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The Cost of Free and Why Craigslist is Better Now

There are plenty of things offered to car dealers that fall under the category of “free”. Co-op money from the OEM is normally considered free. The donuts that the Cars.com representative brings every month are seen as free. Even the materials that the OEM and other suppliers send you to market your cars and services can be viewed as free.

The reality is that none of them are truly free. You’re paying for them, not directly, but through other moneys or efforts that you have to put into these companies in order for them to offer you the freebies. Would the Cars.com rep still bring Panera Bread every month if you stopped paying for their service? Of course not.

There’s another angle to the question of freebies that should be considered. How much are those freebies hurting you? Is it better to use the best PPC provider or to use the OEM-approved one? That depends. We’re not saying that you shouldn’t take advantage of the freebies. You simply need to be careful with how you position your advertising and marketing around the concept of free or paid-for rather than hopping on it every time it’s available.

We witnessed this first-hand when the “free” postings on Craigslist were replaced by paid listings. Many dealers stopped posting to Craigslist for this reason and the decision was often justifiable. However, there’s a side-effect to the removal of the free ads that has helped dealers achieve a dramatically higher return on investment. The “thinning of the herd” on Craigslist has added real value to the paid listings to the point that dealers who were finding some success on Craigslist before are finding much more of it now.

The rise of paid listings on Craigslist gives a much higher exposure level to their inventory than ever before. Direct leads, clicks to the website, and searches for the dealerships have all increased substantially. As a result, sales have gone up as well.

When Craigslist switched to a paid model, they turned a really good service into an incredible one. It’s a must-have for aggressive dealers who want to get their inventory in front of more buyers at a low cost.

Some would say that it’s too expensive at $5 per car, but if you really think about it, this is far from the case. Let’s take pay-per-click advertising on Google, for example. In many cases, dealers are paying $5 or more for a single click to the vehicle. With Craigslist, you have a much higher potential to get people to view your inventory at a lower cost.

Everyone loves to get something for free. There’s a sense of accomplishment in knowing that we’re spending less as a result of our decisions, but there is also a conventional wisdom that says you get what you pay for. With the current Craigslist model, you get more than what you pay for, especially when you compare it to other advertising venues. This is why Craigslist is better now than ever before.

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