JD Power Auto Roundtable: Digital Auto Ecosystem Shifts

With the majority of U.S. auto buyers now using online and mobile in their research, the auto sites are clarifying their individual roles in the auto ecosystem – and making adjustments where necessary.

This week, a panel of car site leaders at the JD Power Auto Roundtable in Las Vegas – including Cars.com, Edmunds.com, Kelley Blue Book and TrueCar.com — suggested there were two extremes among them. On one side, you have the national verticals that are the successors to the classifieds industry and provide rich information about cars and the buying journey, lead by AutoTrader.com and Cars.com. On the other side, you have sites focused more on providing price estimates for autos, such as Edmunds, Kelley Blue Book and TrueCar.com.

Finding a balance between pricing and dealer engagement has been the industry’s challenge.

“Price, while important, is not the sole principal,” said Cars.com SVP Alex Vetter. Most people want to know who to buy from and the quality of the service department. Taking care of customers post sale means a lot to them and they will pay more than the lowest price.

Indeed, a focus on price is seen as a “race to the bottom.” “As marketers, we are touting unique value propositions, product quality and things we want to promote.” Vetter notes that Cars.com’s deep editorial content, and growing mobile channel, provides context and relevance for the site’s network of 20,000 dealers.

Edmunds.com President and COO Seth Berkowitz , however, suggested that the presentation of price really is important – so long as it is provided in a rich context. By providing price points that have been paid by other customers, along with price quotes by the dealers, better trust is fostered with consumers. When dealers make promises and keep them, we’ve seen a 10% bump in satisfaction ratings, said Berkowitz – an important boost, as dealer profits are often made less from sales as loyalty efforts such as car trade ins and service.

Berkowitz said that the site now works with 6,000 dealers and is becoming more dealer-centric, rather than relying so much on advertising from the manufacturers. The site’s revenue split is currently 60 percent advertising, 40 percent dealers. By next year, it should be 50/50.

 

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