AutoTrader Acquires VinSolutions – An Auto Industry Insider’s Perspective

While I was working as a speaker at the VinSolutions sponsored “Internet Battle Plan” 3 day dealer training workshop in Kansas City on Wednesday May 18^th, Sean Stapleton (VinSolutions Chief Sales Officer) approached me and said he wanted to update me on an important announcement regarding VinSolutions… He then told me about the Autotrader.com acquisition of VinSolutions and showed me the AutoTrader issued press release announcing the deal.  Was I surprised? Not really... My initial perception and response to Mr. Stapleton was along the lines of “Well, that makes more sense than most of the acquisitions I have been privy to, and congratulations on a job well done.”

Internet Battle Plan V

Shortly after Sean Stapleton updated me, we were joined by Mike Dullea, Matt Watson and other C-level VinSolutions executives.  To say that they appeared pleased with the breaking news would be quite the understatement! I can understand the enthusiasm and could not help to think about all the implications this deal could have for the industry and now I am sharing some of my thoughts with you.   First of all, let me state up front that in no way has this article been solicited, nor has it been written at the direction of VinSolutions, this is pure and simply the impressions and opinions of a veteran car guy (me) who has been working in the digital marketing space since AutoTrader.com began.

AutoTrader.com “Becomes One with Vin” Capabilities

As I write this story, I am listing to Sean Stapleton’s amplified voice as he explains the power of having one system that integrates all of a dealer’s internet marketing, website, CRM, desking, finance and service in one platform that is accessible via the web or a mobile phone. It is an impressive vision and I can understand why dealers want it and why AutoTrader.com wanted to be the company to bring it to them. From both a revenue development and a dealer satisfaction perspective, it makes a lot of sense.

I Have Seen This Before (NOT)

On a personal basis, having been through the acquisition of multiple marketing system providers while working at Reynolds and ADP over a 12 year period, I am amongst the first observers to recognize that not all acquisitions result in achieving the vision that inspired that acquisition in the first place. The typical challenges include the integration of old technology with new technology and the difference in culture between smaller high growth companies and larger mature organizations that take longer to make decisions and act on opportunities. As a result, many entrepreneurs move on shortly after these acquisitions and often the products either are fully integrated and live on as a part of the DMS offering or the product loses its competitive advantage.  This can be compounded by the departure of the entrepreneurs who kept an acquired product ahead of the curve.  After observing several of the other acquisitions that AutoTrader has made, comparing them with a DMS company might be inappropriate since it seems to me that AutoTrader has taken a different path.  For the most part, AutoTrader seems to be letting each company operate on their own while allowing their acquisitions to leverage the extensive resources within AutoTrader to help the new members of their family of companies to grow.  

The AutoTrader Difference

This makes a lot of sense because AutoTrader is also an entrepreneurial high growth technology company so they probably have a better understanding of how to maintain the momentum of the companies they bought rather than scaring the management away. After speaking with Dale Pollack (vAuto) during the Automotive Leadership Roundtable Awards in Miami, and with Joe Vraneza (KBB), combined with observing what AutoTrader has done so far with their Kelley Blue Book and VAuto acquisitions… This is one auto industry observer (me) who believes that Chip Perry (AutoTrader) knows what he is doing by purchasing VinSolutions and how to get the most out of the company in the long term.

AutoTrader’s Growth Trajectory

Sometimes I forget that AutoTrader has not always been the market dominating internet advertising company that it is today and that just like vAuto and VinSolutions it was a start up internet company that has experienced extraordinary growth in a short period of time. As a result it seems Chip Perry knows exactly how to help the companies he has bought to scale through the different stages of growth they will most definitely experience with AutoTrader’s support. Chip is definitely one of our industry’s most innovative thought leaders and this acquisition could have more impact than any other he has made so far because of the impact of all the technology in every department of the dealership: New, Used, Finance, Service, Parts, BDC, Internet and Marketing.

DMS² Concept

While I was speaking with Sean Wolfington, a VinSolutions shareholder and entrepreneur, he described what VinSolutions offers dealers as a “Dealer Marketing System” that is every bit as significant to the dealership as their “Dealer Management System”.  Wolfington stated “Most dealers spend too much money with too many companies who do online marketing; search, banner ads, websites, CRM, desking, finance etc and the systems don’t integrate. VinSolutions has grown so fast because dealers like an “all-in-one” dealership marketing system that gives them everything they need for less money and it is integrated with whatever DMS system the dealer choses to use...” 

Wolfington went on to say, “AutoTrader's digital advertising has consistently delivered a lot of leads and sales to dealers and now they can give their dealers a system to convert more leads to sales and that helps them generate their own leads to all their profit centers: new, used, finance, service and parts.“

As I continued to discuss the events of the day, and all the things that must have happened leading up to the announcement by AutoTrader that they had agreed to acquire VinSolutions, Sean Wolfington went on to say; “Mike Dullea (CEO) and Matt Watson (CTO) built an extraordinary technology platform and leadership team with talented guys like Kendall Billman and Sean Stapelton, the best salesperson in the industry... They are the best at what they do and Dullea is a relentless leader who had the vision to build a fantastic company and team.”

What Does It All Mean To Car Dealers?

If you are a dealer or general manager, you have GOT to keep an eye on what types of marketing and sales solutions this marriage between AutoTrader.com and VinSolutions produces… Keep up to date on the babies that result, because if your competition does and you do not, it could cost you market share and profitability.  I will personally be paying very close attention to the results of AutoTrader.com purchasing VinSolutions, because after 30 years in the car business, I know when something has the potential of changing the rules of our game, and this combination of the biggest automotive advertising company online with the most integrated opportunity management system I have ever seen (VinSolutions) certainly has the potential to change the automotive marketing and sales landscape.  To draw an analogy, think about how the emergence of the iPhone has driven all of Apple’s competitor’s towards producing better cell phone handsets and operating systems… This AutoTrader and VinSolutions combination has similar potential.

Written by Ralph Paglia

Vice President

Tier 10 Marketing

www.Tier10Marketing.com

cell: 505-301-6369

rpaglia@gmail.com