Autobytel Makes Strategic Investment in Newly Formed AutoWeb to Help Launch Innovative, Targeted PPC Marketplace for Online Automotive Advertisers
IRVINE, Calif. & MIAMI – Autobytel Inc. (Nasdaq: ABTL), the company dedicated to helping automotive consumers and dealers connect online, announced it has invested $2.5 million in cash to help build, launch and grow AutoWeb, Inc.’s pay-per-click (PPC), auction-driven automotive advertising marketplace, which is scheduled to go live in early 2014. Autobytel has an option to invest an additional $2.5 million as AutoWeb grows.
“We believe our investment in AutoWeb will not only create substantial opportunities to deliver serious car buyers to our customers and a personalized online experience to consumers, but will also increase monetization of our website traffic”
As part of the agreement, AutoWeb has acquired the AutoWeb trademarks and domain name (www.AutoWeb.com) from Autobytel for $1.5 million in AutoWeb stock. As a result of the initial investment, Autobytel now owns approximately 16% of AutoWeb. Jeffrey Coats, President and Chief Executive Officer of Autobytel, has joined AutoWeb’s Board of Directors.
Autobytel will become the first automotive publisher to benefit from AutoWeb’s PPC platform, receiving a share of the revenue generated by click-throughs at Autobytel’s websites. Autobytel said it believes the arrangement could represent a significant revenue opportunity over the next several years.
AutoWeb’s proprietary technology and unique PPC business model, which analyzes web traffic and adjusts advertiser costs accordingly based on traffic quality, sets it apart from standard pay-per-click models. The business model behind this innovative marketplace helped its original creators, Matias de Tezanos, Julio Gonzalez-Arrivillaga and Jose Vargas, build and grow BrokersWeb Inc., an insurance-based PPC advertising marketplace, from $1.0 million to $55.0 million in revenue over a three-year period until it was acquired in 2011. The group has worked closely together for nearly 15 years and has created, grown and sold several successful technology companies in the hospitality, online ad network and email marketing industries. Combined revenue of the companies founded by the group totaled more than $300 million.
How the new AutoWeb will work:
- AutoWeb attracts high-intent, high-volume, content-oriented automotive publishers to its network.
- AutoWeb’s platform helps publishers monetize traffic that has previously been under-monetized.
- In-market car shoppers researching specific vehicle brands at publisher sites are presented with highly relevant display ads and benefit from an online experience that delivers the perfect vehicle to meet their needs.
- Auto manufacturers benefit from gaining access to serious, in-market car buyers at the right price. AutoWeb’s platform enables manufacturers to fully optimize their ad campaigns in real time by model, zip code and demographics.
- AutoWeb generates revenue for every click on the ads it delivers and shares a portion of that revenue with its publisher partners.
- AutoWeb uses proprietary technology to evaluate traffic quality derived from the source and click-to-conversion data and adjusts advertiser costs accordingly to provide more clicks at the right price and quality.
“We believe our investment in AutoWeb will not only create substantial opportunities to deliver serious car buyers to our customers and a personalized online experience to consumers, but will also increase monetization of our website traffic,” said Coats. “The AutoWeb team has proven experience developing successful pay-per-click marketplaces. As the auto industry continues to exceed growth expectations – August SAAR surpassed 16 million units – and automotive advertisers continue to transition to digital media, the timing is perfect for introducing a first-class product that will benefit all marketplace participants.”
Strong and Growing Automotive Marketplace
The automotive market has now reached pre-recession levels, with August vehicle sales reaching 1.5 million units, a gain of 17% from August 2012. In a recent automotive advertising outlook study, Borrell Associates, a leading research firm, noted that new car sales should grow more than 54% this year, up from 10.4 million in 2009. At the same time, advertising spending is shifting from newspapers, television and radio, to online and mobile. According to the study, by 2018, total online spend by auto manufacturers and dealers is anticipated to grow to more than $20.0 billion, up from $14.0 billion in 2013.
“Our goal is to create a new client-driven advertising platform never before available in the automotive industry, focused on significantly enhancing client ROI by reaching consumers with the highest purchase intent,” said de Tezanos, Co-Founder and Chief Executive Officer of AutoWeb. “The automotive industry requires advertising innovation and efficiency to capture the opportunities presented by the transition to online advertising, which now accounts for more than 20% of the total $33.0 billion spent on automotive advertising in 2013, according to Borrell. We are honored to partner with Autobytel, the leader in helping manufacturers and dealers sell more cars. We are confident that AutoWeb will quickly be established as the premier advertising solution for the growing automotive industry.”
About Autobytel Inc.
Autobytel Inc., an online leader offering consumer leads and marketing resources to car dealers and manufacturers, and providing consumers with the information they need to purchase new and used cars, pioneered the automotive Internet when it launched its flagship website,www.autobytel.com, in 1995. Autobytel continues to offer innovative products and services to help consumers buy, and auto dealers and manufacturers sell, more used and new cars. Autobytel has helped tens of millions of automotive consumers research vehicles; connected thousands of dealers nationwide with motivated car buyers; and helped every major automaker market its brand online. Through its flagship website, network of automotive sites and respected online affiliates, Autobytel continues its dedication to innovating the industry’s highest quality Internet programs to provide consumers with a comprehensive and positive automotive research and purchasing experience, and auto dealers, dealer groups and auto manufacturers with some of the industry’s most productive and cost-effective customer referral and marketing programs.
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About AutoWeb, Inc.
Founded in 2013 and based in Miami, AutoWeb is launching a premium pay-per-click (PPC), auction-driven marketing network for the automotive industry. The company’s PPC, ROI-driven marketplace allows its clients to effectively target high-intent online consumers, while allowing online automotive publishers to better monetize traffic. For more information visit AutoWeb, Inc.