AutoTrader is expanding beyond “new” and “used car” ads into “auto services” and “used parts.” The move promises to put a lot of pressure on other online auto sites, especially eBay Motors, which is preparing a relaunch that will move it beyond used parts to include services, local ads and other ecommerce.
CEO Chip Perry, a keynoter at The Kelsey Group’s ILM conference in Philadelphia last week, said that eBay and other car portals haven’t really caused any problems for AutoTrader. While the Cox Enterprises-owned 1,600 employee site doesn’t release specific data, Perry claims it gets “four times” the usage of newspaper consortia-owned cars.com, and is bigger “than the next two car sites combined.” Moreover, the site is “easing in on The Top 10 list of Internet sites, and is “one of the Top 2-3 fastest growing sites.”
Perry said that AutoTrader’s advantage has been its exclusive focus on advertising, as opposed to lead generation and other forms of ecommerce. Some car sites get lead fees of $25 per car, but only 5-10 percent of those leads convert into sales, he says. That translates to $500 per car sold. Advertising on AutoTrader costs closer to $100 per car. “Why would we de-volve ourselves to a Pay-Per-Click model?” he asks.
Pay-Per-Click models and the need to fill out lead forms also hurt the customer experience, said Perry. . Since the site isn’t counting leads, “we don’t care if consumers pick up the phone or send email.” Eight of ten consumers, in fact, like to call the dealer directly.
Free classifieds don’t cut it either – although AutoTrader offers a free tier to advertisers, just below its “premium” and “featured” tiers. “We have a noticeable statistical difference between tiers” said Perry. He also noted that even his free tier gets heavier lookups than free sites like Craig’s List. “Free classifieds don’t bother us.”
All this – plus the power of a 300 person sales force, and a commitment to plow 20-25 percent of revenues back into marketing– results in the site outpacing its rivals in terms of listings. In Philadelphia last week, for instance, Perry noted that AutoTrader had 425 listings for a Chevy Suburban within 25 miles of the city. Meanwhile, Cars.com had 92, Cars Direct had 38, Autobytel had 11, Craigslist had six, eBay had two, and the newspaper also had two (although most of the actual “newspaper” ads are probably mixed in with the cars.com total).
Perry, in fact, comes from a newspaper background, having helped develop The Los Angeles Times’ digital efforts under Times Mirror. He anticipates that newspapers will eventually find their way. But newspapers “generally have a defeatist attitude” when it comes to cars, and just aren’t the right mix for the car business – partly because newspapers are still defined by their local circulation area. “More than 50 percent of the time, people search more than 100 miles,” he says. Ultimately, Perry also doesn’t anticipate that cars.com can provide a lift, a la CareerBuilder in recruitment, by bundling print and online together. They haven’t changed their car advertising in 75 years, he noted.
I was surprised by some of Mr. Perry’s competitive claims. Based on my own personal brand awareness, I wouldn’t have guessed that AutoTrader was that dominate over some of the other competitors.
Just for fun, I did a search for Chevy Suburbans within 25 miles of Philly (19019 zip actually). I only came up with 162, which is much different than Mr. Perry’s claim of 425.
Suddenly, I doubt all of the other metrics he sites as well. Is there an independent source for comparing traffic levels? It would be interesting to see if his claim to have “four times” the traffic of other competitors fails under similar scrutiny.
You are right, JackOfAllTrades. The numbers don’t match at all…I checked Compete.com for some traffic estimates. They show AutoTrader at 5,564,966 UV/month and Cars.com at 3,603,126 which is hardly a 4:1 ration, if I am doing my math right..it is possible that Mr. Perry might be referring to Page Views or Searches or some other metric, which are extremely susceptible to differences in site design and web tracking methodology. Alexa is another free tool which gives some directional information. There data also doesn’t agree with the presentation (http://www.alexa.com/data/details/traffic_details?site0=cars.com&site1=autotrader.com&site2=&site3=&site4=&y=r&z=1&h=300&w=500&range=3y&size=Medium&url=cars.com)
Peter, if you have the slides from presentation, do you mind posting it?
This is Chip Perry’s Response:
Peter, I can assure you that every statement I made at the conference was entirely factual.
Regarding the question about the number of listings I cited, our search results pages diplay on the first page the number of “matches” or listings that fit the consumer’s search criteria. The number I cited at the conference was the number of actual vehicles contained in the search results, which is greater than the number of “matches” that we show at the top of the page. The difference comes from the number of actual NEW VEHICLES that are included in the search results along with the used vehicles that match the consumer’s criteria. For example, when you do a search for “all” (new and used) Audi A8s within 10 miles of zip 30309 (where I live in Atlanta) you will see we display 11 “matches.” You will also see that the first “match” actually contains four individual new A8s from Jim Ellis Audi. We are the only site that presents new vehicle inventory this way. We call this kind of listing a “New Car Aggregate Listing” because we aggregate all the new vehicles from a dealer’s inventory that match the consumer’s search criteria into one listing. We do this to present a more easily scannable search result list than if we listed all the new cars individually. This type of search results presentation has been very well received by our users in both surveys and usability tests. So if I had used this example in Philadelphia I would have said we have 14 Audi A8s even though the top of the page says 11 “matches.” I probably should have made this clear during my presentation, but I hope this clears this up and I hope you agree that the comparison I made was indeed fair. By the way, we have a change in the works that will display the total number of vehicles, not matches, at the top of our search results pages. And you may also be interested in knowing that this unique way of displaying used and new inventory (we are the only major automotive site to do it this way) is very well received by our audience which is made up of 33% new vehicle intenders and 67% used vehicle intenders. Many consumers bounce back and forth between considering a new or used vehicle during their shopping process, and many consumers like to see a new car dealer’s actual new vehicle inventory before visiting the store or generating a lead.
Regarding the question about our traffic levels compared to our competitors, the data I cited came from a publicly available October 2006 Comscore Media Metrix report, which does indeed show that our users’ average monthly time on site is about 2 and 1/2 times higher than cars.com and 4 times higher than most of our other competitors including KBB and Edmunds for example. During my presentation I cited comparative statistics only about time on site, not unique visitors or any other audience metric.
I don’t dispute the Alexa or Compete numbers but in the audience measurement game there are many different sources and you know as well as I do that they all have their various and sundry strengths and weaknesses. We are very confident that among the automotive shopping sites we have by far the largest audience of in-market car shoppers and we are in fact facilitating by far the largest number of actual vehicle transactions. We have a large amount of anecdotal feedback from our dealers that supports this, and to prove the point more broadly we’ve just completed a major study on this which we will be releasing at the NADA conference in Feb 2007.
Don’t hesitate to ask if you have any other questions and feel free to share this with your colleagues in the blogosphere.
best,
chip
The interesting part of Chip Perry’s defense is that it seems similar to a shady dealership trying to explain why all of the sudden the price of the car just went up because of a trade. I can’t seem to find those “new car vehicles” even when I search using the “all” criteria.
Moreover, cars.com has always been easier to find a new car with it being one click away from the homepage. Whereas AutoTrader actually sells much of its new car traffic to Dealix which is a pay per lead format . . . something Mr. Perry says they don’t do. Here’s the path straight off the Trader home page:http://autotrader.dealix.com/step1.asp?refid=88888&detid=50000
Clearly he was caught fudging some numbers and spouting unsupportable statements. One doesn’t present data such as the number of Suburbans in Philly and actually expect someone to do a search and find far less than 400+. However, I found 193 to be exact compared to Car.com’s 105 based on Center City Philly Zip 19101.
The other part that Chips neglects to explain is that from a consumer standpoint Trader is far more cumbersome to use compared to other auto sites. Thus longer time spend on site trying to wead through their pay for better placement listings. When you look the Nov.06 Comscore Data, Trader shows 4.95 mm uniques and Cars.com has 3.86mm. 28% difference in audience not 400%
Thanks for taking it up with Chip, Peter!!
The way I see it, AutoTrader probably has the largest used inventory base (may be because they let dealers post vehicles for free…) and the largest audience (except for eBay motors, which has other categories too- parts/bikes etc.)…I guess they don’t need to “work” the numbers in such an obviously misleading fashion.
Nevertheless, I commend Chip for being so responsive to bloggers. Its a welcome trend in business leaders of today.
My only beef with autotrader is the inability to sort results by distance. IIRC, this functionality was previously available on autotrader a number of years ago.
IMO, cars.com is much more useful for that reason alone.
As an internet manager at car dealership, i can say hands down that autotrader is the 800lb guerilla. 50% of our used car sales come from them. we’ve begun using cars.com as well, but so far we get about half of the leads/contacts from them as we do autotrader (with a lower closing ratio).
The comment about autotrader aggregating all of a dealers new car results as a single match is 100% true - and VERY frustrating for the dealers. I guess it doesn’t matter though, as autotrader is nearly worthless for new car sales.
Well well…some uninformed bloggers taking time from their busy schedule of firing off opinions (of subjects which they have no working knowledge of, other than their Alexa link in their favorite places) to spout some ‘research’ to dispute AutoTrader’s Chip Perry. :-) Let me state this: I have been an Internet & Sales Manager in the Auto Industry for 9+ years…tried all the ad sites & sources (all media…TV radio, magazines, tent promos, mailouts, giveaways, you name it) and all have some measure of success…BUT: AutoTrader IS the 800lb Gorilla in the Auto Marketing realm, like Chip Perry’s stats & percentages, or not. NO other single media source sells more, represents the dealership & their product better, nor is more cost-effective per sale. I don’t know what type of surfboard you rode in on, but Cars.com’s site is mediocre at best, and I pay them every month. You can’t get their lazy arsses to give us dealers the 2000-character ad for the dealer comments like AutoTrader does, you can’t ‘Spotlight’ a single vehicle like AutoTrader, the backend tool for Cars.com to load and edit the ads is primitive, buggy, and largely non-functional (something I don’t expect you to understand), their reps are untrained, uninformed ’suits/skirts’, and can’t facilitate any improvements, hell- they can’t even get Cars.com to fill in the subject line of a customer’s email with the vehicle that they’re looking at. I could go on, but nit-picking the 1# provider in our industry only makes you realize that the others are getting their butts whipped thoroughly. The industry ratings attest to this…look it up. Thanks for letting me ‘blog’.
You buy at your own risk on eBay… You can’t always expect to get what you pay for.