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Local TV Dabbles in Wheel Estate

Stations shift to car dealers to drive revenue 11/30/2007 07:00:00 PM Eastern

Much like children at the local Build-A-Bear shop, people in the Dallas-Fort Worth area can construct the car of their dreams. DFWvehicles.com allows users to select the year, make and model of their ideal ride, and add features like color, engine type and even floor mats. The search engine then offers up versions of that car—new or used—that are available in the marketplace.

Featuring some 22,000 automobiles, DFWVehicles.com isn't associated with online car-dealing giants like AutoTrader.com or Cars.com. It's the brainchild of CBS-owned KTVT Dallas, which launched the site on Aug. 30 with its local CBS radio and outdoor advertising colleagues.

“Dealers have been shifting their dollars online, and we saw this as a great protection move,” says David Henry, senior VP/general manager of two CBS radio properties in the Dallas-Fort Worth area. “There's an estimated $18 million in local auto search, and this is the only local [vehicle] search engine in the marketplace.”

As stations increasingly offer the community far more than breaking news and weather on their Websites, a growing number are dabbling in online car dealing, such as WYFF Greenville (S.C.)'s LocalCars4me.com, WOOD Grand Rapids' WoodTVcars.com, KHQ Spokane's KHQCars.com, and WSMV Nashville's WSMVCars.com. The sites, featuring reviews, price comparisons and video, typically represent partnerships with local auto dealers more than consumers looking to buy and sell cars. They're more local than the national car Websites, say managers, and more auto-focused than general online clearinghouses like Craigslist and eBay.

Not only that, but the sites enjoy the marketing benefit of being affiliated with a local media outlet. “The auto category has always been good to local television,” says WYFF President/General Manager Mike Hayes, who launched LocalCars4Me.com in January. “We're just farming where the ground is fertile.”

Studies reveal that people are increasingly comfortable with shopping online, and big-ticket items like cars are no exception. A study released earlier this year by Frank N. Magid's Web-focused Magid Media Labs on Web behavior and stations showed that 60% of Internet users buy retail products online at least once a month, and 71% look for retail products on the Web monthly. Moreover, almost half of those surveyed (46%) said they search for car dealers in their area on a monthly basis.

“By using its sales force, commitment to its community, and connection to the advertising base,” the study states, “a broadcaster could create new businesses to attack larger segments of the local online marketplace.”

Station managers, eager to keep their No. 1 advertising category robust, agree. “More and more dealers are looking for different [advertising] solutions, and more and more buyers are going online instead of using traditional media,” says WSMV General Sales Manager Paul Scott. “We saw WSMVCars.com as a growing revenue opportunity.”

Most stations opt for a standalone car site, often with minimal mention of the station, rather than have it be a subsection of the TV site—and risk it getting lost among the traffic reports and pet photos on the navigation bar. “I don't know that consumers go to a station site to buy a car,” says Henry. “We thought we were better off building a unique brand.”

While most decline to provide numbers, station managers say the sites are yielding promising returns. Hayes reports that LocalCars4Me.com did a six-figure profit in its first year. Just as important, they say the new advertising opportunity for the auto category doesn't seem to be cannibalizing the station's on-air advertising.

Magid Media Labs Director Jaime Spencer says the combination of relatively light overhead and potentially substantial revenue makes the stations' car sites a smart play. “They may not drive traffic like the news sites,” he says, “but they require considerably less time and effort, and they're focused on generating revenue.”

To be sure, Cars.com, jointly owned by media outfits including Tribune and Belo, and AutoTrader.com, partially owned by Cox, also go hyper-local by allowing users to search by zip code. “There's a great probability that there would be more cars available in a particular zip code on Cars.com than on a station's car site,” believes Ralph Ebersole, a director at Cars.com.

But the newer station entrants insist they can give the more established car sites a run for their money. “They have a several-year head start on us,” Henry says, “but we're growing every day.”

E-mail comments to michael.malone@reedbusiness.com

 

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