Two Internet auto-buying services are introducing new ad campaigns.
CarsDirect.com of Los Angeles will launch a campaign designed to prove it means business even though the company is only five months old.
The company's $20 million fourth-quarter ad push from Think New Ideas of West Hollywood, Calif., begins Nov. 1 in Los Angeles, New York and San Francisco with the tag line, 'America's No. 1 way to buy cars online.' It will include TV, print, outdoor and online.
The campaign will run through December. Additionally, CarsDirect.com expects to spend $100 million to $200 million on advertising during the next three to five years.
CarsDirect.com was launched in May and has received $30 million in financing from Idealab Capital Partners, Goldman Sachs and others. CarsDirect.com, which says it sells more than 1,000 cars a month, aims to raise that to 2,500 by year end.
Unlike Autobytel.com and Autoweb.com, which refer consumers to dealers, CarsDirect.com lets consumers research, price, select, finance, order and arrange delivery of a new car online. CarsDirect.com buys cars from franchised dealers and resells them.
In online activity, however, CarsDirect.com still trails the industry leaders. According to Web measurement service Media Metrix, CarsDirect.com got 215,000 visitors in August. In contrast, Autoweb.com had 731,000 visitors and Autobytel.com had 1.1 million.
Adam Weiner, a senior analyst at the consulting firm Gomez Advisors, said CarsDirect.com faces obstacles. To guarantee prices to consumers, CarsDirect.com sometimes is forced to subsidize sales. 'If the dealer is not willing to sell to CarsDirect for a price CarsDirect has guaranteed to a consumer, they have to pay the difference,' he said.
NEW CARS.COM ADS
Separately, Cars.com's first advertising bowed last week on TV and radio in 16 markets. The media buy in the fourth-quarter campaign is nearly $12 million, the company said. Cars.com's Web site debuted in June 1998.
Consumers and car dealers are targets of the blitz. 'The Internet is a tool to help people shop for cars, and an important tool to help car dealers better meet customers' needs,' said Jim Maguire, marketing director at Cars.com.
Ad agency Stein Rogan + Partners in New York created two humorous TV commercials and two radio spots. A TV spot shows actors on a stage reciting well-known quotes, such as 'Win one for the Gipper.' The narrator asks, 'Want a quote you can really use?' before explaining the site's services.
Cars.com is a division of Classified Ventures Inc., a Chicago operation formed by eight newspaper companies. Cars.com has a version of its Web site on 92 newspaper Web sites across the country and has vehicle inventory in 26 of the 30 top markets.
The company is focusing its marketing efforts on driving local car shoppers to local car dealers.
Said Maguire: 'Car buying, even on the Internet, is still a local decision.'
Staff Reporter Jean Halliday contributed to this report