When Roger Dunbar took over as vice-president of marketing at AutoTrader.ca in 2012, after spending the previous 18 months at the genealogy company Ancestry.ca, the automotive classified company was in danger of seeing its own proud lineage come to an end.
For years a go-to source for automotive classifieds, its business had been steadily eroded by Kijiji and other online upstarts including Auto123.com and AutoCatch.com. It was, said Dunbar, “close to death.”
Apax Partners, the London based private equity firm that acquired Auto Trader parent Trader Corporation from Yellow Media for $745 million in 2011, converted nearly all of the company’s print products to online-only in 2013, retaining only an antique/collector-focused publication and a heavy truck publication as paper products.
The decision to compete solely in the crowded online space represented a significant gamble. At the time, said Dunbar, Kijiji’s monthly traffic was roughly three to four times greater than that of AutoTrader.ca.
Meanwhile, several years of marketing neglect had caused unaided awareness of AutoTrader.ca to plunge to around 22%, while aided awareness had tumbled to the low to mid 60s. “People thought we were a write-off,” said Dunbar.
One of his first moves upon arriving at Trader Corporation was to hire California media agency Ocean Media, which works with several digital businesses including Priceline.com, eHarmony.com, Overstock.com and Gilt Groupe.
Dunbar had worked with the agency while at Ancestry.ca, and was a fan of its data-based approach to media. It was an approach he believed would put AutoTrader.ca back on the road to profitability.
“You get a really good sense of what drives your business and the precise mix and effort required to optimize the opportunity over any given period of time,” explained Dunbar. “You get to the point where you can determine exactly the level of investment required and how to invest it across multiple media.”
In the nearly three years since it began working with Ocean Media, AutoTrader.ca has seen its traffic and unique visitors grow by between 18-20% a year, while unaided awareness currently sits in the mid-50s. Aided awareness of AutoTrader.ca has climbed into the 90s.
Earlier this year following a lengthy review, it selected Toronto agency Co-Op Advertising to oversee its advertising. Co-Op developed a new go-to-market strategy that positions AutoTrader.ca as a company that empowers both buyers and sellers. The company’s new positioning statement spells it out clearly: “Anyone can buy and sell cars like a pro with AutoTrader.ca.”
Meanwhile, the carefully calibrated allocation of its media dollars – all orchestrated by Ocean Media – has helped bring down the average cost-per-visit to the site down to eight cents from 48 cents.
With an estimated 45% of its total media investment going to TV (another 15% goes to paid search, 15% to display and the rest to a mix of out-of-home and radio), AutoTrader.ca and Ocean Media constantly scrutinize the multiple factors that go into a successful buy, including the creative message, the use of a 15 versus a 30-second spot, an ad’s placement within a cluster and the kind of programming environment that works best.
“It’s a constant effort over years to refine, refine, refine, to the point where you just squeeze out every bit of efficiency you possibly can,” said Dunbar. Today, he said, AutoTrader.ca can predict the outcome of a given media campaign in reaching a specific target audience with 94% accuracy.
While car sellers know intuitively that weather can impact sales, AutoTrader.ca constantly adjusts its spend levels to account for even the tiniest fluctuations. “If the forecast is going to be above 3 degrees in the winter, we’ll spend a little bit more money on media knowing that more and more people will be out,” said Dunbar.
On the flipside, media investment gets scaled back as the temperatures fall. “As it gets brutally cold, people are less inclined to shop for used cars simply because it’s a pain,” said Dunbar. “Nobody wants to buy a used car when there’s lots of salt on the road and you can’t have fun driving it.”
AutoTrader.ca is currently averaging 14 million visitors a month and 6 million unique visitors during peak periods. People spend an average of 10 minutes browsing the site.
While there are some differences between AutoTrader.ca and Kijiji – private sales, for example, represent only about 5% of AutoTrader’s total business – Dunbar said the company’s new strategy has rejuvenated the formerly flailing company.
“We’re absolutely a quality story in terms of quality of the traffic, quality of the conversion and [sales] leads to dealers, and we’ve closed the gap hugely in terms of quantity,” he said.
