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 San Francisco This Year's Premier Digital Marketing Event is #CZLSF
ClickZ Live San Francisco (Aug 11-14) brings together the industry's leading practitioners and marketing strategists to deliver 4 days of educational sessions and training workshops. From Data-Driven Marketing to Social, Mobile, Display, Search and Email, this year's comprehensive agenda will help you maximize your marketing efforts and ROI. Register today!

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

BigDoor: The Marketers Guide to Customer Loyalty

The Marketer's Guide to Customer Loyalty
Customer loyalty is imperative to success, but fostering and maintaining loyalty takes a lot of work. This guide is here to help marketers build, execute, and maintain a successful loyalty initiative.

Marin Software: The Multiplier Effect of Integrating Search & Social Advertising

The Multiplier Effect of Integrating Search & Social Advertising
Latest research reveals 68% higher revenue per conversion for marketers who integrate their search & social advertising. In addition to the research results, this whitepaper also outlines 5 strategies and 15 tactics you can use to better integrate your search and social campaigns.

WEBINARS

    Information currently unavailable

Jobs

    • Interactive Product Manager
      Interactive Product Manager (Western Governors University) - Salt Lake CityWestern Governors University, one of the 20 largest universities...
    • SEO Senior Analyst
      SEO Senior Analyst (University of Phoenix (Apollo Education Group)) - San FranciscoSEO Senior Analyst   Position Summary...
    • SEM & Biddable Media Manager
      SEM & Biddable Media Manager (Kepler Group LLC) - New YorkAs an Optimization & Innovation Manager at Kepler Group, you will be on the bleeding...