CarGurus, Inc. (NASDAQ:CARG) Q3 2019 Earnings Conference Call - Final Transcript
Nov 05, 2019 • 05:00 pm ET
trying to attract a more down-funnel customer in both the brand efforts that we do as well as our -- what we call ATA, algorithmic traffic acquisition. And so, I think the first point is that we're attracting people who are more likely to convert, we're getting smarter about that. And as a result, higher percentage of our users are converting.
The second is, we're putting resources against conversion, optimization and putting features and design in our site that is conveying more information to users so that they're more informed and more ready to convert or to connect rather with dealers. So it's both the intelligence in our spend and acquisition as well as the experience optimization on our site.
Understood. Okay. That's helpful. And then, on the advertising revenue, I know this is a small line for you, but in terms of just the OEM spending, anything that you might be hearing that about their propensity to spend on advertising? Are they holding back more? Are they taking longer to commit? What are you seeing there?
Hi, Naved, Sam Zales. We're working with all the OEMs and we're proud of that. I think we bring a unique value proposition in advertising, which is the largest audience in the marketplace and we're performing well for the OEMs. I do think the macro environment of some issues with union activity and other OEM trends in the marketplace are challenging. But we've seen growth year-over-year. We said it would be slower growth in advertising. I think the key thing for our business, as Jason just said, we are prioritizing our business and Langley said it, well, we might even forgo some ad revenue in the preference for leads and connections to our dealers, our core business will always be a priority for us. And I think, as we continue to serve every one of the OEMs in the market, we hope that our audience and the differentiated value proposition will drive continued growth.
Our next question comes from the line of Daniel Powell with Goldman Sachs. Please proceed with your question.
Great. Thanks. Just two, if I may. The first question is kind of focused on sort of growth versus margin trade-off. You guys have seen your marketing spend decelerate here the last couple of quarters and obviously shown a lot of strong margin expansion. Just curious, as you look at your opportunities to invest particularly with that cost per lead coming down year-over-year, what's your sort of willingness or philosophy around driving growth through putting more dollars to work in those channels?
And then, secondly, on some of the new products, just curious if you could give us a sense in the quarter for what were some of the strongest contributors in that bucket that you highlighted as being most pronounced this quarter than any other in the past? Thanks.
Yeah. Daniel, it's Langley. So, growth versus margin, obviously we have really two main businesses, domestic and international, and