Slumping Auto Sales Could Mean Less Ad Revenue For Black Sites

Could the near collapse of the U.S. automotive industry have a devastating impact on popular black Internet sites such as blackvoices.com or BET.com? Absolutely, says, Roosevelt Gist, owner of autonetwork.com.

Gist, one of the country’s leading African-American automotive journalists, says GM, Chrysler and other car manufacturers are drastically cutting back on the number of ads they place on multicultural and niche sites. That could mean rapidly decreasing revenue for many sites that have historically depended on the auto industry for a major share of their annual advertising sales.

No one is suggesting that any of the major black Internet sites is in danger of closing. However, the decline of the automotive industry is a story to be watched. On the print side, many black magazines are reeling from the impact of the recession, and virtually all of them are pointing to the loss of automotive ad dollars as one of their biggest challenges. Vibe magazine recently folded, and Johnson Publications, publisher of Ebony and Jet , has had to mortgage its historic building and parking garage to satisfy a $12.7 million debt to its printer.

On the digital side, RushmoreDrive.com, which billed itself as the world’s first black search engine, recently closed despite initial multimillion-dollar backing from Barry Diller’s InterActiveCorp. Insufficient advertising revenue was a key contributing factor to the site’s demise.

“In some instances, we are seeing multicultural budgets being cut by 100 percent,” Gist said. “There simply is no way in this economy to replace those dollars.”

Sites such as BET.com and Black Voices are far more established than Rushmore Drive was, and thus are in a better position to weather the loss of automotive advertising dollars. But across the board, all sites will experience some pain, Gist says.

The impact may not be immediately obvious to site visitors. However, the loss of significant automotive advertising revenue means some sites with expensive overhead may find it difficult to maintain current staffing levels or invest in innovation, marketing and promotion.

In some ways that may continue a leveling of the playing field in the black space, as smaller, more nimble blog and gossip sites continue to find it easier competing against corporate-backed sites such as Black Voices and BET.com. Homegrown gossip blog sites such as Young, Black and Fabulous (theybf.com) and ConcreteLoop.com have the advantage of a low cost structure and plenty of free, viral marketing. But Gist says every site may have to adjust to fewer dollars from the car companies.

“There isn’t anybody who is going to be spared,” he says. “How bad it hurts will depend on overhead. You’re in a better position if you don’t have a lot of overhead.”

Gist is already following his own advice. His autonetwork.com, which provides car buying information, is a full-time endeavor, but Gist employs just two people: one full-time webmaster and a part-time sales person. Gist got his start on the Web in 1994 after a successful career as a car salesman. While selling cars he noticed that African-American buyers often sought out African-American salespeople, feeling, in some cases that a black salesman would better relate to them and provide better customer service.

That led Gist to create a car buying service targeting African-Americans, and then autonetwork.com was launched in 1994. Traffic to the site is modest at best, with about 1,000 unique visitors a month, according to Compete.com. Leading black sites attract at least several hundred thousand unique visitors a month, but Gist isn’t trying to compete with them. He has excellent automotive content on the site, and is more interested in syndicating the content elsewhere rather than focus on making autonetwork.com a destination for car enthusiasts.

The site has a basic design with virtually none of the Web. 2.0 social media tools featured by most sites. What Gist does offer is video – lots of it. Because of his influence as a black automotive journalist the major car manufacturers are always inviting him to take part in press junkets. His site offers video interviews with virtually all the power brokers in the automotive industry, ranging from former GM CEO Rick Wagoner to former Mitsubishi boss Pierre Gagnon. There are also plenty of car reviews, with Gist narrating his personal observations about the latest models.

“I am not interested in all the social networking,” Gist says. “My website is an Internet automotive show. That’s what we do. Most of [the content] I generate myself when I go on ride and drives. I go to auto shows. I will do an Internet TV show where I call a car executive and we talk about aspects of the business. I’m not interested in having an area on the site where people come to post pictures of their Camaro.”

Ideally, Gist says, he wants to inform and empower consumers, and then drive them into the showrooms to make purchases. He says that is the only advertising model that will work as the car manufacturers continue to scrutinize their ad budgets.

“When we work with a client and demonstrate that we have moved that client’s product, then that client does not have a problem compensating me,” he says. “Everything has changed with the Web because of its tracking ability. Everybody now wants verification. They want to know, `What did this ad campaign do for me?’ “

About the Author
I have been knocking around the digital world since, well, a very long time. I can remember watching AP stories crawl across the screen on 300-baud dial-up during the early days of Compuserve and Prodigy. And yes, I vividly remember those pay-by-the-hour days on AOL. Since those early times I have held a variety of jobs in the interactive space, but I am probably best known for founding the original blackvoices.com. I raised $5 million in start-up money from Tribune Co. and hired a staff totaling nearly 40, with offices in L.A., Chicago and New York. Later, we sold the company to AOL, where it continues to thrive as one of the leaders in its category. Today I am still active in the space consulting with folks on a variety of projects.
See all posts by Barry Cooper.