Home  › Marketing › Automotive

AutoTrader.com to Buy Kelley Blue Book

  |  October 27, 2010   |  Comments

AutoTrader.com is on a bit of a tear, having recently acquired vAuto.

AutoTrader.com said today that it's buying Kelley Blue Book, along with its two sister companies, CDMdata and CDM Dealer Services.

"This will be a good thing for Kelley Blue Book," says Jeremy Anwyl, CEO of Edmunds.com. "AutoTrader.com started out as a listings service and is still very strong that way, while Kelley Blue Book is strong in used-car pricing." He noted that Kelley has been for sale, on and off, for the last 10 years.

In its press release about the sale, AutoTrader.com said it would continue to maintain Kelley Blue Book's independent position in the marketplace, retaining its CEO, staff and headquarters. The company did not make executives available for comment.

AutoTrader.com is majority-owned by Cox Enterprises and operates two other auto marketing brands, AutoTraderClassics.com and AutoTraderLatino.com. Earlier this month, it completed its acquisition of vAuto, a provider of software tools for used vehicle management, pricing and inventory optimization.

Both AutoTrader.com and Kelley Blue Book report more than 15 million unique visitors a month, while Edmunds.com says it averages more than 15 million each month.*

Like Kelley Blue Book, Edmunds.com has a consumer focus and emphasizes buying guides and information. It also refers customers to AutoTrader.com. Anwyl says he isn't worried about the consolidation of the other two sites.

"Does this destabilize this status quo? We don't know yet. It's certainly creating a very big player. But people have been talking about consolidation ever since I've been with Edmunds.com." He points out that the barriers to entry into online auto sales are low and new players don't need huge infrastructures or budgets.

While Kelley Blue Book's strengths in research and information could be seen as complimentary to AutoTrader.com's, the former has made recent incursions onto AutoTrader.com's turf, according to Peter Krasilovsky, VP of marketplaces and conferences for Kelsey Group.

Last year, it launched Trusted Marketplace in partnership with Vast.com, a service that let consumers search for cars by a variety of attributes. While dealers pay a monthly subscription fee to AutoTrader.com to upload listings, Trusted Marketplace used a pay-for-performance model. In a clear shot across the bows, Kelley's press release bragged, "Dealers will realize efficient sales at a fraction of the cost incurred with traditional, subscription-based classified listing models."

Says Krasilovsky, "Kelley Blue Book has gone up against AutoTrader.com, Cars.com and other auto portals. We have a website primarily known as being the blue chip for valuations and reviews trying to get into a new area where they'd be able to make more revenue."

The acquisition also lets AutoTrader.com experiment with a pay-for-performance model, Krasilovsky says. While that model has revolutionized much of online advertising, he adds, "People don't necessarily know which car they want, so there's something to be said for putting them in a browsing environment." Moreover, because AutoTrader.com also runs banner ads, the browsing model might provide more revenue."

The merged companies may also be well-positioned to take advantage of new revenue opportunities from services, parts and accessories, and customization, according to Larry Shaw, VP of research for Borrell Associates. AutoTrader.com already sends site visitors to Lending Tree for auto loans and Geico for insurance quotes.

"The way the auto industry has moved, car sales are not the highest priority," Shaw says. Many manufacturers and dealers have started to push service capabilities in various ways, while AutoTrader.com and Kelley Blue Book may be able to garner additional revenue for their huge combined traffic with other kinds of services and goods providers eager to connect with consumers.

"We'll see a lot more advertising for those kinds of services on car websites," Shaw says. "People who are shopping for a new car and realize they can't afford it, they'll see these other products and realize they can make their existing car last longer."

This article has been updated. Due to incorrect information provided to ClickZ, an earlier version had the inaccurate number of unique visitors at Edmunds.com.

ClickZ Live Chicago Join the Industry's Leading eCommerce & Direct Marketing Experts in Chicago
ClickZ Live Chicago (Nov 3-6) will deliver over 50 sessions across 4 days and 10 individual tracks, including Data-Driven Marketing, Social, Mobile, Display, Search and Email. Check out the full agenda and register by Friday, Oct 3 to take advantage of Early Bird Rates!

ABOUT THE AUTHOR

Susan Kuchinskas

Susan Kuchinskas has covered interactive advertising since its invention. The former staff writer for Adweek, Business 2.0, and M-Business covers technology, business and culture from Berkeley, CA.

COMMENTSCommenting policy

comments powered by Disqus

Get the ClickZ Marketing newsletter delivered to you. Subscribe today!

COMMENTS

UPCOMING EVENTS

Featured White Papers

IBM: Social Analytics - The Science Behind Social Media Marketing

IBM Social Analytics: The Science Behind Social Media Marketing
80% of internet users say they prefer to connect with brands via Facebook. 65% of social media users say they use it to learn more about brands, products and services. Learn about how to find more about customers' attitudes, preferences and buying habits from what they say on social media channels.

An Introduction to Marketing Attribution: Selecting the Right Model for Search, Display & Social Advertising

An Introduction to Marketing Attribution: Selecting the Right Model for Search, Display & Social Advertising
If you're considering implementing a marketing attribution model to measure and optimize your programs, this paper is a great introduction. It also includes real-life tips from marketers who have successfully implemented attribution in their organizations.

Jobs

    • Tier 1 Support Specialist
      Tier 1 Support Specialist (Agora Inc.) - BaltimoreThis position requires a highly motivated and multifaceted individual to contribute to and be...
    • Recent Grads: Customer Service Representative
      Recent Grads: Customer Service Representative (Agora Financial) - BaltimoreAgora Financial, one of the nation's largest independent publishers...
    • Managing Editor
      Managing Editor (Common Sense Publishing) - BaltimoreWE’RE HIRING: WE NEED AN AMAZING EDITOR TO POLISH WORLD-CLASS CONTENT   The Palm...