Nonprofit, nonpartisan journalism. Supported by readers.


More on the Star Tribune-CarSoup deal: how much more revenue?

The Strib currently reaps about $10 million a year from the battered auto business, and its current website doesn’t even show up on media audits.

I know; why make such a big deal out of an ad deal? Because it takes money to pay all those journalists.

So, here’s what else I’ve learned:

Turns out the Strib’s just-announced partnership isn’t its first; until early 2008, it had a deal with According to Strib spokesman Ben Taylor, “They dropped us and other newspapers largely because it is more profitable for them to do it themselves after they have built their brand locally through the partnership. The contract simply ran out, and they elected not to renew. They then hired away some of our sales staff and went their own way.”


Article continues after advertisement

That forced the Strib to strike out on its own. It didn’t go well. According to the March-April 2009 Media Audit, doesn’t even show up among the six local auto classified sites listed.

Meanwhile, CarSoup is first, with 14.8 percent of a fractured market — nearly nine times as much as, and 10 percentage points ahead of (They all have to watch out for Craigslist, which has 9.9 percent of the Twin Cities.)

While CarSoup is winning the local search wars, owner Larry Cuneo knows there’s a lot more to get. Especially valuable was the Strib’s print component — yes, print! — where CarSoup had no partner. (Fox9 has long added the TV component.) But he also acknowledges the Strib’s website, which Media Audit says 40.2 percent of Twin Citians view each month, will put his site even more in people’s minds.

(Media Audit’s figure may be overstated; the Strib’s most recent circulation audit, for the six months ending in September, puts market penetration at 17.5 percent. That’s within the Twin Cities “designated market area,” or DMA, in a given 30 days. Combined print/web penetration is 53 percent; print covers a seven-day period.)

“CarSoup gets about 250,000 uniques a month” in the Twin Cities, Cuneo says. It’s a “vertical” — auto only, and deep. claims six million overall — it’s wide. While many of those uniques aren’t in the Twin Cities (likely drive-by users who come via search engines), that’s OK to CarSoup, which is now in 80 of the nation’s 217 “designated market areas” and expanding all the time.

Though the new regime closed the deal, Cuneo says he’s been talking to the Strib for years, probably since the divorce was apparent.

So how much will the Strib gain financially?

Taylor pegs the paper’s current annual automotive business at $10 million. Compared to the old days, that’s a heart-stoppingly small number (in bankruptcy filings, the Strib forecast total ad sales of $141 million this year). But Chapter 11 re-set the paper’s cost structure, and the most important number is revenue going forward. Taylor characterizes the initial upside in the “hundreds of thousands to us.”

It’s not nothing, but for now, not a game-changer. It’s one piece of a bigger puzzle, but it gives the Strib and CarSoup the most comprehensive package to take to dealers, who do the vast majority of the advertising. “Our goal is to be the dominant force,” Cuneo says.

Article continues after advertisement

In my initial post, I noted the Milwaukee Journal-Sentinel’s parent company reported lower revenues after signing with CarSoup. Cuneo says the deals are different; the Journal-Sentinel has a franchise deal, and are scrambling to establish a new site after also being dropped by in January. In contrast, Minneapolis is well-established. The Strib deal, Taylor says, is a revenue share, “with the share based on what we sell.” The paper plans to deploy six reps and three support staff, and they’ll be the bulk of CarSoup’s local sales force, though Cuneo says he’ll still have employees working with the Strib folks.