AOL Autos dropped AutoTrader and has selected Vast to power AOL Autos’ used car marketplace. The changes are scheduled to launch on AOL Autos in the first quarter of 2008.
Apparently AOL Autos and Vast.com are setting out to offer something a little different for the consumer and dealers.
"A rich set of search and filter tools that will make it easy for consumers to search for and find the used car they are looking for. Vast.com’s robust optimization technology will ensure that consumers are presented with the cars most likely to convert to sales, resulting in higher quality leads for dealers."
Something else I found interesting; dealers have several options in the way they pay and promote their inventory on AOL Autos.
It’s something a little different then what we are used to.
I had the opportunity to speak with Doug Eddy, Director of business development for AOL Autos and Kevin Laws, CEO Vast.com about their joint venture.
Jeff: Dealers depend in part on portal traffic. The portals have traditionally been powered by either AutoTrader or Cars.com. Do AOL Autos and Vast bring something different?
Doug: AOL’s new used car experience is really focused on bringing something better to both the consumer and the dealer. For the consumer, we want to provide the most complete set of listings to search, along with the best search tools. This is very different than just providing cars to our users from a restricted set of dealers. For the dealer, we want to make sure the money spent goes directly towards creating car sales, not just towards paying to appear on AOL. That’s why we call it the open marketplace.
Jeff: What do you mean by “open” marketplace?
Doug: It’s “open” in the sense that everybody can participate. Rather than displaying the inventory of just one marketing partner, AOL will now show any car – even if we aren’t paid to show it. This means AOL Autos will offer a highly user-friendly experience, allowing users to search across the broadest set of used car inventory in a single destination – over 3 million used cars. It’s still a marketplace in the sense that dealers can absolutely “pay for performance” through their existing marketing partners – but they don’t need to pay to just be included in the experience.
Jeff: Describe “pay for performance pricing” – you mean paying for clicks?
Kevin: "Pay for performance" just means that you set the price you want to pay, but you don’t actually pay it unless you get the result you were looking for. Depending on the deal you have with your marketing partner – that could be a click, a lead, a call, or even a sold car. The bigger issue is that you can choose on what basis to pay. For example, you don’t need lots of leads on a Ford Escape Hybrid on the lot – it’s going to move anyway. Why not pay nothing for that, and instead pay a lot more for that car that’s been on the lot for more than 30 days?
The open marketplace supports all of that. You should only pay for what is valuable to you.
Jeff: How does a dealer go about figuring out how to promote at a granular level?
Kevin: With Vast.com, the dealer doesn’t have to. In a sense, the open marketplace will do this automatically – it doesn’t just put the cars with the highest paying leads at the top. The system automatically takes into account the likelihood that car will appeal to a customer. A car that costs $10,000 over blue book is not likely to generate a lead. No matter how much the lead is worth, Vast won’t put that car at the top. The dealer doesn’t need to do anything to take advantage of that capability – the system will automatically take into account both payment and the likelihood that the car will actually generate a sale.
The other capability – the ability to set the price per lead (or even sale) – is one of the main reasons we are working through existing marketing partners. They can optimize for you, rather than having each dealer try to go down to that granular level.
Jeff: So the search results are based on an algorithm that returns the customer the best “value” for what they are searching for?
Kevin: Basically, yes. It tracks what customers are most likely looking for given their behavior so far. Sometimes that is best value and sometimes it is some other aspect, like right color. The algorithms automatically match what the customer is looking for to the car most likely to actually become a lead and a sale.
Jeff: What do you need the auto marketing partners and Internet service providers for? Why not go direct to dealers?
Kevin: This is actually very related to the last 2 questions. We don’t want to make a new system that the dealers must learn. Instead, Vast’s mission is to “innovate from within” – working with existing channels to make the buying and selling process more efficient. This way many dealers will participate automatically without having to do anything but choose the right marketing partners.
Additionally, Vast is focused on deep technology to make automotive buying for used cars work better on the Internet. We don’t have a sales force or account managers to contact dealers directly. Instead we have the technology that can execute promotions in an innovative way, which gives the service providers better capabilities to market to their dealers.
Jeff: Who are the current marketing providers? My readers would like a list of partners they can work with.
Establishing a relationship with Vast.com / AOL Autos is fast and easy for your marketing partner, so any partner you work with today will be able to manage your listings on AOL Autos. Vast.com and AOL Autos already have relationships with many Automotive Service Providers such as AutoByTel, Zag.com, Dealix, and AutoMart. To find out if your service provider is a current partner, please email us at [email protected]
Jeff: Is there set pricing or are the marketing partners establishing this? And, will some marketing partners be able to offer higher placed listings?
There is not a fixed price that will be charged for promotion through your marketing partner. Many existing marketing partners are including it as part of the program they already offer (either fixed fee or cost-per-call/lead). You may not need to do anything if you already use one of the existing partners.
Some marketing partners will be able to get higher placed listings based on what they pay to participate in the open marketplace.
Jeff: How does this compare with how AOL currently promotes dealers? How will the relationship with Vast.com change the current way dealers work with AOL?
Doug: Today, used car searches are sent to AutoTrader. With this change, dealers just want to make sure their current service provider is putting their inventory in Vast.com, or they can put it in themselves: http://www.vast.com/info/automotivedealers.
For those who are interested in broader packages, we absolutely have the capability to sell those as well. Please contact us at AOL.
Jeff: When will the AOL autos used car marketplace be available?
Doug: Mid-to-end Q1, 2008
Jeff: What should interested dealers do next?
Kevin: Two things:
- Immediately talk to your dealer service provider (CDM Data, Dealer Specialties, eBizAutos, Homenet etc.) and ask to have your feed sent to Vast.
- Talk to your marketing partner to make sure they are marketing your
inventory on AOL Autos and understand what promotion and positioning
you get from their program.
You can also contact Vast.com directly: [email protected] or visit http://www.vast.com/info/automotivedealers.