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The FTC May Have Just Killed Twitter Marketing For Dealers

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Yeah, in the most absurd move ever, the FTC has determined that Twitter is not excluded from regulatory laws requiring full disclosure on products or services. The Wall Street Journal reports that any disclosures that would apply to any other advertising also apply to Twitter.

Hmm. Let’s think about that a moment. On a platform that allows only 140 character submissions, how, exactly, do you tell your followers about a great lease special, factory incentive or other promotion AND include the tiny, almost unreadable, 2 paragraph disclosure in 6 point font at the bottom of the ad? Well, you don’t.

So, what does that prohibit by default? Pretty much anything you want to promote that requires a disclosure and, for most car dealers, that’s just about everything. Heck, most factory incentives have disclosures. Contests, giveaways, or any other promotion (social media or otherwise) as well as coupons, service specials, and other customer offerings would also be excluded.

The easiest way to determine whether you can or can’t tweet something about any special, ad car, incentive, lease special, promotion, coupon, service special, parts special etc. is by following one basic rule:

If it needs a disclosure, you can’t tweet about it.

See, that was simple wasn’t it?

Now, all of the above being said, Facebook’s Terms of Service in regards to contests, promotions and such are violated, trampled over and ignored all of the time by both vendors (who know better) and by dealers (who may or may not).

That being said, Facebook can’t investigate your dealership and fine you for non-compliance with advertising regulations either.

So, has the FTC effectively killed Twitter marketing for businesses?

It depends on what you’re tweeting about.

If your tweets are informative, quality content or customer service and engagement focused then no. If your strategy is to blast your inventory and specials to Twitter on some sort of robotic RSS feed that forces everyone to not listen to you anyways, then yes.

You make the call. It’s your business but the U.S. Government has spoken.

Update 3.14.13

I spoke with Compliance expert Jim Radogna about this issue. He researched the actual FTC ruling & found the relevant passages and, in his opinion, you can still tweet specials, etc. as long as there is a clear link to the disclaimers included in the tweet. While the Wall Street Journal article seemed pretty straightforward, it’s in his opinion that they’re incorrect in their translation of the ruling and how it applies to tweets.

Business Insider reports that the FTC released more information outlining a way that businesses can continue to use Twitter to market without actually needing the disclaimer physically present within the tweet. Just use “Ad:” within the tweet

Tip: Selling Cars using eBay Motors Local Market

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In my experience, I’ve heard many dealers complain about eBay Motor’s Local Market service for dealers. For those who don’t know what it is, it’s NOT a typical auction-style listing service. It will post your entire inventory on eBay and offer shoppers two choices on your vehicle page on eBay – “Make an Offer” or “Contact Seller”.

One of the coolest things is that, different from a normal eBay message from an interested buyer, you actually get full contact info for the consumer as they have to be logged into eBay to complete the action and eBay passes along this information to you straight into your CRM. So if someone contacts you and asks you a question, you have the ability to follow up with them just like any other lead.

One of the biggest complaints I hear from dealers are that they continuously get ridiculous offers for vehicles – like an offer of $1,000 for a $10,000 vehicle – and they don’t want to waste their time. They believe there is little value in having their inventory on eBay because their perception is that all they get are stupid offers and little else.

What I ask dealers when they make this complaint is “If you had someone in your showroom making you an offer of $1,000 on a $10,000 car, what would you do? Would you tell them to hit the pavement?” The typical answer is “I’d sit down with them and work the deal starting off with explaining why that offer is not realistic.”

Keep in mind that, despite their unrealistic offer, these are people, first and foremost, shopping for cars. On top of that, out of the millions of cars listed on eBay, they happened to land on yours. Not only did they land on your vehicle, they took the time to contact you and/or make an offer on that vehicle – realistic or not.

Anyone offering you any amount of money for a vehicle is, in reality, starting negotiations. I’m sure you get unrealistic offers all the time from showroom customers in the box with your salesperson. You ask your salespeople to get a commitment when filling out the initial foursquare and, sometimes, those offers are unrealistic. These leads aren’t any different except for the fact that they aren’t in your showroom.

If you get an unrealistic offer on eBay, instead of looking at it like a waste of your time, realize that, chances are, this person is farther down the funnel than most of your internet leads. They may be higher maintenance and require more work than your typical internet lead but by making the effort instead of just declining their offer and dismissing them as a “jack”, you’ll find that you’ll be able to convert some of those ridiculous offers into sales.

In Defense of TrueCar

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There’s been a lot of talk about TrueCar lately in automotive industry forums blasting them for their business practices and how “evil” they are. There’s a thread on DealerElite with over 33 PAGES of comments [edit: 50+ pages] in response to Jim Ziegler’s question:

“TRUE CAR and ZAG Cyber Bandits: Parasites or Good for the Car Business?”

..and even a video from Jerry Thibeau of Phone Ninjas who has a very strong opinion:

(Edit: I guess TrueCar didn’t like the video. It appears that they had it removed.)

My experience with HomeNet Automotive (the leading automotive data distribution company now owned by AutoTrader) gave me unique insight from all perspectives: vendors, 3rd party inventory sites and dealers.

Whether you think TrueCar is good or bad for the automotive industry, you have to step back and consider a few things:

(In regards to TrueCar having, and using, a dealer’s sales data) In the early days of inventory marketing, it was the general thought that having your inventory on every 3rd party site possible was a great idea. Most dealers signed up for every 3rd party site they could, especially if it was free. When I was an Internet Director, I signed up for them all also. When I was with HomeNet, I talked to many Dealer Principals that wanted their inventory everywhere. Most never read any “terms and conditions”, they just signed up. Any of these third party sites could have been polling their DMS for not only inventory but sales data and they never would have known. Nothing’s free. It wasn’t until recently that people started questioning the wisdom of shotgunning their data and, even then, it had nothing to do with whether the sites should have it but how it was effecting their SEO efforts and how the sites were using their data to collect leads then selling those leads to the dealer. It had nothing to do with the fact that they HAD the data in the first place.

When HomeNet Automotive integrated TrueCar into their inventory management tool, (IOL Pro), as a rep, I visited many dealers who loved the TrueCar feature and ability to use reports to close deals and research competitor pricing. Only a few even questioned where the data was coming from and in only one case was a dealer actually upset that we (ie. HomeNet) had the sales data at all. The fact remains that this data was given voluntarily by the dealer to hundreds of 3rd party sites, each with their own terms and conditions, and any of which could have been polling their DMS for sales data and, in turn, providing it to TrueCar, Edmonds, AutoTrader, etc. or any of the hundreds of other sites.

(In a now amusing tangent, industry people demonize Reynolds and Reynolds all the time for protecting their data (ie. not allowing unauthorized 3rd party access) and throttling their control over distributing it to just anybody and now these same people are complaining about 3rd parties having the data.)

Now, onto the lead program.. People are complaining that TrueCar leverages the dealer’s data (which the dealers are giving to countless websites already) to provide consumers information on the lowest prices for vehicles, converting the lead and offering it to the dealers on a per sale cost of $300 versus a per lead basis. Why is this so evil?

There are plenty of 3rd party sites that do the same thing with the only difference being that they charge per lead. Hell, even MANUFACTURERS do it. When I was in retail, I used a company with a similar pricing strategy named Autotropolis (since bought by Autobytel for $15 million). I LOVED those leads. I could easily identify a lead from them and factor in the $250 per sale fee into any deal structured or quote given to a consumer. I only paid when I sold a car. It was great. At least on a per sale basis, my cost per sale was fixed. With 3rd party leads, it wasn’t. I hear dealers complain about $900+ costs per sale with their AutoTrader programs yet they still participate. The point is that I was always in control of the sale. If I didn’t want to sell the vehicle at the pricing given to them, I didn’t. It was my choice. The fact is that I would rather have the opportunity to earn the sale than not have it. Why wouldn’t you want a fixed cost per sale on internet leads? 

Dealers have been sending their transactional and inventory data to 3rd parties for YEARS. This isn’t some new phenomenon that’s all of a sudden appearing. Everyone wants to single out TrueCar when, in fact, TrueCar is only ONE OF MANY companies that have their data. Dealers have willingly and happily provided this data to 3rd party sites for YEARS (at least as far back as 2003 to some sites that I personally know of).

To top it all off, dealers and industry professionals have been evangelizing transparency in their sales processes, pricing and interactions with consumers yet it appears that dealers don’t really want transparency, what is wanted is the illusion of transparency.

Bottom line: If you don’t want your data used by a 3rd party, stop giving it to them. I’m not just talking about TrueCar, I’m talking about EVERY 3rd party.

TrueCar is a business that pays for information received from the dealers themselves. Rather than demonizing TrueCar for monetizing the data by providing a service to both consumers (via transparency) and dealers (via sales), don’t participate.

As the saying goes: Don’t hate the player, hate the game.

(Edit: TrueCar is just a scapegoat and convenient target. I don’t necessarily disagree with all of the arguments, just the placing of the blame on TrueCar. Dealers created this, not TrueCar.)

UPDATE 12/1/11: Seems as if my friend Jerry created a new video.

Consumers Want Video Walk-Arounds. Here’s Proof!

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In my days with HomeNet Automotive, a new feature was released that allowed our customers to upload live video into their inventory for distribution to the third-party websites that would allow it.

Being in sales, I wanted to have a real video in which I could show potential clients the possibilities and an actual example of what one would look like so I enlisted help from a friend of mine who’s a GM at a nearby dealer group to allow me to video one of his employees doing a walk-around.
After filming it, I used it here and there when showing a demo of IOL Pro, HomeNet’s core inventory management software. After I left HomeNet Automotive, I promptly forgot about it.
Recently, I came across it in my YouTube video list and was ASTONISHED to see that it had almost 12,000 views in about 21 months! That’s an average of 570 views per month! This is without ANY exposure or publicity whatsoever. It was not on a blog post or anywhere. I can only guess that these 12,000 people came across this video via keyword searches either within YouTube or via a Google search. I did a quick keyword search and was astonished to see that my non-distributed or promoted video ranked 2nd in Google organic search results!
venza

Imagine if this video had actually been a part of that dealer’s actual inventory on their website as well as all the third-party sites. Given that this was a new vehicle, it could have been added to all of the listings for this model and year vehicle in their inventory. They could DOMINATE Google searches for their brands.

The proof is in the pudding. I highly doubt the people watching these videos decided randomly to watch a video walk-around of a Toyota Venza. It’s more likely that these were consumer’s interested in that vehicle.

This is advertising GOLD and cost them absolutely nothing.

If you want to watch it, here’s the video:

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