Integrating Liveupdate Administrator with SEP Manager

Dears,

From what I understand from the LUA guide is that I will configure distribution center (which will be my SEPM) but when I try to add the SEPM details it says connection failed also, from what I understand is that I need to configure IIS server on the SEPM and I added a new website with a virtual directory inside it called "AVUpdates", please find the two attached screenshots:

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Thanks in Advance