Autotrader Producing Smaller Returns, Raising Rates

Once a year there is a post that comes up on Dealer Refresh about Autotrader.com raising rates again, and it always causes a lot of dealer discontent to surface. I’ve made it clear in the past that I’m not a dealer, and I also worked for Autotrader.com for about two years. There are always people who think dealers should stop complaining about the constant rate hikes, but I am not one of them. Some dealers say the ROI from Autotrader.com is flat at best. Nothing speaks louder than facts and figures, so I decided to take a look at three random dealerships and compare a five-month period from last year to the same five-month period this year, and the proof, as they say, is in the pudding.

The three dealerships chosen at random are in different areas of Virginia between Virginia Beach and the Washington, DC area. Since each has a different number of vehicles on the lot and use different packages with Autotrader.com, I’ve tried to break everything down to a common denominator: leads per vehicle per month. Here’s what I found for these dealerships:

		June through October
		2006	2007	Change
Total Emails:		428	291	(137)
Total Calls:		1634	1292	(342)
Credit Apps:		151	67	(84)
Total Leads:		2213	1650	(563)
Total Vehicles:		1111	849	(262)
Leads/Car/Mo:		1.99	1.94	(0.05)

Big difference? Not really, but over the course of the 5 months examined it does add up. For a dealer with 50 vehicles on the lot each month this translates into 12 less leads over the same period last year. A dealer with 100 vehicles on the lot would see 25 fewer leads over that period. Like I said, not huge numbers, but fewer nonetheless. The important thing to consider is that with fewer leads from the previous year, how is a rate increase justified by Autotrader.com? I submit to you that it is NOT justified, but as the 800-pound gorilla they’re doing what they want until the 900-pound gorilla shows up. Is the 900-pounder a Googlerilla? A Cars.comorilla? Time will tell, but it will happen.