Auto dealers are the heart and soul of the U.S. automotive industry, and Cars.com is transforming to help dealers thrive amidst constant change. That point was one of the themes of our second quarter earnings announcement, as articulated by our CEO Alex Vetter in our Q2 earnings conference call:
“While many digital technology companies are out to disrupt traditional retail, we are proud to help the local retail system win. Local dealers are the heart of the U.S. auto industry. While we are not a digital dealership, we are helping dealers ‘do digital.’”
– Alex Vetter, Q2 2017 Cars.com earnings conference
Over the next five years, the 30 billion dollar U.S. auto advertising industry is expected to grow at a five percent compound annual growth rate, but with that growth comes challenges. Consumers are trying to make informed buying decisions in a crowded marketplace — each year more than 30 manufacturers launch more than a thousand make, model, and trim combinations. At a time of overwhelming choice, consumers want an unbiased and informative third-party marketplace, such as Cars.com, empowering their decisions along the way.
Connections That Fuel Growth
With consumers now visiting slightly less than 2 dealership lots before making a purchase, “being digital” today for dealers means being visible, relevant, and engaging to create meaningful connections across the entire customer journey – before, on, and after the lot.
Audience: Cars.com is number one in brand awareness across third party sites and is viewed as synonymous with car shopping. Seventy-eight percent of our audience plans to purchase a vehicle in the next six months,1 and 70% percent of them are undecided on what or where to buy1 – just the kind of audience that dealers want to connect with. And, we continue to lead with mobile – mobile represented 58% of our traffic in Q2, and mobile traffic grew 9% compared to the same period last year.2
The “4 Ps” of Auto Marketing: Cars.com is the only marketplace that provides consumers all of the information they need to make automotive decisions across product, price, place and person (via DealerRater reviews). Our trusted, unbiased editorial experts, combined with more than five million user reviews, creates a powerful environment to help consumers make better decisions. This allows our customers to display their inventory to consumers in the moments that matter, build trust with the consumer through pricing transparency, differentiate their brand and dealership, and connect consumers to individual salespeople.
Lot Insights: In June, we achieved a milestone for the business in being awarded a patent for our Lot Insights technology. This technology identifies mobile consumers on or near dealership lots and provides valuable insights, allowing for more precise, accurate, location-based consumer data for our Cars.com dealer and OEM partners. Dealers tell us that walk-ins have the highest closing rate of all forms of traffic.3 Using Lot Insights technology, we can provide our partners with mobile consumer shopping behavior to help them understand and sell to more of this qualified traffic.
Growth Partner Mindset
Since 1998, we have been building a business to help you win. Our mission is – and has always been — to be more than a lead provider. Our mission is to be your partner in growth. As a result, we continue to invest in our people and partnership.
Cars.com is the only third party provider that has consistently invested in local reps to help build your business at the local level. This team of media consultants – more than 500 strong – is one of our greatest assets as well as our connection to you and your business. We were the first third party to allow dealers to rate their media consultants and we remain committed to continuous improvement on the services we provide based on your feedback.
As Alex noted during the earnings call, “we also plan to invest in new marketing initiatives to further support our partners during a difficult environment.” These investments include collaborating with independent marketing measurement companies to help dealers better understand the full impact of their digital advertising as well as the influence Cars.com has on their sales.
We’re entering a new quarter from a position of strength. We’re delivering valuable customers to the best retailers in the world – our network of auto dealers. I am excited for what the future holds – for dealers, our customers, our investors, and our people. As a public, independent company, we have established an experienced leadership team and best-in-class talent, which provide a strong foundation that will enable us to become an even stronger growth partner and industry leader going forward.
Thank you, our dealer community – the heart and soul of the industry – for your continued inspiration and your partnership.
1Cars.com Consumer Metrics Study, June 2017
2Cars.com Internal data, August 2017
3Cars.com, Dealer Lead Quality Survey Results, June 2017