Are classifieds fated, by definition, to be “dumb” all-you-can-eat listings? Or can certain categories be remade as performance-based listings a la Google that bring best matches to the top, offering higher revenue in return for a better match and conversion?
That’s the question posed by Vast.com, a San Francisco-based company working with “inventory” classifieds: autos, real estate and travel. The company, which is the focus of a Kelsey Marketplaces report, currently has deals with AOL, Overstock, Orbitz’s Away, the L.A. Times and others.
Vast was launched in 2005 by Kevin Laws, a former exec with Epinions. He has since been joined by former execs from Zillow, Trilogy, PayPal and Coremetrics. The basic idea is that “leads on the Internet suck,” says Laws. But if listings that are already in the inventory can be better matched with user needs, they’re much more effective.
“We’re in the business of making transactions, as opposed to just making the information available,” and forcing users to browse screen after screen of listings, says Laws. The key is “to understand the meta-data on an item. That is where all our technology goes. For example, we can see that a particular vehicle is priced $2,000 lower compared to similar cars — and therefore should be the one recommended to the user.”
The performance-based metrics, in particular, allow companies to really focus on strategic marketing. “An auto dealer can use our system to get more SUV leads,” if they feel like they have too many SUVs on the lot, says Laws. “They can say they need 23 more leads by the end of the month.”
Laws is confident that a large percentage of the existing subscription-based model will switch over to performance-based pricing, as auto dealers, apartment managers and other inventory-based categories strive for maximum efficiency in their marketing. “Half of subscription (based pricing) goes away in five years,” he predicts.