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Hey everyone, a new survey from WrenchWay says auto technician morale is shrinking. Find out why in this week’s Market Pulse. — CDG
Third-party ad costs keep climbing. And dealers are operating accordingly.
With Q1 wrapping up, I spoke with two operators about how they're managing market spend right now. Their results echo what Jeff Ramsey, CMO of Ourisman Auto Group, shared on CDG's Daily Dealer Live last November — his group cut $2.8 million in advertising while posting a record October.
His framing stuck with me: "It's not just focusing on, ‘Well, this gives us the most leads.’ We're looking at what influences the most sales."
Neither operator I talked to plans to torch their third-party relationships. But both manage them like every dollar has to prove itself.
Here are three ways dealers are growing surgical with their marketing budgets.
Dealers are ditching vanity metrics and tying every ad dollar to a verified sale.
For a long time, clicks and site visits were the best metrics for tracking the value of market spend. Now, the dealers managing this best connect that spend directly to verified sales, since the consumer car-buying journey has gotten harder to track.
The reasoning: The searches have become more fragmented across more channels, and they increasingly happen in places such as ChatGPT, where traditional tools can't see.
"Consumers have access to more information in more places, faster than ever before," Carl Matter, Director of AdTech Performance at Urban Science, told CDG. "This means that instead of media agencies defining these journeys, consumers are defining them for themselves."
Carl Matter
The takeaway: The more marketing that gets tied to verified sales, rather than clicks and form fills, the easier it becomes to cut waste and defend the spend that actually moves inventory.
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Bolt-ons can hide the fat, so some groups are cutting deep.
Dennis Gingrich, sales and finance director at The Niello Co. (a 104-year-old, 10-rooftop group in California), spent Q4 auditing every third-party package across the group.
His target: The bolt-ons. Retargeting tools, premium placements, and ancillary products layered on top of base packages.
"We cut just shy of $100 grand a month, so $10 grand a month across the 10 rooftops on average, really, from our third-party spends," Gingrich said.
Dennis Gingrich
At several stores, they turned off retargeting entirely. The traffic that disappeared had a high bounce rate and was flowing back to the third-party's site, not Niello's.
"If they're driving them back to any other site other than our own, there's a good chance that they might see one of my competitors' shiny objects," Gingrich said. "I just want to increase the chance that they see my shiny objects, and not somebody else's."
From there: The group leaned into CRM tools they'd underused since a platform migration, built organic social engagement at some stores, and stuck to base packages across the board.
"We didn't supersize our extra value meal," Gingrich said.
February was the first month they ran lean across the whole group. And the results held.
But Gingrich is clear that savings must be backed up at the store level. Lead response time, phone handling, personalized video—all of it has to stay sharp, or the savings don’t add up.
In his words: "If we do everything right from the sales department side, we're actually going to get a return on that marketing investment," Gingrich said. "So if I can shrink my spend and over-perform on the people part, I'm going to be way more effective as a dealer."
Effective operators are turning co-op funds into a near-zero net ad spend.
Ryan Downing, CEO of Ross Downing Auto Group, a family-owned Louisiana group that sold roughly 9,600 units and earned ~$500M in revenue last year, has built his market spend strategy around one lever many dealers underuse: co-op funds.
What we mean: When manufacturers invoice vehicles, a portion flows into a reimbursement pool tied to approved vendors and approved ad spend. Use the right vendors, submit the invoices, and net ad spend can drop to near zero some months.
"About 75-80% of our advertising is reimbursed through our co-op funds from the manufacturer across our group," Downing said.
Ryan Downing
The catch: Co-op-approved vendors tend to be the larger players. They often offer seamless reimbursement, but not always the same quality or attention as a smaller, specialized agency. And the funds expire, which creates real pressure to spend them.
"I don't want to forfeit the money that we could get reimbursed, and the OEMs stay on us to make sure we spend it," Downing said.
Downing treats reimbursement as a discipline, not a blank check.
"It doesn't mean you can spend carelessly on third-party sites," Downing said. "If they start charging double and you still have the same amount of co-op funds, you have to start looking at the value each company provides by looking at the traffic and conversions."
That’s why: He dials inventory up and down based on what's converting—listing 80 cars on a platform instead of 120 when results don't justify the full feed, and scaling back up when they do. He also tracks sales by source monthly and quarterly, and moves fast when something stops performing.
"When one side is not performing, or one third-party is not performing, we're usually fairly quick to make adjustments when we see that," Downing said.
The signal: Co-op funds are free money with an expiration date. The dealers getting the most out of them are spending strategically enough to justify every reimbursed dollar.
Bottom line: These dealers aren’t exactly staging a revolt. Third-party listing sites still help sell cars, and operators who've tried leaving entirely often come back.
But the era of passive spend has ended.
And that’s why, instead of asking whether third-parties are worth it, the dealers managing this best are asking this instead:
Which parts are worth our ad spend, at what price, and what happens if I turn this off?
