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AutoTrader, the car classifieds advertiser that began life as a regional paper three decades ago, now makes a whopping nine tenths of its money online – but that doesn’t mean it’s about to kill off its print heritage, according to website director Dominic Collins.
Making a profit of over £100 million from its 335,000 online car listings, 100 million monthly searches and related advertiser services, AutoTrader.co.uk is one of the few traditional classifieds businesses to have successfully migrated to the web, while much of the sector lays in ruins.
Print declines last year canceled out 25 percent higher annual digital gains for the title, but, unlike rival Exchange & Mart, which shut off the presses in January: “We still see our publishing business as a profitable asset,” Collins told paidContent:UK, saying the paper sells 100,000 copies a week.
“Print, given its own strategy, will continue to serve us for some time to come. Will there be a print product in 50 years time? Who knows, but we’ll probably be the last to go. I’m not saying we’ve hit the bottom of our print declines, but we’re actually seeing some fairly positive news. But most, if not all, of the real chunky growth we see in our five-year plan is going to be digital.”
— Why is AutoTrader.co.uk profiting from small ads where many newspapers have failed?: “We were bold about online early,” says Collins, who joined from Sky in July 2008 and who last month became co-chair of the Association of Online Publishers. “A lot of large media businesses put their foot on the head on digital ambition because they saw it as cannibalising their business. AutoTrader didn’t do that because classifieds were core to us.”
The site launched in 1996 as a “thirteenth region” alongside 12 local print editions, offering free ads at first. But AutoTrader.co.uk, now the dominant part of Trader Media Group, charges individual advertisers from £6 a week, and between £9 and £40 a week to commercial dealers, for whom it powers some 5,500 dealer websites. It also offers premium search placement, sells on-site ads, claiming 1.3 billion monthly impressions, and syndicates its search platform to portals like MSN, Sky, Yahoo (NSDQ: YHOO), Virgin Media (NSDQ: VMED) and Top Gear.
— But the future is about retention: “Peaking at 10 million unique users, I don’t think we’re going to be able to grow that massively – we’re not going to get to 20 million users on a motoring vertical website. There’s some headroom around mobile, but it is about deepening as opposed to getting more people. We’ve amassed 10 million visitors and we could be doing more with them.”
A site redesign which went live this week is aiming to show off more content to drive stickiness and search. AutoTrader.co.uk is syndicating editorial from Planet F1, while an eight-strong in-house editorial team is authoring expert car guides and poppy celeb features in a World Of Cars section (Cheryl Cole’s Audi R8 is for sale on-site, Steven Gerrard’s Range Rover made for a nice feature, too).
Some readers are expressing shock at the new direction. But the walls of AutoTrader.co.uk’s Wimbledon office are covered with a year’s worth of printed redesign mock-ups, and he is intent on beating even Top Gear‘s relentless rise as a top online car content destination. In fact, AutoTrader.co.uk sees big traffic spikes immediately following the BBC show’s transmission, as TV viewers hit the site to buy the cars they see, Collins says.
After a redesign built partly by agencies, he’s looking at bringing IT operations more in-house for an effort to power print ads from online listings, adding 20 new staff to the current team of over 50.
— Hasn’t the recession killed car sales?: Collins acknowledges new-car ads are down 20 percent and used by four percent; on-site listings are down to 335,000 from a peak of 400,000. But the site continues to take an influx of ads from company fleets, who sell as second-hand new cars they bought two years earlier. “We’re successful because we help drive traffic to dealers. The car industry is down on its peak, for sure, but the main concern we see is availability of quality stock.”
— A sale or diversification?: Guardian Media Group sold 49.9 percent of Trader Media Group to Apax Partners in 2007, retaining the majority but using any profit to pay off debt until such time as it sells TMG. “Apax has an exit in mind at some point in the future,” Collins says. But AutoTrader has “no aspiration whatsoever” to diversify in to other classified sectors like recruitment or property, instead steering only toward the autos vertical.
Disclosure: Our publisher ContentNext is a wholly owned subsidiary of Guardian News & Media.