Tag Archives: Encar

3 real time carsales metrics

I’ve spent the best part of the past 18 years leveraging the power of data in the online classifieds space.

When you have millions of consumers searching and finding their next car on a country’s number 1 automotive portal like carsales, Encar, Chileautos or Webmotors, data can invariably tell thousands of stories.

Here’s a few powerful “real time” metrics that only a carsales is able to provide with any credibility in their respective country’s car retail market:

Supply and demand
The Days Supply metric is one of my favourites, as it provides real value and something more accurately in the used car market that I don’t think can be replicated. It shows whether supply outstrips demand and vice versa. The beauty of Days Supply is that it can be measured for makes, models, versions, etc and for different geographical regions.

So if you were say a Melbourne metropolitan new car Dealer and a buyer has a 2015 Mitsubishi ASX as a trade in, a vehicle your used car team knows little about. Wouldn’t it be great to know that this model is the most sought after vehicle in Melbourne from a supply and demand perspective for vehicles that are less than 8 years old, have less than 60,000 kms and an average asking price of over $20,000?

What this means is that in the past 60 days 116 were sold but there are only 29 for sale which gives a Days Supply metric of 15 meaning that supply of this model for sale will run out in 15 days. Supply and demand says this is a car you should stock (all things being equal with the acquisition price).

Using the carsales LiveMarket Stocking feature, here’s the hottest used vehicles in Melbourne at 27 July 2017 (using the parameters above).

This list can be a pretty handy shopping list and reference point for any used car dealer.

Whilst Days Supply has been in available in Australian Dealers for some time, it hasn’t been used extensively from a buying perspective whilst some of the most profitable used car operations in the US use this metric to make great buying decisions.

Competitive sets
What better way of knowing what the competitive set is of a model of a car than comparing the models a consumer is searching, viewing and enquiring on?

We see millions consumers searching and finding their next car. Most consumers do not what they are going to buy next when they start their car finding journey on carsales. We see them search, view cars, narrow the search, view more cars, save cars in their Membership and finally enquire on cars, usually more than one.

By analysing this activity, we can categorically provide the true competitive set of each model of car and more often than not, the true competitive set is a little (or a lot) different to what the OEM thought was the competitive set for most cars.

The beauty of these data sets is that is always being updated and available virtually real time meaning that fluctuations in any competitive sets is quickly seen, providing enormous value to any “always on” marketing campaign.

Brand loyalty
When a consumer puts an enquiry through on carsales, many include their trade-in details with the enquiry. This information gives us a real-time view on brand loyalty, before the car has been purchased! Post enquiry surveys can then provide another level and view on brand loyalty too.

Comparing the make of a car being enquired to the make of the trade-in vehicle nominated immediately gives us a picture of brand loyalty. If I am enquiring on a Toyota Landcruiser and in the enquiry I include my Land Rover Discovery 4 as a trade-in, I think there’s a pretty good chance that I am thinking of swapping my Disco for a Cruiser wouldn’t you think?

When I am surveyed about my experience on carsales and if I bought the car I enquired on, this then provides rock solid evidence towards the brand loyalty indicator.

Using this data, brand loyalty can be measured daily and is accurate as opposed to waiting for registration details or OEM surveys.

The take out
These metrics are just three of a plethora of such metrics that carsales, Encar, Chileautos and Webmotors has available to benefit OEMs and Dealers, whether it be for effective advertising, pricing, appraising or buying cars.

Who has the No 1 Auto Classified Website in the World?

What if I said to you that the number 1 online automotive vertical website in the world in October 2016 was Autoscout24.ch in Switzerland?

I can, for the first time, compare sites from different countries on the same measures…..based on my traffic health algorithm on 72 websites in 38 different countries

It is not unusual for us to visit a new country and have 3 players swear they are number 1 in online auto classifieds.

One points to traffic, another to inventory and another to dealers (who needs revenue and profit anyway?).

At the end of the day……making money has to be the overriding measurement

Everyone wants to be number 1 and it seems this is especially so in the online world where to claim yourself as the number 1 player in your niche is vital for advertisers, investors, etc.
This is hard enough to decipher within each country so how do we determine what automotive vertical website is the number 1 site globally?

From an online automotive vertical aspect, I see businesses claim number 1 in their country/region based on anything they can measure has them in front – visits, unique visitors, inventory count, dealer count – and the numbers can be near on impossible to test from outside the business.

You can’t do it by visits, inventory or dealers because a website operates in a country that has a large population with a huge car market will naturally have more visits, inventory and dealers – this does not make them the number 1 in the world.

I’ve wrestled with this for some time as carsales looks to strategically partner with more online automotive businesses around the world and I look at peers, competitors and targets so I’ve come up with a measure that for the first time doesn’t care how many visits, inventory or dealers are on the site.
So getting back to who is number 1, how’d I come to this conclusion and what exactly is Autoscout24.ch number 1 in?

What I’ve done is created an index using a weighted algorithm for each automotive website around the world based on things that measure the health and stability of their traffic, namely user engagement and traffic sources. For me these metrics can tell you a lot about the online business and for the first time, I can measure websites from country to country on like for like data in order to get a picture of their real position in the market.

Like everything in online, one form of measurement doesn’t tell you the whole story but this index allows me to rank every website around the world to get an accurate picture of their traffic health irrespective of their traffic volume (although to get an “official” index a website must have over 100,000 publicly measurable monthly visits; this number is arbitrary).
This means I can, for the first time, compare sites from different countries on the same measures. Traffic health should be pretty basic and each component would have individual focus within each business. Product teams would be all over user engagement metrics; SEO experts would be working to ensure the long tail of each website is indexable; and SEM spend would be closely monitored to ensure the right spend is getting the right results.

It’s pretty easy to correlate a high SEM spend, low direct traffic and a high bounce rate and what it means – poor traffic health – but as with most metrics to measure a number 1, they usually only tell part of the story.

In any case, based on my traffic health algorithm on 72 websites in 38 different countries, the top automotive vertical website in October 2016 was Autoscout24.ch (Switzerland) and businesses that are part of the carsales network including Encar.com (South Korea), Joinvillecarros.com.br (Brazil) and Chileautos.cl (Chile) are in the top 5 (the website rounding out the top 5 was Gebrauchtwagen.de in Germany).

Each of these websites has very strong user engagement metrics and extremely healthy, sustainable traffic sources.
It’s interesting that some countries and in fact continents have common traits in user engagement and/or traffic sources that flow through the websites.

The regional Brazilian website indexes do not surprise me given the regional focus in Brazil where dealers and consumers alike are somewhat parochial to regional automotive websites resulting in high user engagement and positive traffic sources which sees websites that are now part of the Webmotors network high up in this indexing including Blucarros.com.br, Joinvillecarros.com.br, Compreauto.com.br and Meucarango.com.br.
Anyway, my indexing algorithm gives me a great picture of where our peers, competitors, targets and carsales network sites are at around the world irrespective of the traffic they claim, inventory or dealer count.

At the end of the day, all of these websites are businesses and we all know that, as my esteemed former colleague used to remind me, “you can’t bank wank” – in other words, making money has to be the overriding measurement.

No Online Third Party Marketplaces

Online third party marketplaces like carsales, Webmotors, Soloautos, Chileautos and Encar play an important role in connecting car buyers and sellers.

For car buyers they provide choice and information in the one place when looking for their next car.

For car sellers they enable their inventory to be put in front of millions of buyers and compete on equal footing to other sellers no matter the size.

Now, let’s imagine an online world with no online automotive third party marketplaces. How would sellers get their cars seen by buyers and how would buyers find the right car for them?

Dealers would have to rely on their own website to advertise their cars to sell. Yes the vast majority have their own website today but it is a totally different cost and investment conversation if they had to rely on their own website to attract buyers.
The massive investments and efforts third party marketplaces make to get the right car for the right buyer would be the domain of the dealer. Just like the old days when a dealer had to get a spot with good through traffic on a main road, smaller dealers would be up against it again.

The search engine giant(s) and those who have created business around it (i.e. SEM, SEO “experts”) would love it if dealers had to rely on how their website ranked in search, organically or paid.

Car buyers are buying new cars whether they be new or used – have you ever heard someone show you their “new used car”, they always buy a new car it’s just some are used – and third party marketplaces are the only place where new and used are presented equally.

This is an important part of today’s online world that I think is overlooked by most. Buyers come to third party marketplaces to narrow their car search so by mixing new and used together the buyer’s comparison set is broadened, bringing in cars they probably didn’t know yet could afford and/or were available.
Advertising in print still wouldn’t be viable so investing in the dealer website at a level far exceeding today would have to be the way forward.

I’m not even sure what private sellers would do. I guess they’d have to advertise in the newspapers per pre-Internet and rely on the publisher to list everything online that they have offline, a throw back to the News Limited and Fairfax 1990’s business plans. Maybe the publications like the Trading Post would still have currency?

Facebook Marketplace isn’t even the answer. How many of you want to sell your car to a “friend” really?

Online third party automotive marketplaces are a natural fit in the same way a Google is for search in navigating in today’s connected world.

Premium Verticals Up Against The Freemiums

carsales.com runs a Premium marketplace in the online automotive vertical space.

As carsales takes investment positions in more global online auto businesses (auto vertical), we are more and more competing against some very large Freemium businesses like OLX and Mercado Libre across Latin America, with each of them being general classifieds sites (horizontals).

Horizontal’s have a role to play in getting rid of your old household items. A car is not one of these

Webmotors.com.br, Soloautos.mx, Chileautos.cl and Encar.com are all online Premium players in automotive competing against the horizontal Freemium players.
This is certainly not new to carsales as our largest competitor in Australia is also a horizontal. That’s not to say we don’t have serious competition from other Online auto vertical players in Australia; we’ve always faced this.

“The easiest way to get one million people paying is to get one billion people using.”

A Freemium website makes their money by charging for value added services once you have listed your item. I love Phil Libin’s (Evernote) quote “The easiest way to get one million people paying is to get one billion people using.” This is certainly what Freemiums focus on.

The Freemium general classified players of the world are following this by having a platform to advertise a car in the same way as your 8 year old couch; and it shouldn’t cut it for a car buyer or seller.

Remember this – a car is (almost) everyone’s second largest purchase in their life therefore deep information, CarFacts reports, inspection reports, reviews and above all else, trust and safety are all major factors and things only a Premium vertical online website is in a position to offer.
The role we play in each of our global markets is as the Premium and Premier online auto vertical player; this means we need to do cars better than anyone. From searching, finding, researching and buying to selling with everything you need to make a quick, safe and profitable sale.

Our goal is to help you sell as opposed to helping you advertise; this is a BIG difference. This goal is different to Freemium horizontal player who is more interested in getting towards the “billion people using” rather than making the experience of each and every user one that represents the investment each is making.

Horizontal’s have a role to play in getting rid of your old household items. A car is not one of these from a selling or buying perspective.
This is why we will continue to invest in our platform to provide the best information and tools to transact on the second largest single item in most people’s life’s in the safest way possible.

I think there’s a business there.

Pay to Advertise OR Pay to Sell Online?

Will consumers pay to Advertise their car online? It’s an interesting question.

Advertising versus selling are two different things. A typical online advertising model goes like this – pay me $50 to advertise your car for 30 days, if it doesn’t sell then pay me another $50 to advertise it for another 30 days. It is in the advertisers interest for you NOT to sell the car as they will make more money when you advertise again the next month and the next…..

Now let’s change the question slightly –

Will consumers pay to Sell their car online? Now you are talking; the answer has to be yes.

A typical online selling model goes like this – pay me $65 to sell your car regardless of how long it takes. It is in the online businesses interests for you to sell the car as quickly as possible as this then creates a good experience and word of mouth so they provide tools and tips (paid and unpaid) to get the car sold.
Encar.com, our leading auto website in South Korea, wasn’t charging private sellers to advertise their cars online when we came into the business.

Our new business partners didn’t think South Korean consumers would pay to advertise their cars. They were probably right but would they pay to sell their car? This is a question they did not know the answer too.

We were confident that as the clear number 1 auto website in South Korea providing enormous value to car buyers and sellers, consumers would (and should) pay Encar to sell their car online.
So the carsales team worked with the Encar team on structuring a private seller platform that would help the South Korean consumer sell their car quickly and easily for a reasonable price.

To say our business partners were nervous was an understatement. They were certain the number of private seller cars would drop right off a cliff.

In April last year we made the switch to be a paid model for private seller cars and in the first month saw a small drop off in private seller cars and was already a much better result than our partners envisaged.

Each month the “drop off dropped off” and in just 6 months we were back to the same level of private seller cars added each month in a paid model to that of a free model.
There are a lot of factors that went into the decision making process and planning for a change like this to go as well as it did. A lot of things need to be put in place to make it a success, none the least was the mindset of the Encar management.

Don’t get me wrong, the fact that Encar is the leading auto website in the country meant that we were extremely confident that our model of “pay once till sold” would work – that is, don’t pay to advertise, pay to sell.

I’ve seen lots of websites fail to make the change from “free to paid” as there is a lot to consider, none the least is the mindset that is your website geared around advertising or selling?

List Online To Sell, Not Advertise

carsales.com acquired a 49.9% stake in Encar.com from the SK Group in 2014 with the aim of using its number 1 market position to accelerate the growth of the business.

Encar is a clear leader in the online automotive space in South Korea by inventory and traffic with one massive difference from carsales – it had no lead attribution for its paying Dealers.

A Dealer would list their inventory on Encar with the Vehicle Detail page showing all the Dealer’s details (address, phone number, etc) and no email lead form. The phone number was the Dealer’s so there was no tracking or recording of the calls. Therefore Encar had no way of knowing how many people were making contact with a Dealer meaning there was absolutely no lead attribution to Encar from the Dealer. This makes it hard to charge for the true value the website is delivering.
This of course flies in the face of the carsales’ business model which, being a lead based model, relies on lead attribution to carsales from the Dealer.

Even if we were never going to introduce a lead model into the Encar business, lead attribution has to be an important facet to ensuring Encar can show the Dealer real value by way of selling cars.

So planning was put in place to insert a lead form into the Vehicle Detail page and setup Call Connect which would see Encar supply the Dealer’s with a phone number where the call details can be tracked, recorded and stored in a database.
I think it was fair to say that the Koreans weren’t sure if Korean consumers would insert their details into a lead form or if Dealers would accept a phone number from Encar that would record the phone call.

We made the website enhancements towards mid 2015 and the first month saw tens of thousands email leads and phone calls logged as Encar leads. In the 12 months after the number of leads multiplied by a factor of 4-5 and still rising.

The next phase is to introduce the Dealer’s to Lead Management to ensure every lead is treated as a car buying prospect and for the Dealer to sell cars from Encar.com.

Introducing a lead model does not necessarily have to be the panacea to driving growth but the steps required to be in a position to be able to switch to a lead model are vital in ensuring a strong, viable online auto vertical leader.