Chris Green, sales and media director, Motoring.co.uk
"The market for used car advertising both offline and online is estimated to be worth around 300 million annually.
Advertising can cost dealers around £10 per car per week with the likes of Auto Trader.
What’s more Google adwords such as ' used cars ', which several years ago cost around 20p per click, are now in the £s per click. It is undoubtedly an expensive business.
In 2014, there are several used car portals set to invest millions of pounds in TV and Google which is great news for Google, but could be bad news for dealers. PPC costs could soar again, due to everyone bidding for the same used car adwords.
It’s fair to say that dealers have been crying out for an alternative to Auto Trader for years and no brand has become a major contender yet.
So, a big focus for dealers and rightly so is the investment in their own websites and digital infrastructure, to generate their own traffic, at hopefully better value for money.
However, moving from Google to Auto Trader hasn't necessarily saved dealers money, but it has allowed them to control their traffic streams to their websites.
In the past, rival classified websites like Motors.co.uk (now owned by Manheim) have found it difficult to rival Auto Trader with the same classified offering and have lost millions of pounds. Many websites have come and gone and even big brands like Tesco and Virgin couldn't achieve success in this space.
So what about new entrants, acquisitions and partnerships in the used car space? What does 2014 look like for dealers and is it good or bad for them? More importantly, do these new entrants have a new offering for dealers and different products and services for consumers, to make them loyal in the long term?
Deals that have taken place in the market of late are Manheim’s acquisition of Motors.co.uk, after it blew millions of pounds when owned by The Daily Mail Group; RAC’s acquisition of Netcars now RAC Cars; AA’s partnership with V-Cars now AA Cars (similar to Tesco partnership with carsite ); and of late a sneaky new entrant albeit in ' beta ' is We Love Any Car ( owned by Noel McKee founder of We Buy Any Car ).
I can assure you that Noel’s remit along with John Bailey of Manheim, will be to topple Autotrader.
The key question is, are there any real alternatives and will they have an effect on choice for the consumer and add better value for dealers in the long term?
There is no simple answer, that is for sure and it's not just about throwing money at TV and Google.
The classified model is here to stay and used car sites will continue to come and go.
That includes some of the big brands I mentioned earlier, as their models are ' me too ' and will not be sustainable without a strong point of difference, value, product and most importantly, without generating sales for dealers.
Auto Trader will continue to be the dominant force in the classified arena and Google will continue to enjoy its bid system and revenues, due to all of the above simply piling in to buy the same adwords.
So what should dealers do?
Well, they should continue to invest in their own websites and digital infrastructure, but choose advertising partners carefully, by using the ones that can prove they make a difference and add value.
Monitoring adword campaigns with Google should be a number one priority for dealers and they need to ensure their traffic converts.
If it does not, then they should drop that adword or tail and try new ones, especially the medium to long tail stuff.
Harnessing and utilising local consumer data has to be a strategy employed by small dealer groups, moving forward.
In the long term it will bring marketing costs down, as well as enable dealers to engage with consumers with products like service plans, resulting in that much needed retention.
One light on the horizon for the medium to larger dealer groups could be the emerging power and success of high quality, real-time consumer data and harnessing it with a community approach, whilst focusing on building thousands of new car owner records.
Engaging this community with rich rewarding content through the whole car owning life cycle means dealers can promote different products and services around new and used cars, including aftersales to create the retention and loyalty needed for dealers, in such challenging times.
Historically, consumer data has not been fresh and accurate and has been limited in what it can offer.
But with the advent of the digital world and data capture, deep information on consumer buying patterns and behaviour is now available.
Today, it is much easier to reward consumers with the right information, at the right time and keep consumers loyal to you and your business in the long term."
> Motoring.co.uk is currently working with top 20 motor manufacturers and dealer groups on data capture, new and used car lead generation, aftersales strategy and email marketing campaigns along with helping them fill up and update their own CRM.