Thomas White: Great. Thanks for taking the questions. I guess first off on OEM, I guess, the OEM component of the OEM and National entity, you said up 24% in the quarter. Sonia or Alex, can you remind us when like the insurance advertisers that kind of cut spending, when do we fully lap that and can we think about OEM kind of continuing on that trajectory for kind of the balance of 2024? And then I guess maybe a slightly bigger picture one, I think you said you grew traffic 5% last year, revenues also grew 5%. Can you just talk a little bit about your ability to kind of grow the business in excess of traffic growth in ‘24 and the years beyond as you kind of build up some of these products that are less dependent on traffic? Thanks.
Sonia Jain: Maybe I’ll – thank you for the questions, Tom. Maybe I’ll take the first one on sort of that insurance component. I think that really sort of spiked as an issue at the beginning of 2023. So to large extent, we should be lapping some of those challenges. As you look to 2024, I do think the Q4 year-over-year growth that we saw in OEMs, I wouldn’t necessarily use that as like the run rate going forward. We do see more investment sometimes come in to Q4 just based on the timing of releases, timing and phasing of their spend and investment in advertising. But we think 2024 has a really promising outlook when it comes to the OEM and National side of the business.
Alex Vetter: Yes, and I echo that. If you look at the past 12 quarters, we’ve been steadily growing the dealer revenue and the total revenue for the business despite OEM headwinds. And so the correlation between traffic and revenue, I think is more coincidental because such a bulk of our revenue growth has come in through non-traffic dependent solutions like AccuTrade or our dealer-inspire websites. These don’t have a traffic dependence. And so we’ve been outrunning the declines in National for a few years now with strong dealer growth and ARPD growth. Now that the OEM new car production levels have returned, we’re seeing increased interest in our solutions. Like there’s generally a healthy picture forming here. Tom, I think the opportunity for us to sustain our traffic levels, we believe it’s there because we’ve got the brand, we’ve got the content, we can sustain healthy traffic levels.
We’re not expecting big traffic gains in 2024. In fact, our goals more getting credit for all the value that we’re delivering through things like showing up better in dealer CRMs, capturing the value of the traffic that we’re delivering directly to dealer websites, the amount of phone calls that are ringing into the stores. Like we just need to tighten up the conversion funnel and the dealers performance, which is why we highlighted the dealer experience report on the call because the value is there, it’s just retailers don’t always connect the dots as clearly as we’d like.
Thomas White: Okay, great. Maybe just one last one, if I could slip it in. Alex, when you’re talking about the five growth pillars, I think you mentioned unlocking more platform advantages. Could you just elaborate a bit on kind of what you meant there?
Alex Vetter: Sure. I mean, I think there’s two things. One, we’re trying to create more leverage for our dealer partners, and so they’re looking for fewer point solutions and more connected tech. So that clearly is a thread. When we say we want platform efficiencies, we want to be able to deliver more product and solutions to dealers at lower costs because we’re leveraging a common backbone or the infrastructure of Cars.com and giving that power to our dealers. But specifically when we lay it out on the slide that you’re referring to, it’s really about driving those internal operating efficiencies here as well. As you know, last year, we started really in earnest beginning to cross-sell our solutions and integrating our sales teams from our various platforms.
That was part of the rebrand towards Cars Commerce is getting our sales teams to be able to sell all of our capabilities as opposed to one or another. And then finally tightening up backend operations, right? Consolidating our support teams so that we can deliver faster turnaround times for our customers, consolidating point vendors and negotiating preferred agreements for enterprise-wide use cases for various things like Slack or consolidating AWS accounts for D2C with the Cars Commerce platform. There are dozens of opportunities inside the company where we can find synergy and create leverage for investors in the business.
Thomas White: Great. Thank you.
Operator: Thank you. And your next question comes on the line of Naved Khan from B. Riley Securities. Please proceed.
Naved Khan: Hi, thank you. A couple of questions from me. Maybe just on, as I think about your 2024 sort of add spending on marketing activities, how should I be thinking about that relative to 2023 and how should that grow or not? And the second question I have is just on the VIN Performance Media. So demo at the NADA show was pretty aggressive. What are you baking in in terms of contribution from this in your annual guidance?
Sonia Jain: Well, I think in terms of marketing expense, which I think you were asking about, we expect to see some modest increases in marketing expense on a year-over-year basis, but I don’t think anything particularly dramatic. We continue to be focused on trying to deliver that engaged consumer audience to our dealer and OEM partners, and then also continue to be focused on how to think about elevating and continuing to elevate our brand in both the minds of the dealer as well as the consumer. I think your second question was on VIN Performance Media?
