Auto Trader test drives new advertising model

Patel: Has anyone done native to the level we have in this environment? No’
Patel: Has anyone done native to the level we have in this environment? No’

An alternative take on native is the latest digital innovation from the market-leading classifieds website.

Against the backdrop of the London evening skyline, Auto Trader is hosting its annual get-together for media agencies.

Among the greenery of the Sky Garden, atop the Walkie-Talkie, members of the sales team are clutching iPads to show the different ad products available for car brands.

This month, Auto Trader is introducing  native ads. Rakesh Patel, the commercial director for digital, believes that Auto Trader offers something different to other media owners because Britain’s biggest second-hand car classifieds website is mainly about ads.

The native ads, which will appear among the classifieds (where users are likely to be already interested in a brand), will be offered initially to car manufacturers, rather than Auto Trader’s core audience of second-hand car dealerships.

Patel says: "Our modus operandi is classified. Has anyone done native to the level we have in this environment? No." During beta-testing, the native ads have been up to 12 times more responsive than standard listings, he says.

Adapting to the changing needs of advertisers and consumers has served Auto Trader well over the past decade-and-a-half. It is a rare example of a legacy print brand that has transitioned into a digital market leader. As Auto Trader likes to point out, it had a website before Google.

The numbers speak for themselves. Auto Trader has 420,000 cars for sale at any one time and 43 million people visit the site every month.

The City expects revenues to hit £280 million for the year to March 2016 and the share price has jumped by more than half since Auto Trader floated on the stock market a year ago, giving it a value of close to £4 billion.

It’s a remarkable transformation for a publisher that used to sell 400,000 print copies in its heyday in 2000. By the time Auto Trader closed the print title in 2013, when circulation had dropped to 27,000, well over 90 per cent of profits were already coming from online and mobile.

The company has undergone significant cultural change since then, Patel explains. Auto Trader consolidated its offices, leaving two in London and Manchester, and created a new vibe with creativity at its core. The London office in King’s Cross, with Minis attached to the walls, feels like a hip agency.

Auto Trader has developed in other ways. It began targeting car-makers rather than just car dealerships in 2014; it has invested in data; and it has overhauled the leadership by recruiting digital-minded people, including Patel and Chris Ward, the digital advertising director. Both have previously worked at Microsoft.

"When we arrived, what blew me away was the sophistication of the data side of our business in the core classified world," Patel says. "I say that after seven-and-a-half-years at Microsoft. We came into this with a treasure trove of different assets to play with, data being one of them." 

One innovation has been to analyse the car-buying cycle and find ways of targeting prospective customers when they’re not looking to buy  by using tools such as valuations, reviews and part exchange.

Patel and Ward also introduced programmatic trading, and have tried to maintain a reputation for "premium programmatic" inventory. Although the company does "rely on a third-party eco-system" to sell programmatically, Patel insists: "We don’t have just any network buying from us."

Richard Morris, the managing director of Vizuem, whose clients include BMW, praises Auto Trader’s "progressive attitude" towards programmatic and willingness to embrace "bespoke content solutions". He says: "Auto Trader remains the pre-eminent motoring brand, thanks to the way it uses data and a clearly defined vision of how to evolve with changing media habits."

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