The Wall Street Journal recently posted an interesting article* about third party lead providers. Sites such as TrueCar, Cars.com and AutoTrader, once mainstays in a dealership's digital ad spend, are now falling by the wayside. What some dealerships are finding is that independence from third party lead providers has not resulted in a loss of sales, rather the opposite. Many dealers are noticing upticks in leads and sales when the shopper's focus is brought to their website and their brand.
Dealers pay monthly and/or per-lead fees from these sites in order to drive sales on inventory. What many now claim is that third party lead providers are using this revenue to boost their own brand, which in turn lessens the dealership's brand. In addition, some sites such as TrueCar have been accused of acting as if they are the ones actually vending the car instead of the dealership where the vehicle is actually being sold.
Third party lead providers originally got their fame by becoming full of information about the vehicles and less about a hard sell, which helped to gain the trust of many customers who have been leery of stereotypically untrustworthy car dealerships. A shopper could theoretically do all of their research and submit a lead all on the same site. But dealers are beginning to fight back by adding similar research tools to their own websites in order to compete. In order to prevent a fall-off in business, some third party lead providers have moved to a pricing model that only charges upon the successful sale of a vehicle. While this may help save on the cost to a dealership, it does not address the issue of branding and where the customers are actually browsing and shopping online.
Every dealer has to decide where they will source leads, and for some, third party lead providers are another way to show the world their inventory. For others, opting for independence and building their own brand will result in longer lasting benefits. How are you all dealing with getting traffic directly to your website vs using third party vendors?
*http://www.wsj.com/articles/car-dealers-aim-to-curb-online-rivals-1434204002
Comments