The company will focus on enticing more dealers to subscribe in 2020, Steinert said. CarGurus this week rolled out its revamped real-time performance marketing products, which includes social media ads, to dealerships nationwide.
And the company said it intends to reduce advertising on its website this year to offer a better consumer experience, with the goal of driving more leads and increase conversion to sales, CFO Jason Trevisan said on the earnings call. That likely will mean a short-term loss of advertising revenue, he added, as CarGurus expects “very little growth from our OEM and automotive partner advertising business in 2020.”
“While this decision certainly means forgoing short-term transactional advertising revenue, we know this decision is in the best interest of both consumers and dealers and supports a healthier subscription business for CarGurus over the long term,” Trevisan said.
He added that the revenue impact likely will result in “relatively flat” total revenue growth from the fourth quarter of 2019 through the first quarter of 2020. CarGurus projects first-quarter revenue ranging from $156.5 million to $159.5 million. For full-year 2020, CarGurus anticipates revenue of $664 million to $676 million.
CarGurus shares were mostly flat closing at $34.10 on Thursday.
