Tag Archives: South Korea

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.
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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.
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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.
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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.
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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.
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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.