Dealership Cost Cutting Requests Avoid the Real Waste in Automotive Marketing

I was inspired to write this article by marketing leaders who were discussing (in a group chat) about where their peers have found cost savings. The questions were prompted by an implied directive to cut operating costs at the dealer group.

In plain terms, the marketing manager was asking which line items in the marketing budget could be cut without having a negative impact on sales.

It should come as no surprise that many dealers first look to reduce marketing investments in marketplace websites (i.e., Autotrader, Cars Commerce, KBB, CarGurus, Edmunds). The irony of targeting marketplace websites is not lost on me after 20 years in the automotive industry.

Over my career, the most common thread of inquiry from dealers hiring me as a consultant could be defined by a formula which looks like this:

"If I start using (insert new marketing technology) in my dealership, which marketplace website can I cancel."

Does that sound familiar?

I'm writing today not to defend the cost structure of marketplace websites, because every dealer seems to be paying different amounts per month based on the historical layering of upgrade packages.

I am writing today to question why marketplace websites are first on the hot list when they may be one of the most transparent marketing investments dealers have in their budgets.

Marketplaces Are Not Like Your Spray and Pray Marketing Investments

Let's pick Cars.com as an example because Alex Vetter and I have had many conversations about the investments he has made to help dealers sell cars.

• Consumers come to Cars.com to look for vehicles and to read editorial content. Their investments in content and dealer reviews set them apart and provide great value to consumers.
• The consumers who come to Cars.com (audience) comprise one of the highest quality shopper audiences available. Their audience contains consumers in the top, middle, and lower sales funnel, and dealers can target consumers based on the vehicles they view.
• Consumers can navigate to the vehicles they want to research which gives clear signals on shopper intent and multiple visits refine the modeling of each consumer. These audiences can be used for retargeting and marketing offers.
• The consumers in Cars.com shopper audiences are not modeled audiences, they are shoppers who came to their website on a mission.
• Over 60% of the traffic to Cars.com is organic which means their traffic quality is higher than lead generation websites which use PPC to inflate traffic which might be directed to dealership websites.
• Compare that to audiences dealers buy on Google or Meta advertising platforms which may be defined as "in-market" shoppers. No dealer knows how these audiences are created yet they spend thousands of dollars a month hoping they work.
• Google and Meta also have audience thresholds which forces dealers to use modeled audiences to make sure there are enough consumers in the targeting list. These opaque audiences, sold to dealers, only have 20% of consumers who are actually shopping.

I could go on, but defending the role of marketplace websites is not the goal of this article. It is clear that marketplace platforms work to attract vehicle shoppers. Millions of consumers visit these marketplace websites every month.

Can dealers really question the quality of marketplace audiences when they:

• Will spend $5,000 in the middle of the month on a sketchy conquest email program that generates traffic that looks like bots and never fills out a lead form.
• Will double their Google Ads budget to get more leads and not check if their GA4 account is set up to send Google the correct conversion signals (key events)? When key events are not configured properly, the traffic quality sucks.
• Will try a direct mail campaign that promise a guaranteed ROI when they know their data in the DMS has poor quality, and they have no transparency on what was mailed.

If dealers can negotiate a good price, then marketplace websites could be one of their BEST marketing investments (basic ROI) because it is transparent in how they generate leads and audiences.

Avoiding The Real Pain: It Takes Courage to Fix Operations

If dealers really want to cut marketing waste and lower operating costs they have to look in the mirror and ask themselves some hard questions:

1. Why am I still using my DMS data for marketing when I know 40% of the data is incorrect?
2. Why am I focused on acquisition more than retention when acquisition costs are 5x-10x more than reselling an existing customer?
3. Why am I waiting on new leads each month when existing customers (and prospects) are back on my website shopping, and I can be alerted when they come back?
4. Why am I buying opaque targeting audiences when I can create high-quality audiences myself and purchase high-quality audiences with known origin?
5. Why am I using tools on my website which do not share engagement and conversion events in GA4, which harm my advertising bidding strategies and drive up marketing costs?
6. Why am I choosing to use tools on my website which convert engaged shoppers at a 20% Form Completion Rate (FCR)?
7. Why am I leaning hard on email to communicate with customers and prospects (leads) over SMS, which has a 20x higher contact and engagement rate?

I could keep going, but I can answer all these seven questions with a simple statement:

To eliminate marketing and operational waste, dealers have to roll up their sleeves, invest in new technologies, change sales processes, and move to real-time retailing. It is easier to point fingers than to invest in change.

Solutions Exist - But They Take A Commitment to Change

I'm not being overly critical, but I must state a hard truth. Many dealers don't have the will, perseverance, or vision to change the things that are the sources of big waste in automotive retailing. Others may have the will but don't have the knowledge to implement and guide sustainable change in the dealership using newer technology.

I'm not over-simplifying but the solutions exist. If dealers need help, it is OK to ask for help. Asking for help is not a sign of weakness.

Solving problems is harder then sending a cancellation notice.

The longer dealers wait to address the core problems of operational waste, the farther they will fall behind data-driven automotive retailers. I'm working with some amazing retailers who are waking up to the power of managing and activating their first-party data.

Here is what many dealers are exploring and verifying:

1. An investment in a true Customer Data Platform (CDP) will eliminate much of the marketing waste. The top CDP platforms will all be at DMSC which will make it an ideal place for dealers to find the right tech partners.
2. Effective CDP implementations can move dealers from reactive to proactive marketing. This can often DOUBLE the number of sales opportunities per month, beating competitors to the punch.
3. Changes to the tools on dealership websites can significantly improve marketing bidding and conversion rates which lower the cost per sale.
4. Partnerships with identity resolution companies (and hopefully marketplace websites) can significantly improve customer retention by generating data ups in the CRM.
5. Using third-party data partners can identify where your sales processes are broken (i.e., Urban Science ) or tell you when your customers are shopping, but not on your website (i.e., Client Command ).
6. Smarter bidding strategies, powered by AI and identity graphs, can move vehicles faster and increase turn rates (i.e., Lotlinx Sentinel).

20 Years And Counting

I love helping dealers find success in marketing and technology solutions which helps them achieve their business goals. I've not stopped writing, speaking, and leading in automotive marketing strategy.

As I look back over the past 20 years, I can safely say that dealers can finally fix many of the problems which have plagued marketing implementation, activation, and measurement.

Dealers who want to find solutions and make LASTING cuts to operational and marketing waste are encouraged to join their peers at the 2025 Digital Marketing Strategies Conference (DMSC), April 27-29th in Scottsdale, Arizona.

We have specific work groups included in the agenda to address website optimization and conversion as well as training marketing leaders on the latest strategies to connect cars with consumers. Nine of the Top Ten CDP platforms will be at the conference as well as many data hygiene and identity resolution partners.

If you are ready for change, meet me next month at DMSC.

If you want to subscribe to my free LinkedIn newsletter, click here. Let's learn together.