Hachette Jumpstarts Digital Auto Ad Expertise With $110 Million Deal

Hachette Filipacchi Media U.S. is accelerating its scale and expertise in the important online automotive category and will pay up to $110 million to buy Jumpstart Automotive Media, an online automotive ad network, parent Lagardere SCA announced yesterday.

Jumpstart gives Hachette the ability to serve ads to the consumer through the entire buying process -- from beginning to end. It will more than double the digital revenues in Hachette's auto category, said Jack Kliger, president and CEO of Hachette Filipacchi Media.

Through the acquisition, Hachette's CarandDriver.com, RoadandTrack.com and CycleWorld.com will be aggregated with Jumpstart's network of sites -- which include NADAguides.com, Vehix, and J.D. Power & Associates Autos -- to create a contextual display network in the range of 5 - 7 million unique car shoppers per month.

"We are buying a vibrant and growing business in a space of interest to Hachette," said Kliger. "It means, first of all, we have a very talented and experienced bunch of people who know a lot about the in-market automotive online business."

Jumpstart, whose 2006 revenues of $17.1 million were up 95% over 2005, also offers behavioral targeting, search engine marketing and lead generation services for dealerships and dealer groups. Its advertiser client base includes all auto manufacturers and more than 1,000 auto dealerships and dealer groups. The company was founded in 2000.

Hachette will consolidate its ad sales team with Jumpstart's staff of more than 75 digital marketing experts under the continued direction of founder and CEO Mitch Lowe, who will continue to lead the operation under the Jumpstart name and brand.

Improved advertising efficiency is the initial goal, but syndication of Hachette content within the Jumpstart site network and content syndication into Hachette sites may also factor in down the road.

Under the terms of the deal, which is expected to close in May, Lagadere will pay an initial $84 million in cash, and up to $26 million more in performance-based payments through 2010.

Research firm eMarketer estimates that in 2007, auto manufacturers, dealers and after-market vendors will account for $2.54 billion of the $19.5 billion total spent for online advertising, and auto marketers will spend $1.06 billion on search this year.

The deal between Hachette and Jumpstart started off as a business relationship that blossomed into something more, said Lowe, based on the natural fit. "The goal is to be the clear No. 1 media company as it relates to automotive," he said.

Among the competitors in the space are Edmunds.com and KelleyBlueBook.com.

Kliger said the business model is like the one it has with Curtis for newsstand distribution -- owning a unit that services other clients as well.

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