Page 14 Vol. 16 No. 5 Classified Intelligence Report
BY SHARON HILL
Since Craigslist began charging U.S. auto dealers $5 per listing, revenue has soared and the site delivers better results.
Craigslist will generate automotive revenue of $53.7 million this year in the cities canvassed by the AIM Group. That’s up one-third from 2014. We estimate another $20 million in additional markets.
Not all dealers stuck with Craigslist once they had to pay, but we’ve heard those who did are finding better responses, higher quality leads and a positive return on investment.
Matthew Brown, founder of the LotVantage classified listing application, talked with the AIM Group one month after fees began in November 2013. He predicted the charges would “legitimize Craigslist and clean up the mess of spammers, duplicate vehicles and traffic leachers.”
He was right.
“Fees definitely changed the [automotive] industry on Craigslist overnight,” Brown told us recently. “Many dealers initially reacted by sitting on the sidelines. That was great for those who didn’t, because the amount of inventory got annihilated. When listings were free, 15 to 20 minutes after posting, your ad became two to three pages deep because of spam and the placement of fake vehicles up to 25 times a day. A disreputable dealer’s inventory of 50 vehicles became a thousand listings. With the introduction of fees, those companies had a rude awakening and disappeared.”
Page 15 Vol. 16 No. 5 Classified Intelligence Report
Dennis Wagner, 26-year CEO of Denny’s Auto Sales in Lexington, Ky. and founder of training firm All Things Automotive Inc., agreed.
“When listings were free, ghost posters – fake listings – were everywhere,” Wagner told us. “They would bury your inventory. No one would ever see it. While there is still some of that, Craigslist finds it pretty quickly. And, while many dealers try to sneak their inventory in as private- party listings Craigslist discovers that, too. They regulate it pretty heavily now.”
Brown believes that most legitimate dealers are back advertising on Craigslist. That’s because Craigslist works for them, and LotVantage has proven that.
“We have metrics, and a phone number that tracks the number of leads for an ad,” he said. “We’re finding sales success at the rate of one good lead per ad, so they’re paying a low $5 for each Craigslist lead.”
Wagner said that many dealers have returned to Craigslist because it made economic sense. "Third-party leads cost about $20,” he said.
Wagner has actually increased his Craigslist advertising since the fees began. “My ROI is absolutely positive now,” he said. “The lead quality has gotten a little better as well.”
Brown cautioned that success depends on moderate vehicle value, with asking prices of $15,000 or less bringing the best results.
“I wouldn’t want to tell a new Ferrari dealer that Craigslist is the place to put his money,” he said. “But for the mass-manufacturer dealer with pre-owned inventory, Craigslist can be great.”
Wagner doesn’t rule out advertising an occasional high-end vehicle, especially if it’s a hard- to-find car or truck, or if the dealer offers sub-prime financing.
“If you offer financing you can sell a $50,000 car on Craigslist, though you will probably get twice the response by advertising a $6,000 vehicle,” he said.
Dennis Wagner of All Things Automotive said Craigslist's fees for U.S. auto dealers has eliminated most fake listings.
© 2015 Advanced Interactive Media Group LLC info@aimgroup.com +1-407-788-2780
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