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New Auto Loan Leads Marketplace Shifts Into Drive

By Keith Regan E-Commerce Times ECT News Network
Jun 30, 2008 6:00 AM PT

Online sales lead exchange Reply.com launched a new automotive finance leads marketplace Monday, partnering with the Detroit Trading Company to help create what the company says will be the largest repository of consumers interested in securing car loans.

New Auto Loan Leads Marketplace Shifts Into Drive

Promising to make the act of buying and selling sales leads "as easy as purchasing clicks from Google," Reply.com said the automotive loan category would the first of several is plans to roll out on its lead platform.

Reply.com launched in April with the goal of building a platform that will enable smaller businesses a more cost-effective way of using the Internet to generate sales leads, Chief Executive Officer Payam Zamani told the E-Commerce Times.

Targeting SMBs

Zamani's own involvement with online media dates to 1994. He later funded Autoweb, which went public in 1999 and was later purchased by Autobytel.

Reply, he said, is meant to offer an alternative to cost-per-click (CPC) marketing through Google and others. "The category has not done enough to make it possible for those local businesses that have modest marketing budgets to take advantage of this channel," Zamani said, adding that many such small businesses have difficulty grasping the economics of online marketing. "The fact is that CPC has also become quite complex. You almost need to be an expert to do it effectively."

The marketplace will use a back-end technology platform for which Reply has patents pending and launched in the auto finance area because the company felt it could quickly generate liquidity there by attracting plenty of both buyers and sellers of leads.

Growing a Footprint

In addition to lead-generation sites and buyers that it attracts on its own, Reply is partnering with other networks to create a network-of-networks, Zamani said. The launch includes a partnership with the largest such network now in existence, the Detroit Trading Exchange.

The Detroit Trading Exchange is a trading venue where more than 300,000 automotive leads traded each month on a platform meant to emulate a stock-exchange marketplace based on transparency and competitive bidding.

"You have to have maximum distribution," he said. "There are networks that have access to leads but don't have maximum distribution, and so leads can't be monetized. By combining all those relationships, we can enable the marketplace to become that much more efficient."

Advertisers such as car dealerships will be able to go into the Reply.com platform and set up multiple campaigns, setting a monthly spending limit and customizing campaigns based on geography and other factors, such as car makes or models. Based on which campaigns generate more leads, advertisers can make adjustments to their marketing mix.

"There'll be no reason to ever run an unprofitable campaign," he said.

The platform was in development for a year, Zamani said, and is meant to be scalable and applicable to any category where ample liquidity can be generated by attracting both buyers and sellers.

Growing Market

The auto finance market is a logical growth target for Reply -- it originally focused on generated real estate and auto sales leads -- because automotive advertising spending is moving online in greater amounts each year.

Internet advertising spending in the segment more than doubled between 2005 and 2007, according to a recent report from eMarketer, while the amount spent on newspaper advertising fell more than 50 percent during the same time frame.

Zamani believes adding pay-per-lead to the marketing mix will only accelerate that trend.

Lead generation is something that many small businesses that don't want to take a chance on other forms of online advertising might be willing to try, Forrester Research analyst Andrew Bartels told the E-Commerce Times.

In the past, such lead generation transactions have taken place on an individual basis, leading to inefficiencies and uncertainty about pricing, however.

"The benefit of an exchange that offers liquidity and transparency is that buyers can feel comfortable they're paying a market rate and sellers know they're getting top value as well," Bartels said, adding that the players that are able to build the volume of buyers and sellers to maximize those efficiencies will be the ones that emerge as market leaders.


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