CarGurus aims to give dealers more choices

BOSTON — Vehicle shoppers are doing a lot of research online.

Their first stop, however, often isn't a dealership website, according to new data from online vehicle listings site CarGurus. Even so, dealers want to maximize website traffic.

So CarGurus is planning to help dealers market their inventory to help drive more serious buyers to showrooms, said Tom Caputo, chief product officer for the Cambridge, Mass., company.

"You're seeing a reduction in the number of shoppers that are actually going to dealership websites, and yet the dealers increasingly see that as a very important tool for driving engagement and conversion," Caputo told Automotive News. "With that in mind, we're trying to create tools for dealers that allow them to broaden their exposure and to connect with eager in-market shoppers."

CarGurus will soon roll out a new suite of marketing products that it's calling "RPM," for "real-time performance marketing." It will include search-engine marketing, reengaging with website visitors, display advertising and Facebook marketing. The company also is pilot-testing another lender, Westlake Financial Services of Los Angeles, in a financing option it launched this spring.

Caputo, 45, spoke with Staff Reporter Lindsay VanHulle at CarGurus' first automotive conference. Here are edited excerpts.

Q: How will Facebook advertising work?

A: We have, through our own digital marketing efforts to drive traffic to CarGurus and through a lot of our dealer outreach, recognized the importance of social as a channel to connect with shoppers in-market for cars. We have created a capability that allows dealers to promote inventory-specific ads to our audience of targeted, engaged shoppers within Facebook, with the goal of driving traffic to the dealer's website. So if there was a shopper that came to cargurus.com, looked extensively for Ford F-150s, seemed to prefer the red ones and didn't ultimately make a purchase, a dealer might want to get in front of that shopper on Facebook with their Ford F-150s that that shopper had not previously seen.

Most of the ads that you'll see us running within RPM will be vehicle-specific, promoting a particular car. When the shopper clicks on that, it takes you to the dealer's website, and in many cases, the dealer's vehicle detail page.

Are product changes prompted by dealers?

We are constantly listening to dealers and trying to understand not only their pain points, but understanding what technology they're seeing on the horizon that is working for them that we can help to more broadly enable. And we have consistently heard from dealers that Facebook is becoming a channel that they are interested in and a channel that we particularly, given our audience, are well-positioned to be able to enable.

Why did you add a second lender to CarGurus' financing program?

We've always envisioned this would be a multi-lender program. One of our core tenets from a consumer perspective is trust and transparency, and we know consumers are increasingly looking for more information about financing, and this is an opportunity for us to provide them with more information about the financing options available to them and, ultimately, give them some choice on different lenders. So we're excited to bring our second partner onto the platform.

We believe the approach we're taking here is very complementary to the dealers' [finance and insurance] process, in that it allows them to utilize their typical process and all of the various different F&I partnerships that they may have in place.