If you read the headlines today, you might notice the buzz around the new big fish in the display ad pond. Here’s a hint: it was the fifth biggest company in the world last year by market cap. Okay, you guessed it, it’s Amazon.
You’re probably wondering what took them so long, but they’ve been quietly acquiring customers since 2018. I had a chance to sit down with one founder, Carson Henry, who has built a million-dollar business helping car dealerships advertise on Amazon.
Carson was working at a dealer group in North Carolina when he learned Amazon was expanding its advertising unit. There was only one problem: the Amazon ad exchange was prohibitively difficult to use. Could he figure it out and help dealerships sell more cars?
Carson’s answer was CognitionDigital: a programmatic, one-stop-shop for dealerships to create advertisements on Amazon to better sell cars.
After demonstrating his product to friends and colleagues, Carson partnered with four cofounders who had years of experience in automotive and tech and took it live. Now, CognitionDigital is an official Amazon partner with an expanding list of partner dealerships, zero marketing spend, and over $180,000 MRR.
Here’s how Carson turned a casual phone call into the next big thing in car sales.
A Career-Altering Phone Call
In 2018, Carson called his friend who had just gotten a job at Amazon Advertising.
“I just called to ask about the role,” says Carson. “We ended up discussing the pain points advertisers had putting ads online. A customer like a car dealership couldn’t walk up to Amazon and say, ‘I want ads on Amazon.’ They had to learn how the Amazon ad exchange worked and how to design ads optimized for it. However, Amazon Advertising could really help small businesses.”
Employed as the business development director of Hendrick Automotive Group, Carson knew the visibility issues car dealerships faced online. He had a business idea scratched out on a napkin by the end of the call: He would make an easy way for car dealerships to advertise with Amazon.
In the following weeks, Carson put together a product concept and began asking for feedback for his idea online. He shared his concept with Adam Frantz, CEO at an automotive digital marketing business called NetLook.
“I knew of Adam’s reputation and sent him a LinkedIn message asking for guidance to see if this could be a real thing,” says Carson.
Adam loved the product and shortly decided to come on board full-time as both CTO and co-CEO of CognitionDigital. Carson says Adam’s development background became instrumental to getting CogntionionDigital off the ground. “Adam does most of the development himself and has a lot of the product vision,” says Carson. “We contract a little bit, but he has his hands on keyboards all day. He has been pivotal to us scaling as quickly as we can.”
The next addition to the team was Matt Brletich, a former VP of supply chain management working with Adam at the time. With decades of operational experience, Matt was a natural choice for COO of CognitionDigital. “Matt has a great process-first approach when tackling logistics,” says Carson. “He brought valuable perspective and decades of experience.”
Finally, Carson brought on fellow Hendrick Automotive employee and marketer, Vasilios Lambos, to round out sales. “Between Visilios and I, we both had over a decade of connections with automotive dealerships,” says Carson. “That let us use two big dealerships as beta clients to polish the product and pitch.”
While Carson says having four cofounders can be difficult, he thinks their diversity in opinion and skills sets them apart.“It has been challenging at times, but if we zoom out, it’s a perfect marriage of perspectives.”
And Carson may just be right. CognitionDigital has only been on the market since April of 2021 and they averaged $188,000 MRR last month.
How CognitionDigital Works
CognitionDigital lets car dealerships get on Amazon’s advertising network and start selling as fast as possible through an easy, plug-and-play interface.
“Dealers give us their inventory feed with all their units, photos, and everything like that,” says Carson. “After that, we autonomously curate their advertisements for Amazon based on that information. We can do cars, parts, services, inventory sourcing, and analytics reports. It’s an all-in-one flip-of-the-switch platform. You can’t access a lot of the infrastructure we’re building anywhere else. No one else is building the way we are.”
Tapping into Amazon Ads gets car dealerships in front of many more customers than traditional routes like TV or radio. Due in part to Amazon’s expanding list of media holdings, Amazon Ads have a much wider reach than many realize. “The timing is perfect,” says Carson. “Amazon is gaining huge advertising market share right now. We get you all over the internet as well as on FireTV and other types of OTT advertising.”
Carson thinks advertisements through Amazon’s network are ideal for car dealerships because they collect better data on what customers want and need than other exchanges like Google.
“Amazon’s infrastructure and reach are pretty deep,” he adds. “It knows what customers like and value. We can action a lot of that stuff. For example, it offers a feature called Amazon Garage that tracks the kind of car you own to better recommend parts. This gives dealerships great information about what customers are buying and gives customers much more relevant offers.”
Carson paints an example of how this works:
“So say a new mother is expecting a baby and she drives a Honda Civic. We’re probably not going to serve her up another Civic. She’s going to want a Honda Odyssey or a vehicle with more space. She’s also going to want to hear about safety, convenience, and things like that. We can do that decision-making automatically and dynamically based on a dealership’s inventory.”
Knowing what cars customers drive is a boon to dealerships because it helps these businesses source used cars – a crucial element of car sales during the current supply chain backup and chip shortages. “We can say to shoppers, ‘Hey we see you have a Ford F-150 and we will pay this price for it,’” says Carson.
CognitionDigital runs on a subscription model costing $499 per month before ad spend. Carson says that fee more than pays for itself. “We just did a case study for a dealership that ran for three months,” says Carson. “We were able to help sell over 200 vehicle sales over that three-month window.”
Growing With Zero Marketing Spend
Carson boasts that his business has yet to spend a single dollar on marketing. Much of that he chalks up to massive market demand alongside Amazon taking an interest in their business.
“Amazon has leaned into us since we’ve helped people use their service,” says Carson. “They’ve even sent some of their ad partners over to us to help them expand their services.”
Being so close to Amazon only helps business at CognitionDigital. “Our biggest advantage is having the Amazon name. High-quality shoppers land on the site because of it. We also get a lot of word-of-mouth exposure from dealerships.”
The Future of the Dealership and Advice
As a vanguard of the dealership industry, Carson has gained a unique view of how it’s evolved. He shared his thoughts on where he thinks the industry is moving.
“You have these large retail groups that are buying up independent dealerships since they want more control over the customer experience,” says Carson. “They do that by controlling as many touchpoints as possible like ads. Franchise laws also restrict manufacturers from selling vehicles directly to the public. However, franchises and manufacturers have a shared interest in consolidating. That should benefit customers too. They want to provide a more consistent experience across the board.”
Another new trend he points out is tech companies building on top of the increasingly-valuable used-car industry.
“There are these giant used-car directories across the country today growing quickly like Driveway. They want to retail all used cars online across the country in one giant hub.”
Finally, Carson gives a little advice to founders building in the realm of SaaS.
“If you’re building a startup in any type of software, find a technical cofounder,” he says. “It makes a world of a difference to have a guy like Adam on our team. There are zero communication gaps over tech and it saves a lot of time and resources.”
You have to make mistakes. If there’s one thing you need, it’s to allow yourself the time to grow properly. Try as hard as you can to not set unrealistic timelines for your team.
He also encourages founders to be realistic about what they can achieve when they are new to the game. “You have to make mistakes. If there’s one thing you need, it’s to allow yourself the time to grow properly. Try as hard as you can to not set unrealistic timelines for your team.”
Carson could have easily spent his time trying to develop business in his industry the old-fashioned way: cold calling and finding paid media placements. But taking a little more time to learn another industry and how it could be applied to his own ended up doing more for his career than following the playbook ever could. If there is one lesson to be learned from Carson’s story, it’s to be curious. Everything is connected.
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