Archive for November, 2013

Car Dealers Brought the End of the Free Advertising on Craigslist On Themselves!

Tuesday, November 26th, 2013

I have written many articles about Craigslist advertising and I knew it was only a matter of time before I would be writing this one. The day has come. Effective December 3, 2013 all vehicle postings made in the Dealer Only section of Craigslist will cost $5. This should come as no surprise, though. I have predicted this day, even longed for it at times. We have no one to blame but ourselves. So where do we go from here?

We have helped car dealers capitalize on Craigslist postings since 2008. This change will definitely affect our bottom line, but does this mean the end to car dealers posting cars on Craigslist? Not in the least. To explain, I first need to describe how it is we got here in the first place. Craigslist is not imposing this fee on car dealers only with the intent of raising revenue. Instead, their motivation is to slow down the constant, daily onslaught of postings from car dealers, coast to coast.

I am sure everyone has read the Terms of Use (TOU) posted at Craigslist.org but most car dealers have chosen to ignore them. Otherwise we would not all be guilty of some or all of the following:
• Posting our entire inventory rather than follow their Moderation section of the TOU.
• Posting the same vehicle in more than one city.
• Posting the same or similar cars more than once in 48 hours.
• Using any posting tool that posts each listing for you.
None of these offenses seem egregious in any way so why are they such terrible things to do? The founders of Craigslist frown on these actions because it goes against the grain of their website. They did not intend for their site to become the huge financial success it is today. Rather, they built this site as a means of serving the community. They actually frown on making money. The proof in this statement is realized when you look at how long they offered this service for free. They feel the key is moderation. If you have five sedans on the lot, post the nicest one, is the approach they want for their site. Think of it like the old fashioned newspaper advertising.

I have to say, though, Craigslist brought some of this on themselves, too. They have not changed many aspects of their site in years, including the search results potential car buyers experience when they surf the site. All listings have always been listed in categories from newest posting to oldest. Most users do not notice that they can change the order of search results to price, instead. Even if they did, you quickly learned when posting on Craigslist, your ads soon got buried in an avalanche of other, similar postings. How it is so successful and yet, so hard to search, still confuses me, but has been and will continue to be the one site where over 9 million used cars are viewed every month, according to www.statisticbrain.com/craigslist-statistics/ .

Car dealers who wanted to have the most exposure would delete postings two days or more old (if they abided by the site’s TOU) and re-posted them in an effort to keep their postings on top of the search results. Competition being what it is in this industry motivated some dealers to disregard the rules and post more often. At the end of 2013, we had several clients who paid at least one person a full time salary just to post hundreds of cars post cars every day, five and six days a week. Other dealers were paying companies to auto post their entire inventory list at least once a day. That is a long way from moderation.

Simply put, Craigslist does not care if you sell a single car. They are not improving the product any in order to justify this expense. They still will not allow most html mark up, no links to your site, and no noticeable protection from your paid listings getting flagged. They are only imposing this fee as a means of stopping the rampant over posting of cars. Dealers are not the only ones to blame. There are companies out there who sell leads and they would post “generic” listings in order to gather leads from people interested in a used car. They in turn would market that lead to one or more dealers in their area. Sometimes, you would see your own cars used by these companies to get the same lead you just paid for. I am a fan of Pay Per Lead when done right, but this sounds more like brokering, to me, something expressly forbidden by law in many states.

There are some myths to debunk. First, Craigslist says you can either pay for the postings one at a time as you post them or you can buy a bulk amount all at once and have them deducted from your account as you post cars. To buy a bank of postings you have to obtain a Paid Posting account. What they do not tell you is that in order to do that, you have to purchase $2,000 worth up front OR demonstrate that you have spent $2000 with Craiglist in the last 90 days. They also indicate in their FAQ (www.craigslist.org/about/ctd) that a “bulk posting interface” will be available. One would take this to mean that getting cars to Craigslist will be as easy as it is to get them to other paid online advertisers like Cars.com. Not true. In order to gain access to this posting interface you have to first sign up for a Paid Posting account (see above). Further more, you will still have to indicate when you want postings to be sent to them. If you send them every day, you will get charged for a new posting every day. You will have to manage not only when you add new listings or repost old ones, you will also have to manage your sold listings on your own.

Believe it or not, I feel these changes will improve the experience car buyers get at Craigslist, and in return will raise ROI for Craigslist advertisers. The fee stops others from posting your cars and attempting to sell you the leads. It also stops the dealers who are posting their entire inventory several times a day. Now your listings do not have to disappear from the first page results as soon as they are posted. I have always told my dealers that advertising in moderation is going to get them the same results as they would get if they bulk uploaded everything all the time. Now, I think more are going to hear me.