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Comparing the Value of Cars.com and AutoTrader.com

How cost effectively your advertising drives traffic to your store will impact sales and employee retention. Good salespeople can most often be found at stores with a good reputation and a good ad program providing a consistant flow of store traffic via phone, email, chat, and walking in.

The one dominant difference between AutoTrader.com and Cars.com is that AutoTrader.com tiers the listings and Cars.com does not. This distinction has grown over the years as AutoTrader.com gains penetration for its premium product and consumers search across a wider radius.

It is not accurate, in the strictest sense, to say that Cars.com is like being a Premium dealer for every brand, because there are no dealers getting left out. In a market where no dealers purchase the premium package, the Featured version of AutoTrader.com functions similarly to Cars.com. In markets where many dealers purchase the premium package, Cars.com is more similar to the Premium version of AutoTrader.com.

Metro markets tend to have a high concentration of premium dealers because of intense competition. In rural areas, most shoppers expand their search radius beyond the default setting, pushing more Premium dealers into these searches.

There are two ways to compare Cars.com and AutoTrader.com:

1. Cost per Contact

2. Cost per Vehicle Details Page (VDP)

Cost per Contact is ideal, but it is difficult and involves lots of assumptions. Is a chat worth as much as a phone call? What is an email worth? What are website transfers worth? Are printable ads and map views a reasonable estimator for walk-in traffic? How does one reconcile the completely different reporting methods of the two companies for these metrics? How much duplication is taking place? Whatever your answers are, they will change over time, as your store's operational performance improves faster in some areas than others.

Cost per VDP is accurate and easy to calculate. A VDP occurs when the shopper selects one of your vehicles to explore further. Few shoppers contact the store without looking at the details of the vehicle, so this is an excellent head-to-head measurement. How many VDPs convert into store contacts depends heavily on the merchandising of the vehicles, which should be from the same feed to either service. On Cars.com's Online Ad Reports, a VDP is titled "People Requesting Details On Your Vehicles." The same metric on AutoTrader.com's reporting tool is titled, "Detail pages viewed for your inventory."

Divide the Cost of the service by the number of VDPs delivered to get the Cost per VDP. This provides a very good comparison of Cars.com to the Featured version of AutoTrader.com. A Premium user on AutoTrader.com could run the same metric the same way to get the average cost per VDP from the service. But buying AutoTrader.com involves two questions: Should I buy the Featured version?, Should I upgrade to Premium? It is best to separate these out, as I pointed out in a story last week (Going Premium on AutoTrader.com http://RevenueGuru.com).

Every upsell product on Cars.com or AutoTrader.com either creates more VDPs or improves the conversion of VDPs into contacts. If your rep can't show you how the product improves one of these two metrics and help you measure the Cost per VDP or Cost per Contact, then don't buy it. For most dealers, these services provide excellent value, but results vary based on geography, inventory, pricing policy, and store operations. Don't guess at something as important as cost-effective store traffic.

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Replies to This Discussion

Permalink Reply by MANNY LUNA on October 7, 2010 at 7:13am

Permalink Reply by MANNY LUNA on October 7, 2010 at 7:14am

Permalink Reply by MANNY LUNA on October 7, 2010 at 7:15am

Permalink Reply by MANNY LUNA on October 7, 2010 at 7:33am

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Permalink Reply by Dennis Galbraith on October 7, 2010 at 8:28am

Why do companies selling advertising products put up the worst ads at the worst possible time? Manny, I can't read all of your charts, but they don't appear to demonstrate your product on a cost per VDP basis, or anything else that includes a dollar sign. You are better than that.

Comparisons of traffic-now advertising must be on a cost per activity basis. For many dealers, the right choice may be AutoTrader.com, Cars.com, and SMA Alliance. One needs to look at the cost per activity, start with the most cost effective, and stop buying when the next available option is at or above the break-even point.

In a transparent market, dealers who don't demonstrate the value of their vehicles lose sales to those who do. Dealers need to become as savvy at procurement as their customers have. If advertising vendors can't or won't demonstrate the cost effectiveness of their products, then I strongly suggest their products should not be purchased.

Permalink Reply by aaron kominsky on October 7, 2010 at 10:18am

MANNY LUNA said:

Permalink Reply by aaron kominsky on October 7, 2010 at 10:18am

aaron kominsky said:

MANNY LUNA said:

Permalink Reply by aaron kominsky on October 7, 2010 at 10:20am

I can't read anything here either it's too hard to understand and your company as any other has its good points and bad points let's be fair ok ?

Permalink Reply by Martin Dinh on February 23, 2011 at 8:24pm

This discussion has nothing to do with SMA alliance. Please stick to the topic. Cars.com and Autotrader.com are 3rd party vendors that 85% of the industry uses. So in respect to those of us who need this information, please keep it relative to the topic.

Permalink Reply by Jackson Griffin on February 23, 2011 at 8:48pm

Aaron,

Do you know if Autotrader and Cars.com have the same definition when it comes to counting/measuring a single VDP?

Permalink Reply by Dennis Galbraith on February 23, 2011 at 9:32pm

Aaron,

I think it has been pretty well established that both organizations have the same definition for a VDP. A VDP is simply a specific page view, as is an SRP for that matter.

The face validity for VDPs being counted the same is that conversion from SRP to VDP tends to be somewhat lower on Cars.com when looking at same-store data over the 12-month period. This is exactly what we would expect. The difference between the two is in how many cars are presented on a default SRP. The default setting on Cars.com is 50. On AutoTrader.com it is 25. When folks say Cars.com's SRPs are inflated relative to AT, they are correct. It is not a 2:1 difference, because shoppers looking through the same amount of inventory on both sites cause the same number of SRPs to be developed on both sites. The difference is primarily created when shoppers only view 25 cars or fewer. If both sites had the same inventory and the same number of shoppers doing the same thing, then Cars.com would show more SRPs, AutoTrader.com would show a higher VDP/SRP conversion rate, and both would show the same number of VDPs. In studying a market where both inventory and shopper penetration is about the same, these were the very trends that were observed.

My testing was strictly relative to used vehicles. To do this same test, you need to be able to separate out the used VDPs and SRPs from the new on Cars.com. I continue to push Cars.com to provide this information in the same format AutoTrader.com does, and I encourage you to do the same. This answer is way too long, but I hope it provides the credibility you need to make confident decisions.