General Motors ( G M) And Cobalt Websites The Big Rip Off And The Slow Deception

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General Motors and Cobalt Websites-The
Big Rip Off and the Slow Deception

3 of 17 3/12/09 1:37 PM


Posted by Guest Poster | Sunday, March 8, 2009 | Posted in Opinions & Advice

Guest Posting by Frank Davis

Cobalt and GM Dealer Websites
I believe what you are about to read will open your eyes to the waste and mismanagement at General
Motors and Cobalt websites. We have to start at the beginning of the fiasco a couple of years ago
when GM had realized that the Internet was a boom that was not going away, not only that, but would
flourish year after year. Not being in the “internet business” They decided to hire a company that was
supposed to exceed in online marketing and advertising such as Cobalt websites. They had decided
that it was very important to send out the same message; they wanted the consumers to receive
consistent relevant messages and obtain the same information from one source.

Ok, now let’s look at the plan they created and put into action. It was and is a great plan with some
very devastating failures built in. General Motors and Cobalt decided that unless you have a website
by Cobalt you would not get a link from any GM advertising such as Chevy.com or from Onstar
mailers for people that purchased a GM vehicle. That was a great idea for Cobalt because now they
had the first monopoly on websites for General Motors. They may say it is not a monopoly and that
you can have any website produced by any website company you want, but the importance of links
from the manufacture sites to the dealer sites is so relevant that if you do not have these links it will
not only cost you new business but also repeat business. Let me give you a couple of brief examples.
You are a consumer visiting Chevy.com, you are searching for a particular vehicle doing your
research on incentives etc and you come across a link to search dealers inventory (remember no cobalt
website no link), you find a dealer in your area click on that link and search that dealers inventory. So
in this instance, a dealer without that link can potentially miss out on a huge customer base by not
having that all important link on the Chevrolet website. Even though that same dealer pays into the
same advertising funds as his/her co dealers. Most dealers do not even realize this as they take the
easy way, not understanding internet marketing, they take the word of the professionals at General
Motors and Cobalt, but what they do not see is the right to CHOOSE has been ripped away from them
as you are severely penalized for not using Cobalt websites. Another example is when a consumer
purchases a vehicle that has Onstar installed, that consumer receives e-mail updates that have relevant
links back to dealer website (only produced by Cobalt), so if you do not have that Cobalt website you
will not get the relevant links back to your dealership costing you potential service revenue and sales
revenue. So the potential for severe loss of income over the years is over whelming to say the least.

Let’s take a look at the waste that is being made everyday online from General Motors and
Cobalt websites. Somewhere about 2007 Cobalt came up with a plan and somehow convinced
someone at General Motors that they would get all of the dealers onboard the internet band wagon.
First they would give all the dealers a “free website” General motors’ would pay for that, as Cobalt
executives pointed out that if GM paid for those websites and sent out the same message then it would
garner more sales for GM. So the idea was sold and bought by GM, Cobalt would build a distribute
the websites and GM would pay for them as they would be free to the dealers. Cobalt also would do
free search engine marketing for the dealers, also paid by GM for its dealers. But seriously folks if
you believe for one minute that any of this was free then please rethink, and remember there is
nothing free in this world, there is always some cost somewhere and here is where it was paid from:

4 of 17 3/12/09 1:37 PM


“THE DEALERS ADVERTISING FUNDS” Yes everything you thought was free is paid for by the
advertising fees on the invoice. Every car sold, paid for those dealer websites. This new program is
called the iMR program and is nothing short of a huge scam and waste by General Motors and Cobalt.

Let’s look at the one most wasteful use of advertising funds: Pay Per Click advertising or search
engine marketing. Now remember this was also promised to its dealers for “free” but of course is not
free as it is also paid for by the advertising fees listed on each invoice. The concept here is very
simple, and has to be one of the most wasteful plans put into action by any corporation this decade.
What I am about to prove to you not only is wasteful but also has to be one of the most
“IGNORANT” plans put into action by General motors and I say ignorant as they are obviously blind
to the massive waste of advertising dollars.

The idea is simple: place paid search advertising at the top of search engines using the dealership
name and when it is clicked on have it point to the dealership’s Cobalt website. Seem reasonable?
Well let’s take a better look at it. If you type in a dealers name into Google, Yahoo etc, on that first
page, that dealers web pages will fill the whole first page and second and so on, this could actually go
on for hundreds of pages. So why would you pay for a search campaign using a dealer name when it
will show you all relevant pages without paying for it?

Does this paid search benefit the dealer?

Does this paid search benefit General Motors?

Nope, there is only one self serving reason to have this search in place and that is to benefit Cobalt
website company as they get paid to implement and run that campaign, so the more clicks the more
revenue, oh sure a large part of that goes to the web server but if you think it does not profit Cobalt
then please think again. This type of campaign also helps Cobalt reassure GM that it is relevant by all
the hits that it receives. Excuse me Cobalt and GM but wake up, don’t you think if you typed the
name of a dealership you would click on one of the very first ones to show up to get to the website?
So why pay for something that you get organically for free? It all comes back to waste of advertising
dollars and most probably hundreds of thousands in advertising costs that could be put to much better
use, such as: when some on types into a browser “Joe Schmoe Ford dealer”. Now a pay per click
campaign going after that search term and name makes sense if it has the correct message as it is
directed at a consumer looking at the competition. So if you can redirect that consumer then you
would have a successful pay per click campaign and one that would not be a waste of advertising
dollars.

All of this only serves Cobalt websites as a monopoly; it does not serve the dealer or General motors.
If you take a close look at the reporting analytics of Cobalt with an open mind, you would see a
unreliable analytics as the way they report only benefits “Cobalt”. Such as viewing a consumer who
looks at hours and directions on the website as a viable conversion. In my expert opinion, your
conversion from a website is “a hard lead to a dealer from the website with a name, telephone number
and e-mail address, and or a telephone call to the dealership. There is no other conversion, so to
grossly report otherwise is only to show untrue numbers in reports.

I have been asked what does it matter where the leads come from. Let me explain that everything
matters when advertising on the internet. One of the main reasons it matters where the consumer goes

5 of 17 3/12/09 1:37 PM


is what is called a conversion ratio. If a dealer has a website that truly converts 10% to 13% of its
website visitors compared to a website that converts 5% of its website visitors, I have to ask where
would you want your consumers going. One very ironic rule in place at Cobalt and General Motors is
everyone that has a Cobalt website gets the pay per click campaign even if they do not want it. It is
forced on the dealer. So in essence what happens is Cobalt is stealing from the dealer and using the
dealers advertising for their own benefit, not for the benefit of the dealer, not for the benefit of General
Motors but only for the benefit of Cobalt. And the sad thing, is it comes from General Motors
because a salesman sold the idea to some Bimbo at General motors. So if you are a dealer and you ask
Cobalt and General Motors to remove that pay per click campaign they will say “no”, everyone gets
it. So if you trademark your name and tell Cobalt and General Motors not to use it as it is trademarked
they just ignore you and do it anyway. In essence, if you are a GM dealer, GM is going to allow
Cobalt to steal from you. Although you might say it is ok, it does not matter, I have news for you “it
matters” when someone gains a monopoly and directs your consumers that you advertise for, to a
website that will deliver a message that is all one sided.

Just to put a little humor in the situation type in Chevrolet dealers Dallas, every dealer website that
comes up on the first page is built by Cobalt websites. Now if I was a Chevrolet dealer in Dallas and I
was not in the top three, I would want to know why not. Who makes that determination? It all has to
do with search engine optimization and when you have one website company building the same
websites for everyone then you get the same results stacked on top of each other and then there is no
competition. If they are all the same with the same message why would you visit multiple dealer
websites, it would just be a waste of time. So essentially, taking out not only the competition between
dealers but sending the same bland message to the consuming public. Which is what General Motors
in all of their infinite wisdom wants. Here is more humor, Cobalt websites for a fee will implement a
secondary pay per click campaign for you, meaning they will do sponsored search for terms they or
the dealer deem relevant, so if you have let’s say three dealers all within 20 miles of each other with
the same website, the same message, and the same pay per click campaign then what do you have?
General Motors might say the same message, but what does that do for the dealer? But also what
message is really conveyed to the consumer? They are all alike? No reason to go anywhere else?
What makes one dealer unique from the other? In that competing pay per click campaign, who
determines who is going to pay more, and what about when campaigns are focused on other dealers
with the same makes and models and not the manufacture competition.

General Motors and most importantly the GM dealers need to take a real hard look at their online
advertising and search placement. For more information or if you would like to debate this issue
please feel free in contacting me direct.

About the Author: Frank Davis is a Director of Internet Sales and has over 10 years
experience of automotive Internet sales and marketing.

ShareThis

19 Comments
Anonymous

6 of 17 3/12/09 1:37 PM


March 8th, 2009

I do not want to share my name because who knows what the repercussions could be if
someone at GM saw the reaction. However, you hit the nail on the head!! The only thing
MORE WASTEFUL than IMR is the LMA and that would take another 2 page article! Let the
dealers do what they do best. QUIT getting in bed with VENDORS!!!!

Jon Groenig

March 8th, 2009

I agree with you Frank, I was working at a GM dealership when they started pushing the free
website from Cobalt. I was in the process of getting a Dealer.com website put in place and had
to justify spending $900 versus the free site. We had a management meeting to compare the two
websites side by side, by the end of the meeting they had decided that while losing the links
was a negative, they would still rather go with the Dealer.com site because the look, feel, and
navigation were much better than the options that were available from Cobalt at that time.

A dealers website is a major part of their online presence and they should be able to decide who
they want to use, they shouldn’t be told “use our piece of crap or you won’t get our links”.

Umer Farooq

March 9th, 2009

@Frank… excellent piece. From my understanding… the “free” program is no longer available.
Is that correct?

Frank Davis

March 9th, 2009

Umer,,,,,You can still have the “free” website with Cobalt. You do not however get the support
person unless you pay the 299.00 fee they implemented at the ﬁrst of the year, They sent out a
memo with a bill attatched charging the 299.00. If you choose not to pay the charge then they
will still keep the website up and give you the “free” pay per click advertising using the name
of your dealership redirecting to the Cobalt website. You can get support from Cobalt if you are
not paying the 299.00 but they claim you lose more than you gain, huh?

Another idea was to up sell other services and products once the dealer is on the “free” website
and I am sure it has worked. Brilliant plan as I had said give em free stuff but really charge
them for it, then up sell the real good stuff, Great plan, awesome monopoly.

Kevin Frye

March 9th, 2009

Frank, I sense your frustration… I would venture to offer this. I believe much of the reason that

7 of 17 3/12/09 1:37 PM


GM started with the mandatory Cobalt sites was to bring a lot of GM dealers into the “modern
era”, as there were still LOTS of GM dealers that had not grasped the importance of the Internet
yet. I can tell you in my area that at least one GM dealer had a website that one of their
employees put up on their own because the owner didn’t see any value in the Internet (and it
was not a good website…). There were lots of GM dealers with no websites, or very poor
websites across the country. This approach by GM brought some standardization across their
brands and got dealers to get “onboard” with the Internet.

In GM’s defense, I have seen a tremendous improvement in their emphasis on being aggressive
and good on the Internet. I work with 15 brands, and I would place GM in the top 3 brands for
OEM support for the Internet.

With all that said, we still have separate websites for our GM stores, and keep the Cobalt one
for the OEM link (I agree, you must have). I also agree that the pay per click using the dealer
name for the search terms makes no sense (but makes lots of dollars for the vendor hosting the
ppc…). In a perfect world, we could have our own websites linked to GM’s sites - but I would
imagine that GM would want some requirements met (fair enough) to ensure quality for all of
their stores….

Alex Snyder

March 9th, 2009

Frank - great post! I love it on 3 levels:

1. It strikes home with other brands we do carry, so I can relate - MINI, VW, Audi, Porsche
2. CoBalt is the worst site provider, of the big ones, in the automotive arena - I’d rather pay for
something else than take their freebie
3. The more of us complaining about these stupid OEM sites, the better!

I think we need to have an article that talks about all the OEM sites and where they’re wrong.
Something we can refer our OEM’s to when they ask our opinion on things.

Jeff Kershner

March 9th, 2009

One size ﬁts all. That’s the approach many of the manufacturers take with these mandated
dealer website and online marketing ventures. It’s nothing short of a pain in the A$$, especially
for the more aggressive dealers that usually have their own thing going on.

I’m not for it BUT I can understand why it happens. And I believe it happens for many reasons.
In this example with GM, I think Kevin explained it very well in his comment. “Cobalt sites
was to bring a lot of GM dealers into the “modern era”, as there were still LOTS of GM dealers
that had not grasped the importance of the Internet yet”. There are no doubt MANY dealers that
are still trucking 20-15 years behind and STILL do not have an internet presence.

8 of 17 3/12/09 1:37 PM


How does a large company like GM get their antiquated dealers onboard? They leverage a
vendor to do it for them while placing all their dealers in one basket. You bring the lost dealers
up to speed while pissing off your aggressive dealers. However, it’s MUCH easier to manage
and have a relationship with one vendor rather 3-6. One point of contact, one enterprise report,
one company to praise or one company to blame. Unfortunately “one” doesn’t work. You’d
think GM would have that figured out by now.

As for wasting money on PPC by buying your dealers name. No doubt a huge waste, unless the
dealer didn’t have a website to begin with and they were supplementing with PPC until the site
was indexed in the SERPS. Of course we all know this is not the case. It would be interesting to
know what Cobalt was/is charging GM (I mean the dealers) for these dealer name keyword
clicks.
The money GM spent on these unnecessary clicks could have been spent on specific dealer
internet sales and marketing training for the dealers that needed to get up to speed.

Brian in Etown

March 9th, 2009

Hmmm….I wonder why G.M. has more then one brand if one size fits all.

Frank Davis

March 9th, 2009

Thank you for the posts. Understanding GM had to many dealers not paying attention to
internet marketing. They did have to do something I agree. Having one website company on
board to lower costs, I agree, but to trick everyone into a free website and actually charge for it?
Please lets give it up for “free” if you are going to use that term, not charge it to the advertising
funds on the invoice. Also when you have aggresive dealers do not redirect them to a website
they are not advertising for, do not steal from a dealer doing everything they can to market on
the internet. But most of all do not lie to the dealers that are making it work. It was a good idea
I believe they just got off track and imposed rules where they didnt need to be. Also they
needed onsite training. an experienced trainer should have visited every dealer to evaluate and
discuss the marketing on the internet. One size does not fit all as a matter of fact if its to tight
you might just kick it off.

Frank

Jennifer Schrader

March 9th, 2009

Frank! Thanks for posting this here. You and I have went back and forth on this subject which
now is a very touchy one!

Thanks again it is appreciated!

9 of 17 3/12/09 1:37 PM


Amanda Marsal

March 10th, 2009

I can understand why GM started the program in the begining, but by now any dealer that
would not be able to adequately handle theirselves with an online presence probably won’t ever
be able to. Why not let them weed theirselves out? I have a deep seeded loathing for Cobalt,
and want to pull my hair out everytime I have to call ECare for anything. We have so much
trouble with our Cobalt sites.. All of the cars were marked with manual transmissions for
awhile, we changed the company that sent the feeds for our inventory, and it took two months
for everything to show up properly. One hand has no idea what the other one is doing!!! I do
miss having an advocate to make changes for me, but I just couldn’t see paying $900 a month
for something I can do myself….

Amanda Marsal

March 10th, 2009

themselves!! I hate that…

Matt Watson

March 10th, 2009

I think it is good for the OEMs to mandate certain things on a dealer’s website.

But I think this is best done the way Toyota, Honda, Nissan and others do. They review the sites
based on certain requirements and the dealership gets in trouble if their site does not comply.
They don’t FORCE any particular vendors or special secondary websites.

John

March 10th, 2009

Just stumbled on this post and thought I’d chime in with some of my own comments.

First off, I think its an enormous mistake to punish dealers with ambitious internet programs.
Clearly, Cobalt’s solution was to get dealers on the internet. However, if you’re serious about
your internet program you realize that Cobalt can only get you so far.

And it’s not just GM. Scion has an agreement with Reynolds. Chrysler has a deal with
Dealer.com, etc., etc.

These companies can’t be everything for everyone. A dealerships internet program requires a
great deal of attention that Cobalt, Dealer.com, nor Reynolds can handle.
Things will move to the edges a bit more and I think the overall shopping experience will
improve for consumers online.

10 of 17 3/12/09 1:37 PM


Justin Duff

March 11th, 2009

Great post. I liken this to going into a Chevy dealer tomorrow and all you can choose from is
the Malibu. They stopped making every other vehicle because GM felt that was the best choice
for customers. You can complain about it all you want but you’ll still end up driving home in a
brand new Malibu. Just hope they made it in multiple colors!

John Kimel

March 11th, 2009

You can add Volkswagen and Audi to the list of manufacturers who require their dealers to have
a Cobalt web site in order to receive leads from the manufacturer.
The manufacturers should worry about their own web sites and allow their dealers to be
creative with their own. If someone goes to audi.com and asks for a quote, that quote should go
to the nearest dealer regardless of what web site provider he has chosen to do business with.
I suppose that a few years ago when we all started to realize how important a web site would
be, it perhaps made some sense for the manufacturer to want to dictate dealer web site content
and appearances…after all, the manufacturer had more money and resources to make good
decisions on behalf of their dealers.
Today, though, I think I can make the case that perhaps most dealers are smarter than GM, Ford,
Chrysler etc., all of which are setting new records for poor performance.
Maybe the dealers are actually capable of making their own web site decisions now?

Frank Davis

March 11th, 2009

I want to thank everyone for all the positive responses and support you all are a huge part of the
automotive marketing world we all live and play in. I received an e-mail from GM today which
wants me to push that much harder, I believe most of you realize the importance of what I have
been talking about in regards to the monopoly and the direction we are headed as having rules
stuck in front of us and not being able to make the choices we see best for our dealers etc. Here
is part of the e-mail I received minus the name of course.

Frank,

I have ran this issue down through both Cobalt and the Director of the IMR program at
GM. The bottom line answer is that IMR program will continue to include the Cobalt
website and a basic level of paid search advertising for that site. Modiﬁcations to those
offerings will not be allowed under the IMR program.
I understand this not the answer you were looking. xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx.
However, I have received very clear direction from Detroit on this matter and do not
expect a change.

11 of 17 3/12/09 1:37 PM


I have done my best to inform and give my best analogy of the situation I see as detrimental not
only to our advertising but our actual ability to make choices that effect the way we make a
living.

Frank Davis
918-520-6777

John Lewis

March 12th, 2009

Frankly, all the website companies are the same in certain aspects. I think it really comes down
to their conversion ratio or the traffic to the site being converted into leads, either phone calls or
emails. We personally have a Cobalt website through GM, and we have the upper package with
the search. We have gotten great results in the past 8 months. Our “procare” person is awesome
and always helping us with specials and going over our reports and constantly helping us with
our online strategy. The search that GM does for their dealers are on 3 tier levels. The first
pushes back to GM. The second pushes back to a DMA landing page. The third pushes back to
the dealer and is triggered by name and location of the dealer. I think this is a good thing that
GM is looking out for us and spending our money digitally. As far as doing additional search
with Cobalt, it has more than paid for itself. Unlike other companies I have used in the past,
they actually come up with a strategy and have someone running my campaigns rather than just
flip a switch and spend my money. We can sit here and bash GM and Cobalt or any other OEM
or website provider all day long, but at the end of the day, most of the OEMs are moving
towards this and if you ask GM and the dealers out there, it has greatly produced results (even
for some of us that have been doing this for a long time). Frank, it seems as though you really
have a bug up you about GM and Cobalt. I understand that some dealers want their freedom of
choice, but most make the wrong decisions. Coordinating efforts gives us better pricing and
more value. I love Cobalt and what they have done for my dealership. Best of luck to all of you.
Instead of complaining and complaining, come up with a marketing strategy that works for you,
use your procare person (the 299 a month is well worth it), and sell some cars. The squeeky
wheel gets the greese, but sometimes it gets replaced. Happy Selling!

Frank Davis

March 12th, 2009

Hello John

Thank you for the post and the information and I have to say it is great to hear that someone is
doing well with the cobalt site. If you notice at the begining of my post I said GM and Cobalt
had a great idea but with major faults built in. I had a good pro care advocate and was always
very helpful.

I have come up with a marketing stratagy as you have suggested and Cobalt gets in my way. I
am not complaning as you suggest but pointing out the fact that GM and Cobalt has lied to the
dealers and continues to direct consumers away from our website that we advertise for, I

12 of 17 3/12/09 1:37 PM


believe you have not read the article or understand its content and you need to understand that I
have a huge amount of respect for not only GM but also for Cobalt as they have a huge amount
of experience etc to offer “some” dealers. Other dealers that have been aggresive on the internet
have other ” marketing plans” that do not include Cobalt, simply said Gm should not push a
website provider on its dealers that have that “marketing plan” in place nor should they place a
PPC campaign using a dealers name when they have been asked not to. I want the Cobalt site
for one reason and that is to get the link from Chevy.com to a website for Jim Glover Chevrolet.

Thanks for the response. It is good to see another point by a dealer that is successful with a
marketing plan utilizing a Cobalt website.

Frank Davis

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