Edmunds.com’s Car Stock Exchange Off to a Running Start
March 13, 2008

By Dale Buss

Edmunds.com’s new Car Stock Exchange already is exhibiting some “natural resonance” with online automotive enthusiasts, which “suggests that it may catch on” for the long term, said CEO Jeremy Anwyl.

Less than two weeks after its official launch, the Car Stock Exchange — where consumers invest virtually in the sales performance of their favorite vehicles — “is running ahead of what we thought,” said Anwyl.

“There’s already a lot of buzz building that we didn’t necessarily anticipate right away. There are some small but rabidly loyal audiences (of car enthusiasts) that are already chattering about this thing quite a bit.”

But more than simply entertaining visitors to Edmunds.com, Anwyl noted, Car Stock Exchange also is expected to serve as a valuable new treasure trove of data and opinions which the company will, in turn, pass on to the industry.

“This will tell us what the people who really matter are thinking,” he said. “These are the influencers. It’s one thing to look at what individual car buyers believe, but we’re tapping into the opinions of people who might also each influence the purchase of 100 vehicles a year by other people.”

It Was Bound to Happen
The Car Stock Exchange is a first-of-its-kind game Anwyl readily calls “sort of like fantasy baseball — but for cars.” Its time clearly has come, given that Web visitors already could “purchase” shares virtually in the box-office performance of actors, in the electability of presidential candidates, and in any of a number of other “stocks” on Internet “exchanges” devoted to specific consumer goods and other interests.

Players simply sign up for a free Car Stock Exchange (CSX) account, receive $1 million in virtual CSX money, then “purchase” stocks for car models based on their expectations of how well the cars will sell during their first six months at dealerships. Players are expected and encouraged to buy and sell stocks as they hear auto-industry news and reviews of the vehicles that shift their expectations.

A real-time ticker across the top of the page reveals the current CSX value of individual car models. Edmunds.com also is featuring online discussions relevant to the game on its CarSpace.com site.

If a player’s predictions match real-word sales, the player’s net worth in the game (and, presumably, reputation as a car expert) will grow. Monthly prizes are awarded to players with the biggest gains. For this month, the prize will be a Nintendo Wii video-game system. As Edmunds.com sees how consumers play and feed back about the game, it will tweak CSX, so the game is likely to go in phases — and then start all over again a time or two, Anwyl said.

Anwyl said it was crucial for Edmunds.com to keep the game simple both to hook players and to make the data generated by CSX valuable. “It has to be engaging, so people enjoy it and come back,” he said. “And the things that make the game work from an opinion-tracking perspective are that you need experts, and you need them to participate often.”

Rarefied Territory
When Edmunds.com came up with the idea for CSX about a year ago, it was seen as simply a way to provide a game for consumers on the site. As a way to monetize the effort, the company considered possibilities such as selling sponsorships and ads. “It was all kind of boring,” Anwyl recalled.

“Then we came up with the twist that, yes, the game is interesting — but the real value in it is the data that comes out of people playing the game,” he said. “That’s when it became a potential game-changer from an industry perspective. The thing that’s most provocative to me is that the data that comes out of this has never been available before, especially about how (enthusiasts’) opinions of vehicles change over time.”

Anwyl pointed to the influence of New Yorker columnist James Surowiecki’s book, "The Wisdom of Crowds," as an influence in the development of the game.

“There are studies that purport to track opinions, but I’m always skeptical of what people tell you about how they feel about things. If you set it up correctly, behavior — changes in how people act — are more revealing than any survey data.” Thus, Anwyl believes the actual decisions consumers make within CSX are a more accurate reflection than survey data of what they think about specific vehicles.

Edmunds.com’s Inside Line site alone has about 3.5 million visitors, each of whom is a potential CSX player, and the company’s sites overall enjoy about 16 million visitors monthly.

The game also has been getting a lot of mention on tuners’ Web sites, Internet message boards and other enthusiast locations online. “Really, this is a way for people to establish bragging rights among their peer group” of car buffs, Anwyl said. “That seems to be a bigger motivator than the prizes, even though the prizes are tangible.”

Statistically Significant
But Anwyl stressed Edmunds.com doesn’t require a huge quantity of CSX players for the data it generates to be valuable because their ranks represent such a highly distilled audience of knowledgeable and motivated car enthusiasts — the kind of people who both know their stuff and are tapped by other consumers for their opinions.

“You don’t need millions of these people playing the game to get the statistics that you need,” he said.

Edmunds.com will provide data about purchase consideration and other trends concerning individual vehicles to OEMs, the value of which, Anwyl said, will go way beyond what consumers simply say in surveys.

“We have tons of data about people who are in the process of shopping for a car,” he said, “so this is sort of a wrapper for that. It will help us understand how opinions change in response to various marketing activities. We have people talking to the car companies about this every week anyway; we’ll just add (CSX) to the mix.

“The more you understand about our audience, it’s unavoidably attractive.”

Robin Hanson, a George Mason University associate professor of economics who consulted on the creation of the exchange, agreed: “If CSX can attract enough players who know cars well, it may well become the best forecast of new-car-model success.”

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