Changes in buyers’ habits drive CarSoup.com

Ten years ago, advertising man Larry Cuneo saw his auto-dealer clients caught in a media squeeze. The traditional media were consolidating — and, with little competition, they could raise their rates with impunity.

The cost of acquiring customers was rising, but the dealers weren’t getting anything more for their money — just higher rates for the same ads they’d been running forever.

Cuneo’s solution: jump on a new gimmick called the World Wide Web. With one administrative assistant and some spare cash, he created CarSoup.com, a Web site where dealers could promote their used car inventories with more detail at a lower cost.

Today, Bloomington-based CarSoup employs 100 people and serves both new and used-car buyers in 36 states. In a typical month, more than 500,000 people use CarSoup to find a car, motorcycle, ATV, personal watercraft — just about anything with a seat and a motor.

But he didn’t quit his day job. In addition to serving as president and CEO of CarSoup, Cuneo continues to run his agency, Cuneo Advertising. The two roles complement each other, he said.

“CarSoup is my brochure. When clients ask us if we can build a Web site, we just send them to CarSoup,” he said. “We live it every day. That’s different from an ad agency that just advises clients on the Web.”

David and Goliath
CarSoup is a David among Goliaths. The largest auto Web site, Autotrader.com, gets around 10 million visitors a month. Cars.com clocks in with around 3.5 million monthly visitors.

Larry Cuneo
Larry Cuneo

But both those sites are subsidiaries of giant media enterprises, with financial resources to match. Cuneo points out that Cars.com launched the same month as CarSoup — with $108 million in initial funding from a consortium of the nation’s largest newspaper chains.

“We had somewhat less than that,” he said drily. “The fact that we even exist speaks to the power of the Internet. We shouldn’t be here.”

Cuneo has focused on forging partnerships with TV stations in local markets. CarSoup gets a spot on the station’s Web site, and both parties benefit from each other’s traffic. Dealers list their vehicles on the site and customers are ultimately driven to a dealer Web site. Cuneo said he’s seeing increased interest from print media in the last year, and he’s been exploring more print partnerships.

Car dealers, as a group, don’t tend to be early adopters of new technology. In the early days of CarSoup, Cuneo said, he literally had to stop every day at one dealership and turn on their computer for them.

More and more search online
That’s not the case anymore. Dealers recognize that they need an online program, because more than 80 percent of car buyers start their search online.

A conversation with Cuneo veers all across the marketing spectrum; like so many successful marketers that I’ve met through the years, ideas tumble out of him, and the trip from Point A to Point B often detours through points X and Y.

One idea that stuck with me was a discussion of pricing and payment in the online world. Today, Cuneo said, anything that brings users to a Web site is valuable content. If people come to your site to look for cars, that’s just as valuable as if they come to your site to read election news.

“We’re content creators,” he said. “A used-car inventory — that’s content. So, how do you charge your content provider for bringing eyeballs to your site?

“If a reporter writes a story to bring eyeballs to your site, you pay him,” Cuneo said. “So, if a dealer has content, why should he pay you? You should pay him.” That’s got to be a frightening thought for already beleaguered newspaper publishers.

The Web is going to continue changing the car business, Cuneo said. The day may come when the familiar dealer showroom is a thing of the past.

That’s been a harder notion to sell to dealers, who love nothing more than a steady stream of potential buyers to their shops.

“That showroom traffic is still going to be there — but it’s going to be online,” Cuneo said. “You’re creating relationships online, and the customers only come to you at the end of the process.

“I tell the dealers, ‘Do you want a $20 million mausoleum that nobody comes to? Why not a smaller facility, with a great Web site, that lets you sell cars at a lower cost?’ “

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Comments (1)

  1. Submitted by Scott Lambert on 09/24/2008 - 08:55 am.

    Larry Cuneo is the real deal. An entreprenuer who has figured out how to make money for his clients and his company. Someone who figured out the web early and made the best of it.

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