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Friday, September 01, 2006
Does Autotrader.com or Cars.com Work Better For Dealers, or Traderonline?
My first point of information, and probably the most confusing thing to most dealers is that Auto Trader magazines are not the same company as Autotrader.com (at least at the present time, but soon there will be some changes with the business relationship between the two). Cox Communications owns half of Autotrader.com and also half of Trader Publishing (Auto Trader Magazines). Each is treated as a separate company, and therefore compete against each other for marketshare. Autotrader.com got their name from the widely recognized brand of magazines in 1999 when the online auto advertising industry was really getting started. There are even business relationships between the two such as magazine ads automatically showing on Autotrader.com as very basic listings. A couple of years ago Trader started Automart.com and Autoextra.com because while they had capitalized on specialty markets, they had essentially missed the boat on the automotive sector of online advertising. While Autoextra.com and Automart.com have significantly lower traffic numbers than Autotrader.com or Cars.com, I'll include them in this cross-analysis because their market penetration is significant with the print publications.
Autotrader.com: Self described as the "Biggest, Best Used Car Site on the Planet", Autotrader.com is definitely the most widely recognized site out there. Their marketing campaign for 2006 was somewhere in the neighborhood of $60 million and expected to make 1 Billion impressions. If you're looking for the most shoppers, this is where you want to be. Autotrader.com boasts over 2 million vehicles for sale at any given time, and recent traffic reports show about 12 million visitors per month to the site. Consistently ranked at the top of the JD Power Reports for customer recognition and dealer satisfaction. An impressive resume indeed. With all this comes some downsides from the dealer point of view. Such a big site means your cars are in the mix with literally millions of others. Autotrader.com is geared toward driving local buyers to your lot, so this helps, but if you search for a vehicle in your local area you'll notice that there are still a lot of competitors you're going up against. The other issue with Autotrader.com is price. If you want to be with the "biggest, best" site, you're going to have to pay for it. Overall dealer impression from the people I've spoken with: a great site that you have to use to stay competitive, but pricing makes it hard to diversify your advertising money.
Cars.com: Not as many vehicles for sale, not as many dealers, not as highly regarded, but worthwhile for sure. As I pointed out in the previous paragraph, not having so many cars for sale or competitors can be a good thing for the people that use the site. Cars.com is really making a run at Autotrader.com, upping their own advertising campaign significantly. They're aligned (and owned) by several major newspaper companies. They actually got their start in response to declining newspaper classified revenue. This association with the local papers and websites through co-branding, etc. really drives local buyers to the site much like Autotrader.com has done. The major advantage of Cars.com is the price. They have many options just like Autotrader.com has, but the price is typically about 1/2 to 1/3 the price of Autotrader.com. A good bargain, but one thing I've really noticed in speaking with dealers is that Cars.com seems to do very well in some markets (Philadelphia for example) and not well at all in others.
Traderonline: The Trader websites of Automart.com and Autoextra.com have similar advantages as Cars.com. Price seems to be the major advantage. Trader knows they're far behind Autotrader.com and Cars.com as far as features and traffic, so it makes sense pricing is lower. They also seem to be using a business model to keep other arms of the company alive and well (i.e. Auto Trader, Auto Mart and Auto Extra magazines), so they have programs that are comprehensive across several media. This provides advertisers with a great opportunity to diversify their advertising for a low cost, even though it's all within the same company. What most dealers have told me is that the Trader sites don't come close to Autotrader.com or Cars.com in terms of leads/sales, but the pricing structure makes it an appealing addition to other advertising campaigns.
The bottom line: Talk to 100 dealers and you'll get 100 different answers as to which online site is best and why. These are just some common statements I hear on a daily basis. Research shows that most car shoppers visit both Autotrader.com and Cars.com, and some visit the Trader sites. There are going to be shoppers on each site that don't visit the others, so it all comes down to advertising reach.
The old saying seems to hold true: you have to spend money to make money, and and it seems like the more you spend, the more you'll sell. If you can afford it, you'll get the best return by diversifying your advertising money. If not, determine which is best for your particular market, what's going to give you the most bang for your buck, and which one you think will really bring you the most local/regional customers.
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