dealers at a markup. That is not inside info, with this thread being perfect evidence of that.

IMO, where the rubber meets the road here is if the endemic sites are using your vehicles to run VLA ads to drive traffic to generate leads for other dealers that they then profit from.

At the end of the day, read your vendor contracts and the language around what they can do with YOUR inventory.

I think that you are definitely bleeding sales opportunities by allowing the endemics to run ads with you vehicles when you could be running these ads yourself and getting more leads. Dealer websites convert traffic to leads 4x better than endemic sites, so I would definitely max out your VLA spend within your budget if you can.

You could easily set up an A/B test with the right measurement in place to determine if their ads are helping or hurting your dealership.

Just my $.02