Online automotive site TrueCar has signed a deal with direct marketing company Guthy-Renker that has the latter taking a major stake in TrueCar and also gives the agency the imprimatur to create a national campaign that starts in less than a month.
The deal with Santa Monica, Calif.-based TrueCar -- a new and used car pricing, trends and forecasting site -- involves Guthy-Renker affiliate GR Match. In addition to taking an equity stake, GR will do targeting, messaging and network strategies.
TrueCar CEO Scott Painter says the move is about taking the site mainstream. The site also focuses on real-time pricing of vehicles from aggregated data it buys from dealerships nationwide. He says TrueCar makes money when dealers make a sale and not from the sale of leads to dealers.
"We knew we needed to grow the brand and began looking at ways of doing that," says Painter. "Guthy-Renker comes to the top of every direct-response list; they are the heavyweight for media buying, the most effective in terms of creating ads that have positive return on investment," he says. "They are absolutely the ideal partner for us, given that we don't have the 'muscle memory' to know what it's like to advertise and build a brand."
Painter says it also helps that Guthy-Renker, like TrueCar, is based in Santa Monica. "When we first sat down and we asked if we could hire them as agency, if they would do the creative and media buy, they said, 'We don't do that.' They wanted an equity partnership. What they said was: 'This is the most exciting direct-response value proposition. You are solving huge frustration, and the story is really good.'"
Painter says the company will start radio spots in the next three weeks in test markets, with television executions to follow, also initially in four test markets through summer and fall. The national media ramp-up will be in 2012. Painter says efforts include signing a spokesperson and partnering around things like auto racing.
TrueCar has actually begun that part of the program, signing Star Mazda open-wheel racer Gustavo Menezes in a deal that puts TrueCar branding on his vehicle. "He's an exciting young racer; we own the car, and we are bringing that visibility to TrueCar, and we are even looking at Indy sponsorship opportunities that would take us to a much broader audience," says Painter. "The one thing that will be really important is that all promotional activity has return on investment; we are not going to be spending to build a brand unless we hold dollars accountable."
Painter says the move is necessary to grow the business. "One thing we know is that while we are growing, we are still relatively unknown. We are picking up momentum but we want to be 10 times larger over the next 10 months."