Autobytel Inc. (Nasdaq: ABTL), the company dedicated to helping automotive consumers and dealers connect online, today 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.
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.