Websites like Craigslist, Vast, Oodle, Backpage, EveryCarListed, EasyAutoSales and others are all free. Websites with free listings, supported by advertisements, seem to be the future, or at least viable alternatives anyways.

I’ve heard rumors in the past that even eBay is trying to go to a model of not charging for listings and only charging for leads or sales.

KBB on the other hand has the eyeballs. VAST’s technology is a perfect fit for them. Will they overrun ‘Trader and Cars? No, but they’ll make a big dent.

Wide array of inventory providers is great thing… the same car can be listed at AutoTrader, CarsCom, CarsDirect or directly from dealership or via God knows which service but the one who outbid will show up and get lead. AutoTrader has to send decent amount of leads to their dealers to keep them happy and keep their accounts so when they need they can spend some dollars at KBB and send their unsatisfied dealers leads and keep them happy… buying traffic in bulk like earlier was most profitable option for autotrader and now time has changed they have to compete with everybody on the individual car level to get leads and support their business.

The real heart of this issue is the old “lead source vs. advertising” argument that Cars and Autotrader reps and dealers have been batting around for years. I’ve read great position statements on DR in other threads and I expect to see them revisited here. Are the major classified sites an advertising partner with 10 times the targeted reach of the local broadcast networks or are they simply a lead provider to be measured by phone calls and emails? It looks like the industry is about to clearly define the terms and the definition is going to be right on the invoice.

I think it’ll work like this, if inventory, dealership name and contact information are freely given to consumers you are by definition an “advertiser.” ROI will be determined the same way that it is with other comparable mass media outlets like radio and tv. The old intangibles like page views, map prints, site transfers become the new readership, circulation and reach that define value.

Conversely, if inventory is displayed but contact information is restricted to only those means that are directly trackable as to associate a charge you are by definition a “lead provider.” ROI is determined by closing percentage as a barometer of lead quality.

Both models are viable and will have a place in dealer’s ad spend because consumer shopping behavior supports both models.

This isn’t a “vote with your wallet” scenario, the successful dealerships and savvy marketers will quickly realize the need for both in the mix and the massive differences in calculating ROI for each model.

I am a fan of the pay-per-lead model, the harder you work to merchandise your inventory, the more qualified leads you return (especially when coupled with the vast algorithm search results).

http://www.vast.com/

I do agree that KBB does have several challenges. One is no doubt getting consumers to their inventory listings, but if done correctly and if they are able to figure out how to leverage their “information shopper” (incorporating some persuasive architecture), I believe they could drive some incremental traffic to their inventory listings.

“KBB is a strong brand when it comes to used-car valuations,” says Mitch Golub, Cars.com’s president. “However, pay-per-lead classified listings are a completely different business. They clearly have their work cut out, especially if they pursue a model that aggregates listings from a wide array of providers. That model has yet to work.” – This model has worked (ask AOL), it depends on how you are measuring the success. Is KBB trying to be the next AutoTrader.com or Cars.com….ummm, I don’t know.

I’m sure we will revisit this post a year or two from now and have an answer.

Aren’t you looking at it from the wrong perspective? As a consumer, selection is key. As a dealer, visibility is key. You yourself just admitted Kbb is a great site.
Kbb is bringing lots of eyeballs to dealer’s digital storefronts.

In terms of the purchase funnel, Kbb has always controlled selection but not acquisition. All Kbb is vying to do, is take some control of the tail end of that funnel.
Nothing more, nothing less.

And one more comment about Leads. How is a lead from a dealer’s inventory decoded by a vin # only closing at 5%?

We are confident this model will give Dealers two things. Individually tailored ROI and Transparency.

Allow us to work through the expected anomalies with our technology provider-Vast Automotive. In the meantime feel free to email us with your questions.