A Newspaper-Sponsored 'MLS for Auto Dealers'

By: Steve Outing

It's a great idea. Create what in effect is a local Multiple Listing Service (MLS) for local automobile dealers on the Web, creating a one-stop online shop for consumers looking for used cars. And have it run as part of a newspaper operation, bringing in new print revenues at the same time as you prevent non-newspaper competitors from starting something similar and eating away at automotive classifieds revenues.

That's the idea behind Autobuying Net (ABN), a new Web/print service launched this month by the San Diego Union-Tribune. Tied in with the printed newspaper motor vehicle classifieds, the new Web service already is having a positive impact on the California daily's bottom line.

Soft launched in mid-August, ABN is a Web site/print program that works with local auto dealers to put their up-to-date inventories of used cars online in a common searchable database Web site -- in exchange for a commitment to place a significant number of classified ads in the Union-Tribune's print edition. So far, the response has been promising, with dealers not yet in the pilot program asking when they will be able to join in, according to the project's manager.

The system uses technology created by Scottsdale, Arizona-based Management Process Integrators Inc. (MPI), which has developed a system -- called AutoMart -- to take data from auto dealers' proprietary inventory systems and 1) use it to create a searchable Web-based automobile site containing listings of all vehicles from participating dealers for sale in the San Diego area, and 2) automatically create print liner and classified display ads for selected vehicles, formatted for a newspaper's front-end classifieds system.

Print driven (pardon the pun)

Barbara Costantino, project manager for Autobuying Net, says that the program is believed to be the first of its kind, made possible by the new MPI software. And while an online project at heart, the program is seen primarily as print driven. Print classified ads drive traffic to the ABN Web site, and the bulk of the revenues come from print classified ad sales.

Auto dealers who participate in the program first must agree to run print classified ads (liners or classified display) in the Union-Tribune for at least 20% of the vehicle inventory on their lots. In exchange, ABN puts 100% of their inventory on the Web, with each vehicle getting its own listing -- which includes a detailed profile of the vehicle, including price, mileage, color, features, etc. (The system reads vehicle identification numbers (VIN) from the inventory systems, from which it can discern what features a particular vehicle has.) The newspaper also sends a photographer out to take pictures of a dealer's cars, which are included in the listings and optionally in print ads. For the dealer, there are no costs beyond buying print ads for at least 20% of the used cars on the lot.

Costantino says that the program has proven to be a great way to increase printed automotive classifieds. In the program's first few weeks, she estimates that the newspaper has about 500 additional used car ads per day that it would not have without ABN. That represents roughly an extra printed page of classifieds per day. (During the trial phase, ABN print ads are running on Fridays, Saturdays and Sundays, but Costantino expects to move that to seven days a week soon.) During the first week for ABN, there were 2,750 vehicles listed on the Web from the four trial dealers.

In the printed classifieds section, ABN program ads contain an ABN code number, which consumers can use when they visit the Union-Tribune Web site to quickly find a complete listing -- including photo -- of the vehicle they see advertised in a short print liner ad. (Online, they can simply search for a particular vehicle by specifying preferences in a search field, such as for model, year and particular features desired.)

Participation in the ABN program is sold primarily by the Union-Tribune's classifieds sales representatives, and is managed by the newspaper's advertising department, headed by ad director Gary Moore. Where the online department, headed by Jim Drummond, comes in is in selling banner ads on the ABN site; the department has an online ad sales specialist. (Print sales people also can sell online ABN banner ads if one of their accounts wants it.) Banner ads are expected to appeal to automotive aftermarket businesses, such as repair shops, tire dealers, insurers, etc.

Drummond's online department does benefit from ABN, of course. Costantino says that a percentage of revenues from the ABN-generated print ads are allotted to it in consideration of running the online component of ABN.

Dealer no-brainer

For participating San Diego auto dealers, supporting the system is simple. Using their existing inventory database systems, once a week they output a standard inventory report which is e-mailed to ABN where it is processed by the MPI system. Most dealers use one of four common proprietary inventory systems, and MPI's software can interpret data from any of them. Costantino explains that dealers have the ability from within their inventory systems to specify which vehicles they would like advertised in print, as well as type of advertisement (3-, 5- or 10-line ad, or 16-line ad with photo of vehicle). The MPI system then automatically creates the finished ads for the newspaper classifieds front-end system.

Over time, more dealers will interact directly with the system -- choosing which cars they want advertised and type of ad -- through a Web form interface. One dealer already is working with this system, which gives more control but requires a bit more work on their part.

ABN at launch is only for used cars, but Costantino says the newspaper likely will expand the program to include new cars also. In its "soft launch" period, only four major San Diego area dealers (representing 20-plus individual dealerships) are taking part, but the program will be opened up to others when the Union-Tribune staff is comfortable that the system is working and can handle a larger load. Costantino says other dealers already are asking when they can start using the system -- fearing that their in-town competitors are getting a competitive edge.

Costanino says the participating dealers are reporting getting e-mail responses to their online listings, and have reported customers coming into their showrooms armed with computer printouts of ABN pages showing particular cars they are interested in seeing.

The deal

The Union-Tribune is using MPI as a service bureau for the ABN program; it runs on MPI's servers, managed for the newspaper. (The paper is MPI's first customer for this product.) MPI marketing communications manager Jill Campbell says the company will either operate as a paid service bureau; enter into a revenue sharing arrangement (as is the deal with the Union-Tribune); or do a straight software licensing deal for between $50,000 and $150,000 (depending on the newspaper's circulation). Costantino says that the Union-Tribune is considering shifting to a licensing scheme at a later date.

She is optimistic about the profit potential from the ABN program. The concept is similar to the paper's Homebuying Net, an online program that works with the local Multiple Listing Service for real estate. That program, launched in late 1995 and using different technology, was profitable within 30 days, Costantino says. The newspaper advertising staff has similar high hopes for Autobuying Net.

Contacts: Jill Campbell, jcampbell@mpiinc.com
Barbara Costantino, barbara.costantino@uniontrib.com

Hard time with a soft launch

Last week when I wrote about Alabama Live, the Advance Internet Web site had planned a "soft launch" for last Friday. Editor-in-chief Michael Carmean reports, however, that the site experienced some severe server problems that delayed the launch until this Tuesday. If you tried to look at the site after reading my column about it, you may have been disappointed. Try again.

No column Monday

Due to the Labor Day holiday in the U.S., there will be no Stop The Presses! column on Monday. The column will resume on Wednesday, September 3.


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This column is written by Steve Outing exclusively for Editor & Publisher Interactive three days a week. News, tips, and other communications may be sent to Mr. Outing at steve@planetarynews.com

The views expressed in the above column do not necessarily represent the views of the Editor & Publisher company


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