Car advertising business Auto Trader today dismissed a new online rival from the Sunday Times as “niche”, but admitted it should have spent more on marketing in the face of mounting competition.
Zillah Byng-Maddick, interim chief executive of parent company Trader Media Group, said the Sunday Times’ Driving.co.uk is “not really having much impact” since its launch in October.
“I think they’ve got maybe 40,000 [vehicles] in stock. We’ve got 410,000. We’re generating 400 times as many page views compared to Driving.co.uk.”
Byng-Maddick added that Auto Trader, Britain’s biggest car website with 10.9 million users, also had double the stock of eBay.
But she has upped annual marketing spend by a “significant” amount to £15 million. “Last year, we didn’t spend as much and I think that was wrong,” explained Byng-Maddick, who stepped up from chief financial officer in September when chief executive John King abruptly quit after five years.
The marketing is focusing on Auto Trader’s “comprehensiveness” and 35-year history — a dig at eBay and Driving. Trader is owned by Apax Partners and Guardian Media Group, parent company of the loss-making Guardian newspaper, which relies on the car business for income.
Apax and GMG took out £200 million last year through a refinancing, leaving Trader with net debt of £637 million. Underlying earnings rose 1% to £70.7 million in the six months to September. Pre-tax profits were £16.9 million.
Underlying revenues fell 3.7% to £127.7 million, largely because of declines in print. Digital generated 90% of profit, although the print magazine is still profitable, despite circulation halving to 40,000 in a year.
Byng-Maddick offered no clue about when the owners would appoint a permanent chief executive.
She warned the wider market is tough. The number of used cars aged one to three years old for sale is close to a low of 5.5 million compared with 7.4 million in 2007. “We think the market’s at the bottom,” she said.