What you need to know:

• Carsales’ latest half-yearly results show its multi-year media business transformation to put first-party data at the heart of its offering is paying off, with revenues up 22 per cent to $34.5 million. It’s now on track to realise more than $60m in annual revenues from media sales – a major turnaround for the division over the last few years.
• The completely addressable media offering, dubbed Carsales mediahouse, has seen the marketplace business invest in a raft of technology solutions over the last three years, from Adobe’s CDP to AdFixus identity resolution.
• It’s also been building out a range of internal technical capabilities, including its own tag solution, AI driven-optimisation tools, self-service platform for advertising and measurement solutions that close the loop on advertising for its customers.
• With such capability in play, Carsales GM media product and technology, Stephen Kyefulumya, says not only been able to resurrect addressable audiences lost with the demise of cookies on Safari browsers, it’s well set-up to retain addressability as well as reporting when Google finally drops third-party cookies later this year.

It’s been three years in the making: A completely addressable media offering that would turnaround Carsales’ media business and bring its marketplace into the post-cookie era.

Underpinning this ambitious plan, dubbed Carsales mediahouse, were several key technology elements. Adobe’s Real Time CDP for people-based matching, plus an identity solution from AdFixus that stitches together identities into a single customer view across an increasingly mobile audience base. In addition, Carsales has built out a self-service platform for advertisers to access inventory and data insight called Ignition; a creative builder capability and AI-driven optimisation tools; and a measurement offering. Alongside this, there’s been an emphasis on mobile-first delivery, as well as delivering a full-funnel, “white glove” execution solution for client briefs called Fuse.

Those are the five foundation pieces. And as Mi3 reported last year, it’s already seen Carsales resurrect audiences lost through the demise of third-party tracking across Safari globally. As of the ASX-listed group’s latest financial report, it’s seen media revenue continue its trajectory of double-digit growth, getting mediahouse one step closer to realising its ambition of $60 million in annual media revenue.

The latest piece of the pie is a tag solution to connect the dots on audiences active not just on the Carsales platform, but outside of it as well, extending the advertising play – and reporting – outside of the platform’s four walls.

The next question: Does this mean Carsales can cover off the addressable audiences Google is finally shutting off through the deprecation of cookies in Chrome later this year?

“We don’t care what Google does; Safari has already done it. The industry has been operating on 40-50 per cent less addressable inventory because that’s what Safari shut off. We are ready with Google and we’re confident about the infrastructure we’ve built,” GM media product and technology, Stephen Kyefulumya, tells Mi3. “Now Google has woken up finally, and cookie depreciation is happening and we’re 1 per cent down, this solution will solve for that.”

Building a lifestage, objective-based advertising business

As Kyefulumya describes it, Carsales has been setting itself up as a lifestage business for advertisers. The group had already been above average at segmentation thanks to the raft of filters available through its car sales marketplace. Closing the loop between behavioural and PII data is what takes it beyond offering either audience targeting or contextual targeting, and combining both into a full-funnel marketing play.

“It’s about understanding the person and identity holistically, then knowing they are moving from being a car buyer – what type of car, brand. That is what enables us to define a persona but also segmentation of what brand affinity they’re assigned to. That’s what we sell to advertisers,” Kyefulumya says.

“If you need to reach someone in our platform, you’ll be able to reach them. Also we have the contextual element – the depth we go to means we can give you brand affinity, segment affinity. We look at buying journeys and we’re not just telling you someone is interested in Honda, we can tell you where they are in their buying journey – starting out, or seven months out, or are they ready to buy. That depth is very powerful. And it’s where we are now at with our solution.”

As an example of the growing sophistication of campaigns on its platform, Carsales highlights several objective-based media (OBM) strategy efforts including one for Nissan as well as one for Mitsubishi where Kyefulumya claims “the results are staggering”. Nissan saw a 41 per cent uplift in conversations, an 11x higher result than other channels, plus a 20 per cent increase in clickthrough rate. To make the campaign work, data was collected from both Carsales and Nissan’s websites, then analysed through a data clean room to spot audience overlap.

“But that’s just in the car vertical. Think about the signal of a person going from cars to bike: What does it tell you about them? Or if they’re going to look at caravans or boats?” Kyefulumya asks. “Understanding those signals in a first-party context is the big play going forwards as cookies go down. That level of understanding of users and real behaviour is something we believe will be extremely attractive to marketers going forward.”

Tackling measurement post-cookies

Everyone has been talking about addressability as one of the big challenges of losing third-party cookies, but measurement is just as important – and just as impacted. And after years of lethargy, Kyefulumya believes the majority of marketers have finally realised both implications – and are now in panic mode. 

“There’s this first half of the year panic stage, when people start realising this means things like measurement is being cut off. Then there’s the second half… where in my view we’re going to see a lot of advertisers with that foundational element being taken out from under them on measurement,” Kyefulumya continues. 

In response, Vilusic says Carsales has created four different measurement solutions for customers – from standard A/B testing through to attribution to sale. 

“If you want to continue measuring based on the way things have always been measured, we can do that for you. But the real cause of impact is where we want to focus on: how we put the business metrics forward, not great numbers on a spreadsheet you’re trying to correlate to business outcomes,” he says. “That’s the game for us to win. We have the data we can model for that, which is the differentiator.” 

Another complementary pillar is having AI/Machine learning and optimisation of campaigns available to advertisers. 

“When someone goes into Ignition, when they’re activating the campaign, they select the objective and we have tech behind the scenes that are optimising everything towards that objective. Again, all our advertiser sees is better performance, but there has been quite a chunk of innovation we’ve had to do to enable that,” Vilusic says. 

“Our AI is a prediction-based model we built in-house which essentially uses what we believe in our industry are the strongest signals of intent for someone to buy something – an inquiry or someone purchases something – so in terms of applying the model, it looks at the behaviour that’s led up to that and we productise it in real-time.” 

Getting to this point has meant focusing on how to make advertising more sophisticated but with no barriers to entry. 

“We have three ways to do that. One is top-end sophistication, which is two partners matching PII and informing to buy. That probably sits at the top and there’s a small level of highly sophisticated advertisers that have quality data, privacy compliant and large enough to do meaningful stuff with,” Vilusic explains. “The middle one is I have PII and can’t do anything with it, or I don’t. That’s where our first-party identity solution comes in – you implement a tag on your site and we’re matching based on first-party signals. The third thing is I have nothing and I want to leverage Carsales’ sophistication. That’s where our segmentation comes into play.” 

Driving adoption

With all this built, the focus for the two media executives is driving more adoption. Vilusic says it’s starting to see the shift across to its self-service offering, Ignition, but knows there’s a way to go. 

“We’re getting into decent percentage and we’ll set KPIs over the next year, which is going to flip the majority of transaction to happen through that. But we want to empower people to provide strategic value, not operational value. We want to shine in our strategic contribution and that’s where our Fuse offering really comes into its own,” he says. 

Meanwhile, the media sales percentage increase in the first half 2024 report is indicative of success for both Vilusic and Kyefulumya. 

“Our revenue was going down in the media business for a few years, and we’ve turned that train around and it’s now going north. Our half-year results tell the story of how we’re transforming the media business with these five components,” Kyefulumya said. 

Vilusic sees more juice to squeeze even as he recognises Carsales will need to start building its next 3-5-year plan over the next 12 months. 

“This current plan is definitely working; now is the stage where we can’t just sit and wait for the next thing,” he says. “We are moving into the AI economy. With that, we’re seeing all of these former economies [digital economy, then platform economy] merging into one. The latest layer of that onion is the AI economy and that will certainly play a part in our plans.”