Auto Trader shrugs off new rival but admits it should have spent more on marketing


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The Independent Online

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’ 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”

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.