Blueprint Series: Third-Party Lead Providers

WOW Alex, stirring up the pot on a Friday? This should be a well read topic with all of the vendors on this site!

I read here daily and generally choose not to post, but I came across the autodealermonthly.com Dealer's Choice Awards last week and instantly wondered what Jeff, Alex, Joe and the others from the DR community thought about it. I hope I'm not off topic. But how do DR reader's wants and needs from a provider line-up with the "results" of these awards?

http://www.autodealermonthly.com/2008DCA_Winners.pdf

Looking forward to following this one,
JL

I would say all of the above. Like everything lately, third party lead providers are evolving. Companies like Autotrader seem to be making a stand that they are advertising, just like newspapers, t.v. and radio. They, according to my rep, do not provide leads.
Others, like Vehix and the like, count leads as the way they prove their worth. But, unlike most of them Vehix used to come to the dealership to go through the leads to see which ones actually sold.

Going forward:

I don't care about unique hits, page views or search impressions. I care about how many people I received and of those people how many I sold. To me, that is the purest form of ROI.

Website click throughs and maps are subjective.

I would love to see these companies develop a way in their tools to track the sold, the price point, days in stock etc. I also would love to see 3 rd party vendors get away from roof top pricing. I have 23 vehicles at one store and 300 at another, why are they charged the same thing?

Charge per vehicle uploaded. Allow the dealers to be more unique. Offer BHPH products. Don't say that you are a partner, then sell the same package to everyone else.

Last thing; develop a secure credit application that can be sent to a CRM or lead management tool. Having to log into a separate account to retrieve a finance application not in your format is a pain.

To summarize; get better at the little things. These companies are like the yellow pages; they tried so hard to make it easier that the average person of intelligence doesn't get it.

The classified vendors, AT Car.com Vehix, need to remove the leaks from their sites or change their pricing models. Dealers are being taken advantage of in these relationships and most do not realize it.

The maxim in online marketing is "Content is King and Traffic is Supreme" and they are charging dealers to provide them content to monetize the traffic it brings in above and beyond the fees collected from the dealer.

"Last thing; develop a secure credit application that can be sent to a CRM or lead management tool. Having to log into a separate account to retrieve a finance application not in your format is a pain."

Great suggestion Chris. I have been against having numerous unnecessary systems for a long time.

I'd like to see these companies move to a more fluid business model. So many of these third party lead providers get stuck in their ways. I think Jeff is going to comment on this further, but in a nutshell, times are changing and most of these companies are not.

I want more activity, more eyeballs on my cars and less features that don't bring any value or ROI to my bottom line from having them. Banner ads are worthless, it's all about the cars. I'll pay for better placement as it makes sense but stop adding crap that does absolutley nothing to increase our ROI with the product we've purchased. Spend into partnerships with other large websites that WILLl deliver more eyeballs to my vehicles. Stop quoting JD Powers, nobody cares. When I'm selling the same amount of units off of craigslist for zero spend than I'am with cars.com/autotrader, what's that telling me as a dealer? Sure the cheap stuff & trades work on craigslist but for free they are delivering the audiemce/eyeballs to these cars for me. I believe there is about to be a considerable shake up in the online classified advertising world for us as dealers. I'm not seeing the ROI we once achieved from them, not do I have the confidence that we will ever attain the levels we once did in utilizing them. Big question is why are we paying exponentially more for less?

Great comments Chris. It's easy to tell you're right in the middle of the battlefront at your biz.

re: Classified sites
Chris, I'll take the other side of the argument. In my world (a marketing director) all the points of measurement are important. Click-thrus, printed pages, emails, phone calls, all are signs left from shoppers who prefer to remain anonymous.

Although these activities do not directly correlate to sales, they trickle down to floor traffic. If you improve your classified presentations and activities are up 20% year over year, then floor traffic should be seeing a similar increase in Mr. anonymous internet classifieds shopper.

Joe

From Classified Sites, what do I need? I want *Web 2.0! I need them to give me tools to create content, then get out of my way!

*Web 2.0 is web design that aims to facilitate creativity, information sharing, and, most notably, collaboration among users http://en.wikipedia.org/wiki/Web_2.0

Look what happens at MySpace and Facebook. Personality rules! Nothing plain and boring there! Marketing leaders (like me will create all kinds of fun stuff to make that shopper hang around just a little longer.

What am I talking about?
Why don't we have a personal video from the hard working and passionate ISM rather than "YOU MUST PRINT THIS PAGE AND ASK FOR PAUL H JOHNSON FOR YOUR TRUE INTERNET PRICE". Just like on MySpace, Small Entrepreneurs could offer widgets to implant all forms of fun widgety stuff.

If I am Chip Perry, and I can add a platform and tools to empower our dealer base with a goal to create UNIQUE content that will retain visitors longer, its a win-win-win. The last win would be keeping shoppers off competing sites like cars.com.


Joe
(yes.... it's me again)

"What do you want from your 3rd Party Lead Vendors?"

Better Leads…EXCLUSIVITY, real people, real leads, lead scoring, no reselling

I’m only referring to the 3rd party lead resellers like AutoUSA, Dealix, Autobytel, the infamous iMotors and the others that sell the dealers generic new vehicle leads.

Antiquated: - no longer used; obsolete or obsolescent: The spinning wheel is an antiquated machine.

The 3rd party lead business is an antiquated machine, basically a scam. These companies are scrambling. They were used to making the big bucks back in the days when the Internet was “new” and a higher percentage of consumers converted with “get your price quote”.

The 3rd party lead business was one of the first services to dealers in the “digital/internet marketing arena. Dealerships without websites were buying leads from Stoneage, hell the leads were sent to me via fax because there was no internet connection at the dealer (remember those days?). IT WAS SOMETHING NEW!

It’s now no longer new and consumers have been stained in the past with a no better experience form the “get your price quote” websites then walking through the front door.

Who’s to blame? The 3rd party leads vendors AND yes, the dealers.

I’m not saying 3rd party leads don’t have their place, and yes there are consumers that will answer to “get your price quote” (you honda buyers). But the revenue these companies have been used to making quickly changed. I’m know it was a sweet ride while it lasted but admit it’s time to change. Quit regurgitating and reselling junk leads to several dealers.

The smart dealers know where the good leads come from and are adapting ways to gauge and take advantage of this.

Great discussion and here is what I will add;

This paying to vendors for "drive to traffic" amounts to a toll both on the (very old term) internet super-highway.

Everyday there is new and a better means for customers to travel to a dealers website and paying for how many people drive by is soon to be gone, but maybe not because dealers are slow to realize things most of the time.

The money is better spent on a speed pass which is what Cars.com is.

Autotrader better get it together fast because they are getting stomped on by Cars.com

Ebaycars, was great to brand in the past but to sell a late model car not so sure unless its a 1978 Pontiac TransAm...still cool to me but it was my childhood dream car so I would look there to find it.

Hey who turn the spring weather off here in Chicago, brrrrrr!!!

-----The money is better spent on a speed pass which is what Cars.com is.

Autotrader better get it together fast because they are getting stomped on by Cars.com-----

They both have let the boat pass them.

Paul Rushing

Jeff: The last thing that the 3rd party lead providers want to do is become transparent. They don't want you to know where you got the lead generated (remember your point of womanmotorist.com some time back?) and they certainly don't want to integrate with something like lead scoring. That'd be like the proverb of taking off the nose to spite the face.

Chris: There are certain technologies and services available to those in Internet auto sales to help manage the various lead channels and restore some transparency.

Joe & Paul: Here's an idea that I'll give to this community. (It's definitely a Web 2.0 approach) Instead of being charged to send your inventory and descriptions (the valuable content) to a site like cars.com or autotrader.com? Why are the dealerships not getting the service free - oodle.com or vast.com -and actually being PAID a percentage of the ad revenue that each of their vehicles generates? Here's the point: If you have hundreds of vehicles and you have popular vehicles in stock then you should be generating quite a bit of eyeball traffic. If these companies are really partners then shouldn't both parties be more equitably profiting?

Better yet, why don't they adopt the floor salesman compensation model and be paid more for a sale versus an up?

Mike Muncy / Founder & CEO / Carfeine.com

Oh, and one more thing from my end... I want the IP and URL that generated the lead... click stream data too.

Mike Muncy / Founder & CEO / Carfeine.com

"They both have let the boat pass them"...

I agree totally with you Paul it has and just because you can still see the boat, doesn't mean it hasn't passed.

The big reason that Cars and Autotrader still exist is that although it cost big $$$$ to list aggressively, it's still cheaper than a dealer trying to launch a nationwide campaign on their own to reach that large of a targeted audience.

Kaboom! and they will both be gone once someone gets enough wind at their back to offer the listings for free.

I have had a discussion with the newest big man on the internet block and we'll see if it all comes together in time.

I have some foresight opinions here that once Microsoft takes over Yahoo and the time is right Yahoo autos and Msn autos combined just put together a one two punch knockout if they decide to offer to list for free in lieu of placed ads.

Hey Cars.com and Autotrader want to stay in business?

Start reading Jeff's Blog and hire us all here as independent ISM marketing consultants for big $$$ because the more powerful that Jeff Kershner's blog becomes we may all power info together and buy you out to go away...all the way to the bank!!!

So nobody say first "they are already free listing services"...I know that but none have any "wind" because they all are waiting to catch a free wave that dealers will jump on magically and they can sell their company for big money, NOT going to happen.

When I see them at the stores hustling to get dealers signed like Autotrader then maybe they will make it. Cars is backed by a multi billion dollar company that will lose money and squash the college kid start ups.

Does anybody know of the one that just spent 6million in six months and is gone already?

I apologize in advance for commenting on my own comment, bad blog manners.

Take care and all the best to everyone.

This has been fun and so long,

Pete from the Windy City

Sorry - Had to jump in here to respond to Joe Pistell who wrote: "Why don't we have a personal video from the hard working and passionate ISM rather than "YOU MUST PRINT THIS PAGE AND ASK FOR PAUL H JOHNSON FOR YOUR TRUE INTERNET PRICE"."

That's already available at no charge Joe and you can probably guess where.

Unfortunately, as simple and easy as shooting a brief video is, it's mind-boggling how few dealers will make the effort to better merchandise themselves this way, even when the opportunity is right in front of them. Only the relatively few "enlightened" dealers are doing so. I suspect it's because many others don't see an immediate cause & effect (i.e., post videos = X more sales per month) so they aren't interested in investing the time or effort.

http://tinyurl.com/3e9ch9
wish the videos were a little easier to find on atc

----From Classified Sites, what do I need? I want *Web 2.0! I need them to give me tools to create content, then get out of my way!---

This is already being done it is just unfortunate it is not in a classified vendors style site. I was able to sell 8 used cars that was directly attributable to one page because I was able to get instant SEO from this platform for the term "Market Area Brand" searches for a brand we do not carry, which was also the name of a local dealer.

It was a little work. Maybe 30 minutes to set up and 5 to 10 minutes a week to maintain.

Best of all it is free and the traffic is monetized. :P

As for AutoTrader and Cars.com, both are price gouging and supplying Dealers with reports to justify their value. It is advertising but bottom line - what is the ROI. The value is in delivering good leads to Dealers and inturn, the Dealers being able to justify the ROI. Paying $1400 for 14 leads translates to $100 per lead. From there, look at how many leads actually purchased and then what is the ROI per lead or program. Some cost $3500 but do not guarantee any lead volume.

The newest player is www.UsedCars.com which is based on a per lead charge. Lead costs are $25 per lead. Plain and simple. It's the lowest cost per lead model available (I think).

RE: 3rd Party Leads.....

3rd Party leads provide access to some of the most trusted and branded websites in the world. These sites spend large amounts of money to be of value to the purchasing public. Much more than Dealers can get thru their own marketing SEO/SEM efforts. And they are unbiased for the most part. They provide valuable information to the consumers.

3rd party lead providers move these leads to the Dealers in the most efficient manner possible. Without these leads the Dealers would have few prospects in their sales funnel. Each 3rd party provider has different features and benefits all of which allow the Dealers to do their jobs more efficiently - thus lowering the costs per sale.

There are 3 big Lead Aggregators - Dealix, AutobyTel and AutoUSA.

JG - thanks for the definition. We know what 3rd party lead providers do. This is a discussion to say what we would like to see changed about them. Do you have anything to add in that regard?

Mike Muncy writes:
Instead of being charged to send your inventory and descriptions (the valuable content) to a site like cars.com or autotrader.com? Why are the dealerships not getting the service free - oodle.com or vast.com ...

Pete Says:
So nobody say first "they are already free listing services"...I know that but none have any "wind" ...Does anybody know of the one that just spent 6million in six months and is gone already?...Kaboom! and they will both be gone once someone gets enough wind at their back to offer the listings for free.

Not sure about you, but my mother always told me "if it sounds too good to be true..." and I'm sure you know the rest. If you are holding out hope that a new start up is going to come along and advertise all of your vehicles with customized video presentations, secure credit apps that integrate with your CRM and, hell, detail all of your cars before they take 47 photos of them and all at no cost to you because they "need" your inventory, I'm going to suggest that you don't hold your breath. That makes as much business sense as a dealership giving away cars to build brand loyalty.

The "wind" behind autotrader and cars.com is gale force. 6 million over six months? You have to lay 6 mil in 60 seconds to be a player at these tables. The tables for usedcars.com, myride.com, vehix.com, web2carz.com, getauto.com, peachstateautomall.com and pleaselookatmyFREElistings.com have a small ante and an equally small pot to be won.

I'll finish with this, if the maxim that Paul presents, "Content is King and Traffic is Supreme" is true, then Content and Traffic must co-exist for success to be possible. Free listings mean lots and lots of crappy content, if it were free fringe dealers would upload 100% of their inventory which would degrade the buyer pool i.e. craigslist. A barrier to entry, not a gouge, is a good thing for those that can afford to be inside the fence. The retail buyer (non-craigslist) seems to know the difference between these sites and shows a strong preference. But the real issue here is traffic, and just like every other medium, traffic is not free. There are real costs to providing effective products, that's why so many have tried to knock autotrader off the pedestal with the free listings model and failed.

Paul, you complain about leakage and suggest that inventory should be free, seems to me that you inherently must have one or the other. There are 3 options, the dealer pays to be on the site, the site is paid for by interuption advertising as in TV and Radio, or the end user uses the site by subscription which isnt likely, what am I missing? Looks to me like the cost of both of these sites are split between option 1 and 2.

At the end of the day "it takes money to make money" and maybe I'm not a visionary, but I just don't see anything on the horizon that is likely to change that.

----At the end of the day "it takes money to make money" and maybe I'm not a visionary, but I just don't see anything on the horizon that is likely to change that.---

Remember the day when AOL was the Internet?
Are you old enough to remember when Word Perfect was the standard?
Do you use IE browser only?
What happened to 5.25 and 3.5 floppy disk?
What happened to all of the stock brokers that guided your daily investments?

Look around you the online/computing world is very fluid and what was standard quo yesterday is now a memory. I suggest you read this article. http://www.newsweek.com/id/106554/page/1 and see if you can figure out how ludicrous the opinion given 13 years ago is today..

Paul

I think Dealers want more-better leads. Unfortunately, the market is only so big and only demands so much. Dealers want ways to work leads better and longer. Leads are increasingly becoming more important because sales are slow. I think Dealers want lead scoring but there are issues to address first.

---see if you can figure out how ludicrous the opinion given 13 years ago is today..

Actually, before aol was the internet it was bbs servers, and yes, I remember! No doubt the landscape has changed. Linkway on a 386 is a distant memory and a 14.4 baud modem won't handle the flash on the sites these days. But I think you know that was not the point I was making.

Since the first caveman started exchanging shiny rocks and a dull stick for a pointy one from the guy in the cave down the dirt trail certain things have had more value than others because they were more effective.

I'm not talking about a decade of technological advancement, surely the stuff we do today will be equally as foolish to us in another decade. I respectfully disagree with the assertion that substantial value can be derived with nominal investment in any medium. Since the modern era of mass marketing somebody foots the bill regardless of medium or industry. From your comment, I'm still not sure how you see it differently?

JL The point is what is the accepted standard today may not always be the case.

However I disagree with this statement:

"I respectfully disagree with the assertion that substantial value can be derived with nominal investment in any medium."

It is proven wrong time and time again in niches outside of the automobile industry and to some extent inside of it.

Paying to provide content to a website that they monetize in ways that do not benefit you is ignorance of acceptable standards.

Just think if all user generated content sites charged for admission. How successful they would be?

Same concept different venues...

consumer pay for a subscription? Like consumer reports? You can't get anything for free from consumer reports.

---Paying to provide content to a website that they monetize in ways that do not benefit you is ignorance of acceptable standards.


Not trying to be argumentative, but "acceptable standards" would be what the two parties enter into at the time of a business relationship, correct?

Last thing and then I'm done. I already feel like I hijacked this thread. Please don't block me Jeff.

---Just think if all user generated content sites charged for admission. How successful they would be?

Same concept different venues...

Again disagree. I have the most viewed videos on youtube open and, oh my goodness, not a single advertisement. I've been through 7 pages and not a single one of them are encouraging me to make a purchase. Crazy! Could it be that most of the people going to this site aren't looking to buy anything, and the vast majority of people supplying the content arent selling anything?

Different venues, Totally different concept!

I assume that all the content you are generating and sending to cars.com and autotrader is for the expressed purpose of commerce. And likewise, the users that get on those sites are at least somewhere in the process of researching and buying a car.

With the exception of Craigslist, and even that one in a few markets that now charge for employment and realestate listings, the user generated content sites are not designed to benefit the user that supplied the content monetarily. I think that your argument against the monetization of user generated content is neutered when you consider the supplier and the end user's expectations.

No hard feelings I hope, just drastically different viewpoints.

---No hard feelings I hope, just drastically different viewpoints.---

Absolutely no hard feelings. I don't even know who I am talking to.

Almost all UCG style sites have advertising on them and some exist so people users can profit from their use.

Eventually there will be a happy medium in this arena, but current models are just not very supportive of dealers.

Ok, lets back back on track.

What do you want from your 3rd Party Lead Vendors?

One thing I would like to see from the current vendors I use is a discounted rate or a credit for leads that do not provide a valid phone number. It is not a common issue but it does exist.

Found a screen cap that summarizes the significance of a Autotrader's "leakage" as mentioned previously. I'm aware the vast share of their audience is concentrating on cars within their respective DMA/zip, but how much of this "leakage" is really happening? I'd like to see more "local" promotions on pages, lets get more "local" oriented with "local" landing pages on classified sites. http://www.flickr.com/photos/[email protected]/2346794830/sizes/o/

Thanks to all for your input on this extremely important topic! In the spirit of openness, I am the VP of Advertising Products for Cars.com and received Jeff’s okay before making this post to express my appreciation. I have been and will continue to be reading carefully.

Since Cars.com is the only company offering both 3rd party leads (through our NewLeadsPlus product, not associated with the Cars.com website) and inventory based solutions (through our core Cars.com products) I am grateful for the fact that the bulk of this discussion has distinguished between the two.

Leads services like Autobytel, AutoUSA, Dealix, and our own NewLeadsPlus product are a bit antiquated, as Jeff points out. We have enhanced the value of our offering relative to others by limiting the leads sources to search and in-market automotive sites like kbb.com, Edmunds.com, and NewCars.com, but I certainly don’t expect this product category to remain unchanged for another 13 years. Mike points out the desire for the IP address and click-stream data. That, of course, would need to be optioned into by the consumer because of privacy but is something we will investigate and work toward. Other ideas are extremely appreciated.

The core Cars.com product is a subscription service, because most consumers never submit a request for quote through any site, as pointed out by Jeff. By not having to put our stamp on a consumer in order to monetize them, the shopper is free to contact the store by phone, email, or website transfer. Additionally the shopper can simply go directly to the store without leaving any evidence to demonstrate that it was the dealer’s listing on Cars.com that sent them. This makes it impossible for Cars.com to be compensated on a per sales basis. Having read Mike’s post I will increase our efforts toward greater measurement of performance on all fronts, including walk-in traffic.

Many thanks for the recommendation regard secure credit applications (SCA). Our new SCA is our fastest selling product. However, it does not load directly to the CRM system, and we are scrambling today to change that if at all possible (thanks Chris). We will continue to focus on dealers offering BHPH and help dealers reach those consumers and we are working toward enhancing our product offerings specifically for those dealers later this year, but I agree with Chris on the desire to have it even sooner.

Cars.com certainly strives to be supportive of dealers, and that starts with listening to them. Thanks to all for extremely valuable input.

Dennis - thanks for posting. Jeff and I were just talking about your comment and we both think it is awesome you decided to let everyone on Dealer Refresh know Cars.com is listening! We both thank you.

We also hope you've started a trend.

I concur with this statement and one we all should visit when salary time comes around.
"Additionally the shopper can simply go directly to the store without leaving any evidence to demonstrate that it was the dealer’s listing on Cars.com that sent them. This makes it impossible for Cars.com to be compensated on a per sales basis."

I do agree with much of what's been said here but have to add my .02.

As I mentioned in a post a couple of weeks ago, how you handle the vendors such as Autotrader and Cars.com depends on your biz model. If you're interested in branding your particular dealership, and you're willing to get the mack-daddy premier package, then open the wallet and spend away.

However, if it's the bang for the buck you're looking for, i.e. - leads, phone calls, walk-ins, you can't beat your own site/s.

My willingness to be on these vendor sites has everything to do with the fact that my competitors are on there and nothing else. I could care less about the branding aspect. My reps all know not to use that "We're not a lead provider" line with me.

My opinion on the branding you get with these sites is about like having a billboard on an interstate where the traffic is always 75MPH. With another billboard over yours, under yours and right behind it.

We close our website leads at a much higher percentage than any 3rd party lead provider or marketing site so why shouldn't we put more focus there?

After all, you're the only billboard on that particular interstate.

Billy:
The leads from your own website are ALWAYS going to close at a higher clip. That doesn't mean that those leads are exclusive to your own website (meaning your website didn't originate the consumer). If a consumer saw your vehicle on a third party site (lets just say for the sake of argument your name was Billy Ford) and then decided in the next day or two to come back to that vehicle, but instead of going to the third party site they thought, hmmm his name was Billy Ford, I wonder if there is a BillyFord.com or if there is not I know I can google it. That way I won't have to sift through all the other vehicles to find it again. BOOM! Now the consumer is at your front door and ready to learn your hours, your salespeople, your history, and come buy a car. People that go to your website are usually in the final stages of purchase. It is where they start their search that doesn't get credit. You, the dealer, don't want to know that a consumer went to your website, contacted through it, and then bought a vehicle, do you? I would think you would want to know how they arrived at your website. I may be wrong here, but I don't think people just wake up and go to BillyFord.com. There must be some kind of call to action(advertisement). The great thing about Cars.com and AutoTrader.com is that people that go to those site are only looking for one thing, a vehicle. Those two sites dominate the online used car marketplace. You do believe that most of your consumers are finding you online now, right?

Saying that the leads on your personal website are the best to you REP is the same difference as you not allowing your REP to say "We are not a lead provider." In my case, and I sell for Cars.com, I AM NOT A LEAD PROVIDER, but I do sell a "lead-providing" product, ha! You, the dealer, create your own leads and are not relying on me to provide them to you. If you are sitting back and waiting for AutoTrader.com or Cars.com to provide you leads, then other dealers are taking advantage of you. My job is to put your inventory in front of as many car shoppers as possible and then let them contact you in any way they seem fit (email,phone,website,walk-in). The analogy of comparing Cars.com/AutoTrader.com to a billboard is ridiculous, unless of course you live in a town where everybody that drives down the road is a car shopper at that moment. If so, I think all the dealers on here want to relocate to your town.

Also, I know you were kidding when you said that "My willingness to be on these vendor sites has everything to do with the fact that my competitors are on there and nothing else."...right? If not, there are plenty of one-liners that will fit here (insert one to your pleasing).

This is a great topic and I have enjoyed learning some of the things dealers expect and want from us as third party vendors/salespeople. I will keep telling my dealers that I am NOT a lead provider even if they think otherwise. I love what I do and my dealers know that. I expect them to have the same passion about their business as I do. Yes we will butt heads on occasion, but we can also learn from each other and try to understand our different points of view.

I got to eat dinner now.

McCoy

McCoy and Billy: It's been my experience that you're both right.

What you both are talking about is lead funnel analysis. Car shoppers use more than one method to contact multiple dealerships when given the opportunity - and they have plenty of opportunity.

Billy, your results of leads closing is incomplete unless you are properly identifying every step the prospect created during their entire sales process.

McCoy, you are way off base if you think you are not a lead provider... you are an email lead provider, a phone lead provider, a walk-in provider - all that matters to the dealership is the fact that they give you inventory and you provide them leads in multiple forms.

The better debate would be effective measurement and optimization of each of a dealerships funnels to increase ROI.

Lead providers in all forms can better enable dealerships to work with them by providing more information about where leads come from so that empirical tools can be employed. Getting back to the idea of this post... more transparency please.

Mike / Carfeine.com

This is what I want from a 3rd Party Vendor assuming tools, processes and trained personel are in place to accomodate at dealership.

ROI: 10% sold ratio new/used with grosses accordingly to franchise and market.

Quality lead scrubbing: Ex: Calling a phone number and it's disconnected, sending the perfect email to an address that's non-existant, or receiving a new car lead from 250 miles away, unacceptable.

Acceptance of bad leads: Don't charge me for all the leads this month, then subtract the "accepted" bad/duplicate leads on following months bill.

Ease of return bad/duplicate leads from any CRM tool to vendor, not faxing, calling or otherwise.

Marketing: 1. Exact knowledge of how the Vendor produces their leads. What are the URL's customers click on to produce a lead? If a General Manager knew it was CarsBelowInvoice or WhyPaySticker . com, that contract wouldn't go very far. 2. Is my dealerships new vehicles exclusive to a certain mile range?

I dont consider ATC or Cars.com online advertising as a 3rd party Lead Vendor. The best ROI I've experienced from a 3rd party lead source is clickmotive, hands down.

Hi Folks!

Great topic and some excellent commentary thru out.

I'd like to offer my own comments- if I may.

What Jeff is saying is exactly right about Lead Provision and Aggregation. Dollar cost per leads had their place in the evolution of the digital space. But that time has past.

Let's be really honest about a 3rd Generation in Market Digital Car Shopper. Do we think they want the Dealer to be in control of the process? How many of these shoppers go into the Endemic sites, search engines, software programs and then outright refuse to give up their Name-Email Address and Phone # in lieu of going directly to the dealer to control the process themselves? I'll give you a hint. It's more than 75%. (3rd Gen Folks here--which are the people we should be concerning ourselves with)

I think we all know the reason why this has become the norm.

So what to do?

The answers are littered thru the comments in this section.

The buzz word is TRANSPARENCY!

Tell your vendors you want this:

*Click stream Data up to 60 days from first visit measuring any/all transaction.

*Microsites(Landing Pages) Built into all Banner Ad Campaigns specific to the path of the site visitors intent(ie Used Content for a Listings shopper)

*Web Based Real Time Analytics with log in for multiple parties at store level(Customizing for supreme granularity, or basic overview)

*Rich Media Ads Enabling Video-Direct Text Linking(SEO)and most importantly Pixel Tagging.

*Co-OP Support and Approval

*Thank You Pages and Follow Up(Calls/Emails) from the Vendor/site to all Shopper generated lead submissions(transparent to the Dealer)

*Endemic Auto Site Lead Programs directly indexable by the Major Search Engines

The sooner we/the Industry start giving you this kind of transparency, the faster you will maximize your digital spend and truly realize the power of this medium.

All lead sources provide the same thing, it's how you respond to a lead that effects the ultimate outcome. I keep perspective by understanding that sales, in a nutshell is a numbers game - period. However as an outside the box type of guy, I really think consumers will eventually pay for a quote, and I'm creating the model for it now. It makes sense because if they (the consumer) know they would be getting a for sure, ultra low and very competitive price with full details on the vehicle, they'd pay to get it... versus what they really get now, hoping that their free quote request will be replied to. I know that in my market, I'm the only guy with my brand to make real follow up calls, and follow up emails hand written, versus the other guys who still send the same boring emails devoid of any substance - asking them to call them to get the information they requested. I'd be willing to try to get customers to pay for a quote. It's unchartered territory, but isn't that where entrepreneurs like to roam?

Your concept relies on all dealers not providing prices quotes over the phone. I know many that do currently and more that are moving that way. It's up for healthy debate but I wonder if consumers are willing to pay you for the privilege of paying you.

Right now, in general, all leads look the same, and therefore are pretty much priced the same. Yet, some of us posting state that some lead generators have better quality leads than others. So why is it that the lead generators all charge pretty much the same price per lead? COuld it be they don't know what leads close outside of the retailer the lead was sent to? Probably.......lead generators (including dealers own websites and microsites) can't provide true closing rates for those leads. They can only tell you if a lead closed at your dealership, not whether it closed at all, or if it closed at a competitors store. These companies would need to have registration data to do that, and the ability to match lead information to other demographic info to confirm who the lead is.
Your best bet to verify lead generation companies close rates is to have a third party verifying all your lead sources and inform you of what is happening to your leads in the marketplace in general, not just at your dealerhship!

McCoy,

Your scenario sounds great for that 1 out of every 100 that goes through it. Realistically speaking, that doesn't happen an overwhelming majority of the time.

My background is Marketing and eCommerce, not cars. I handle those duties for 2 large domestic dealerships. I'm hourly analyzing my website traffic, phone traffic and walk-in traffic to better understand where these customers originate. I'm actually an employee of those dealerships and not a vendor.

Only had one of those dealerships a short time so will use the one I have the most information gathered.

I currently get in the neighborhood of 30,000 unique visitors per month, 18k of which are pre-owned. I used several different sites to drive and track our website traffic. I used just one to pick up traffic from cars.com and autotrader.com so it's fairly easy to see what they do regarding referrals.

cars.com is well behind autotrader in page referrals 242 - 88.
that's real numbers, not in hundreds.

granted, we spend more money with autotrader and I see spikes with spotlights.

unique phone calls are 43 - 12, again for autotrader.

I sold 2 cars.com customers last month.

My website visitors just on one site, nothing but SEM/PPC no SEO. are 8,000+ uniques.

My unique phone calls off that same site are 472 email leads are over 300

When I said I was there because my competitors were, I really meant that. I get nil to nothing off of those sites. With pricing, especially Autotrader going the direction it is, I'm soon going to stop thinking "it's so little money we have to be there"

Obviously, the koolaid tastes better to you because it pays your bills.

At this point, it's just another bill to me without ROI

A little background on me, I have been involved with automotive internet sales for over nine years now and I have dealt with I think every vendor out there including special finance vendors etc.

If you take a real hard look at third party lead provider's I think you might agree that we are competing for the same leads on the web as the providers we purchase from. So what happens here is we perform SEO and SEM then we turn around and purchase leads from providers that have advertised our products for less money than we want to sell them for such as carsbelowinvoice.com who buys those leads? I know, do you? Try this, type the name of your dealership into Yahoo such as Jim Glover Chevrolet. You should not see Jim Glovers name being used although I am having a hard time with Nextag.com they sell those leads to? So what is happening is these lead providers are using our names of our dealerships to entice consumers to their websites right next to ours. Then we pay them up to how much a lead, (better if it is scrubbed right) So what I want from third party lead providers is to stop advertising on the same plat form as I am advertising on, but with no wakeup call from all dealerships I do not see that happening. Think about it, why pay for someone else to advertise right next to us on the same venue? Makes no sense does it? But we have all been doing it for years, yet who has woke up to the facts?

I have not purchased third party leads this last year, instead I have taken that money and put it into NAME BRANDING, or direct advertising, We enjoy a great amount of quality leads, and better name branding for the store. Now what are you going to do?

Also Come on, Autotrader and Cars.com are NOT third party lead providers unless you purhase new lead plus from Cars.com Autotrader and Cars.om are advertising venues, we dealers pay to advertise on these sites..

Just an opinion of another Internet Director

I am the General Manager for www.duPontREGISTRY.com. We are not a lead provider, but rather an online advertising media. Our niche is putting our affluent marketplace to work for highline dealers. I know that this may not fit in the current discussion but I would like to ask a couple of questions that I think may apply. “How important is your relationship with your account executive,” and, “What do you want/expect from them?”

Thanks

Well I weighed in awhile ago and can't believe the traffic this thread received. In reading some comments, I guess this can be broken down a couple of ways.

One-

Lead providers are those that provide leads. I would usually define that as a purchased lead, including but not limited to; Dealix, Carsdirect and Cars.com's NewLeadsplus. These leads are supposed to be scrubbed, proprietary leads from some unknown source in Leadland.

What I want from them is along the lines of what Jeff said. I want what you are claiming to be selling to me. I want real leads with a chance of conversion. "Scrubbed" has to be the most abused, subjective word in our business. I want one company (or more) to step up and deliver (yes, like the good ole fax days).

Problem is; I think this model is going to be obsolete soon. People don't just hit one source. So even though they might apply for something and it isn't being sold by another lead provider, doesn't mean that they haven't or won't fill out more inquiries elsewhere. Too many unique lead providers means none of them are unique anymore. I could be wrong, but I think this is going away.

Two-

Leads that are derived off of our inventory. I have been doing a lot of thinking on this lately and still stick with my first comment. However, I would like to add a bit more clarification.

Yes, seeing page views is neat and could provide some point of reference. I still firmly believe it is not indicative of true performance; both internally and externally.

I believe that there is still no way to track all the people that simply walk in, view a map, or don't get tracked at a showroom level. Therefore, it should be treated just other advertising and not held to a completely different standard.

I think a fix would be change the format completely. Maybe make the browsing only available by creating an account. Integrate RSS feeds for vehicles they want. Do targeted marketing and allow Dealers to buy specific ads. Send a summary of people who actually clicked on your ads for the month or create a neutral tool that will cross reference it with your DMS sold vehicles. Give premium placement to the dealers with the most photos, prices and custom comments. Allow the good dealers to shine.

You know what they say, "The definition of Insanity..."

Frank Wrote:

"If you take a real hard look at third party lead provider's I think you might agree that we are competing for the same leads on the web as the providers we purchase from. So what happens here is we perform SEO and SEM then we turn around and purchase leads from providers that have advertised our products for less money than we want to sell them for such as carsbelowinvoice.com who buys those leads? I know, do you? Try this, type the name of your dealership into Yahoo such as Jim Glover Chevrolet. You should not see Jim Glovers name being used although I am having a hard time with Nextag.com they sell those leads to? So what is happening is these lead providers are using our names of our dealerships to entice consumers to their websites right next to ours. Then we pay them up to how much a lead, (better if it is scrubbed right) So what I want from third party lead providers is to stop advertising on the same plat form as I am advertising on, but with no wakeup call from all dealerships I do not see that happening. Think about it, why pay for someone else to advertise right next to us on the same venue? Makes no sense does it? But we have all been doing it for years, yet who has woke up to the facts?"

Amen. Another reason why I don't and haven't used them for awhile. Put this in any other venue and you would say that it doesn't make any sense. So why do we support them? Afraid of missing the market on something?

Either way, well put Frank.

Here is what I want.
1.Exclusive real leads that are actually in the market,not submitted by some unknown gimmick
2.Coversion with metrics reporting to justifly the cost of the product or seervice
3 review of reporting with best practices in this ever changing section of the market.
4. a company that is on the cutting edge ie leads,video,blogs to optimize seo and sem to stay out front of the competition not duplicating it.
Just a Thought!!!

JL..."Not sure about you, but my mother always told me "if it sounds too good to be true..." and I'm sure you know the rest. If you are holding out hope that a new start up is going to come along and advertise all of your vehicles with customized video presentations, secure credit apps that integrate with your CRM and, hell, detail all of your cars before they take 47 photos of them and all at no cost to you because they "need" your inventory, I'm going to suggest that you don't hold your breath. That makes as much business sense as a dealership giving away cars to build brand loyalty.

You have points but you need to understand that looking at this is an "inherently lazy" approach and "they can do all" look at it.

Custom video? slideshows are not video! and looks still like crap and DOES NOT SELL ANYTHING but can entertain and "maybe" get to the next step of calling for more info or to test drive.

Secure apps? be real about that one because this is not a buy it now checkout for a pair of sunglasses and credit leads are what they are mostly GMD's or the deal was made and now its time to apply securely for the loan online(fax the app still works as well)

Detail your cars? when did porters/detailers becomes part of advertising or lead providing?

Giving away cars? happens everyday...price leaders

Anyway you cut it the only stat I count is if the rep has spoken to the client after the lead. Is there a deal to be worked or appoint to come in and demo? Until then any correspondence is still a hello how are you I was e-driving by and not a customer yet.

Cars, Autotrader and others are not by my definition lead providers in the primary, they are a marketplace to display your vehicle in a collective virtual setting and the lead is a by-product that you get sold the "sizzle" not the steak by cars.com and autotrader.

When is the last time you invited someone to cook your dinner in your own home. It's kind of expensive and that is my point and do agree it may not become totally free but a lot cheaper when someone does offer a much better service that truly is an ad content provider of your merchandise.

Why do you think Cars.com is getting into the website business?

I apologize in advance if this is a bit of a fragmented opinion/response...
Pete

Just reading these comments, it's amazing how a discussion of third party lead providers turns into a crusifixion of Auto trader, and it's justified. Truth is that the autobytels, autousa and dealix's of this world are no longer viable looking at ROI which is the bottom line determinate.

As to Autotrader, that's a dog and pony show that has run it's course. Cars.com is still doing well on our ROI reports because of it's much lower cost.

Our own website is the mainstay of our business development center and we are working on situations that convert to hits on our own website. It seems like the more we market the website via TV, newspapers, the better we do.

I am open to any suggestions for marketing our website.

Steve from NJ

Steve,

One of the best ways to market your website outside of search engines is to promote your site to your existing customer base via email campaigns and POS material in the store.

Make sure all employees are collecting email addresses at all times. A great way to email using a soft sell approach is through regular newsletters such as IMN Loyalty Driver. Hopefully, this helps...

I want my third party leads to have more serious buyers. I want my third party lead providers to put a disclaimer on their sites to tell customers not to submit a lead unless they are really shopping for a car or are in the market? I do not want to pay for garbage leads. Now in no way am I saying not to buy them because we need third party leads to supplement out lead count. If the leads are worked right they bring in more deals every month. Focus on generating your own leads before spending money on others.

A Lead Generator's Perspective:

First and foremost, I'm an Internet marketing guy who likes cars, not a seasoned car guy by any means. I've been involved with Internet marketing since 1999 and have piloted new technology with MBUSA back in the day when the Internet was just supposed to be a fad.

I do have a unique perspective in the sense that I've experienced the full spectrum and life-cycle of a lead by working with a couple of local dealers and analyzing leads and data at the BDC level and from writing ad-copy for nearly 1 million keywords to generate the app.

I think there is plenty of blame to go around and this is why I lament on some days about lead generation at http://leadinreview.com - Auto dealers and lead generators have created the monster that is third-party lead generation today.

Here are some of the things "pure" lead generators deal with on a daily basis:

- PPC fraud on all the major search engines
- PPC abuse from competitors
- Un-predictable traffic spikes from major search engines.
- Form fraud
- Server attacks
- Brokers & lead aggregators post rejecting and stealing our data.
- Never ending criteria changes for leads
- Bogus or phony lead returns
- Non payment from lead brokers and aggregators
- Non payment from retail customers or direct auto dealers
- Complaints from customers because dealers never call

For every lead we generate that gets submitted across the network, that same lead can be offered to the same aggregator 100 times in a matter of seconds due to lead overlap or coverage overlap. There are just too many entities trying to get in the middle of the process. This is why we are looking to work directly with auto dealers as an arm or extension of their lead generation and marketing.

Why are third party lead generators still needed? Because for "real" or "pure" lead generators - companies that actually generate the lead and not simply try to resell, we can generate the lead more cost effectively and efficiently than an auto dealer.

Lead generation is hard work and extremely competitive if you are going to use any type of PPC.

As mentioned in a previous post above, I believe dealers need to start looking at ROI as it is the primary indicator as to how effective a particular lead source might be.

Lead providers that cannot demonstrate some measurable ROI for a dealership should be dropped.

Got a question on third party lead generation? Drop me a line and I'll be happy to answer as best I can.

This is surely one of the well read posts. The concepts provided and shared are really helpful for both dealers and buyers.

Leads is a business that I've been contemplating getting into for years.  But I've shied away from doing it.  My business is a post for free, or pay for top priority in the inventory lists kind of site.  No commission on sales, and is generally free to use.  if anyone would be interested in purchasing leads from me or setting up some type of relationship, check out my site and let's talk.  Hot Auto Deals dot com is the site.  Check it out and let me know...

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I think someone should revive this thread so we can compare and see if any real improvement has happened with each third party source over time!

I would be very interested to hear comments about experiences with third party leads through a manufacturer