Since launching 44 years ago, Auto Trader has become a trusted household name as well as a modern marketplace for new digital retailers. With 10 million transactions each year, they’re consistently driving change in how consumers are shopping for cars online by improving efficiencies in the market in a way that benefits consumers, retailers and manufacturers alike. Our Brand Partnership Manager, Darren Harsley caught up with Nick King, Insight and Market Research Director at Auto Trader to find out more about their plans for the future and how they have grown their success over the years.
DH: Hi Nick, thank you very much for taking the time to speak with me today. Tell us a bit about yourself, your background and your career at Auto Trader.
NK: Thanks, Darren. My name is Nick King, I’m the Insights and Market Research Director at Auto Trader. I’ve been in marketing and research for over 30 years. I’m a consumer psychologist, I’ve been studying psychology forever, basically. I’m fascinated by people, technology, cars, and music.
I’ve almost always worked in marketing research – I’ve been at Auto Trader for nearly 15 years. Before that, I was actually in one of the first indie bands in the UK! I played guitar and my band almost had a hit in the American charts, we’d signed to Polydor, almost made it, but didn’t so we sort of failed and so I got out of music and back into marketing and advertising and ended up at Carat, a big media planning agency. I was Research Director, working on lots of big blue-chip companies, advising them on their digital marketing strategies and really enjoyed it.
One of my customers was Auto Trader and they approached me to join. I certainly didn’t have an interview. In fact, I had four years of interviews by just presenting to them all the time. I initially joined as Business Intelligence Director back in 2007, when the internet was small in comparison to how it is today, and Auto Trader was a magazine. At that point, we were printing almost 400,000 copies a week, the third biggest circulating magazine in the UK – Radio Times, TV Times, then Auto Trader. My role was to come in to help us grow the digital side of the business and understand it.
At that point, our customers didn’t want to advertise online because why bother? We have a magazine!
As we all know, of course, circulation declined massively, and the internet took off. I then spent the next three or four years tracking what people were doing online, how they were interacting and how we can make life easier for our customers.
Auto Trader is the biggest marketplace in the UK for cars, new and used, not just used. It’s new as well! We know that people don’t just look for a used car or a new car, they just look for “a car”. Any car you want, we can help you find. Prior to COVID, we were up to nearly 500,000 cars on our marketplace.
Because of COVID, we had 3 months of no one building anything. Factories stopped, which is completely unheard of, which means no new cars were being made or taken into the system. Rental companies were not buying cars, fleets were not buying cars. There are around 10 million cars sold in the UK, every year, roughly 8 million used, 2 million new, almost every year for the last 10/15 years. That’s a huge number, but roughly a million didn’t arrive and that’s had a massive impact. We now have much more demand than there is supply and it’s that basic economic rule. For the first time ever, we’re seeing used car prices increase! Traditionally you buy a car and you watch the value decrease.
We’re in an odd place, so my role at Auto Trader is to help our customers understand the world we’re going through and be more successful. It’s almost oddly a philanthropic role because Auto Trader can’t really exist without the retailers who advertise with us. If they go bust, we don’t have a business, so we need to help them understand the world is changing, keep up with the times, keep up with this new, engaged online audience and succeed.
DH: Going on to the actual consumer behaviours that have changed significantly over the last 12 to 18 months, how have Auto Trader adapted to the new normal?
NK: So, like everyone, we are all working from home. We have two offices. Manchester is our head office, right near where the Hacienda was. We also have our Kings Cross office in London as well.
One of the brilliant things about our Manchester office, like in any office, you bump into someone, and you interact. I do miss the interaction and the collaboration so we’re probably moving to a hybrid solution like everyone’s talking about.
The other thing we did during COVID was taking the decision to not charge our customers to advertise. We gave our advertising away for free because they were shut.
It seemed the right thing to do. We lost money, they lost money, but it was the right thing to do. We did it for three months and then we did it again in the second lockdown in January. It was much appreciated by our customers because that’s what you do when you’re a partner. We don’t just want to be a supplier; we want to be a partner.
“We gave our advertising away for free because our customers were shut. It seemed the right thing to do.”
DH: Going on to the brands that have significantly grown over the last year such as Cazoo and Cinch. What does Auto Trader do differently to give you the edge when challenger and disruptive brands enter the market?
NK: Good question. We’re obviously always aware of competitors coming in and these new threats and we must try and keep on the front foot.
Competition is a good thing. You don’t want to be the only player in town because then what are you fighting against? It’s good to have the worry that we need to up our game and keep on it.
Cazoo, Cinch, Carzam, all of these online retailers, essentially that’s what they are, and we know that digital retail is growing, so we are working with systems to try and make our marketplace the place where you can do everything you need to do to help your customer buy that car.
Cazoo, are also our biggest customer. They advertise all their cars on Auto Trader so they are a competitor and threat, but they are also our customers and we love them. They offer a great service, and we are working all the time to come up with new products so you can ultimately find your car in Auto Trader, reserve it online, pay for it, get the finance sorted, that’s all coming. Get a guaranteed part exchange for your car so it’s easy for you, and then have the car delivered to you at home if you want to. We’re not trying to eradicate the dealer in any way, we just want to help the dealer sell faster so it’s inclusive, not exclusive.
We don’t want to own the customer and have it all ourselves. There’s a clear role for the retailer. We are just helping enable that.
DH: Continuing with the trends that we’ve seen over the last 12 to 18 months, global sales of electric cars have grown by 43%. We’ve seen brands such as Ford, VW and Volvo, all plan to sell electric cars only by 2030.
DH: As soon as we see electric vehicles become cost-effective compared to petrol and diesel cars and charging becomes easier and cheaper, do you feel we’ll see a significant shift to electric models?
NK: That’s another great question and it’s on everyone’s lips.
Yes, you sort of hit the nail on the head there, at the moment there is not a price parity between Electric vehicles (EV’s) and internal combustion engines. When you see them at first, as a manufacturer retail price, electric vehicles are seemingly a lot more expensive. When you look at them as a monthly payment, those numbers do get closer to parity. What we need to do is convince the vast majority of the audience of car buyers, that it’s okay, you’re safe, you’re going to be okay to buy an electric vehicle because for 90 years, they’ve driven internal combustion engine cars.
Almost 100 years ago, Henry Ford launched a Model T. And when it launched, it was the equivalent of $27/28,000 in 2021 money, so it was a really expensive toy.
In 1909, when it came out, circa that time, you couldn’t have PCP, PCH, lease deals or finance. You had to pay cash, so it was the preserve of the wealthy minority, the enthusiasts!
Just 5 to 7 years later, when they embraced mass production, the price came down dramatically, the equivalent of $8,000 so everyone could begin to afford one of those and then, and by 1926 it got down to the equivalent of $4000. There is a comparison to the launch of cars with the launch of electric vehicles. The first Tesla that landed here in 2012 was around £54,000 pounds so bought by the wealthy. You can still now buy a Tesla, which will cost you circa £140,000, but you can actually buy a model 3 for around £40,000. I think there are now around 70 models you can choose from.
There are now fabulous companies in China who make cars that look a bit like a Tesla but have a 700 mile range and it’s going to be £40,000. So, as with Model T, it went from the preserve of just the wealthy enthusiasts to the masses. It went from 8,000 owners to 8 million owners in 20 years!
We need to get that kind of jump. We’ve only really started thinking about this in 2012. We’ve got till 2030 and it’s now 2021 so we might do it.
In fact, people didn’t really start thinking about it till just a couple of years ago. I remembered about 2017/2018 when the government announced it would be 2040 and we thought that’s 22 years, that’s fine. Then suddenly it was 2035 and then bang! now it’s 2030 so you’re right. The infrastructure is not in place, but it’s coming. Superfast charging is coming soon, as with your laptop, your phone, your computer, everything.
We will hopefully see an increase in capacity and the speed of charging will also increase, and the price will come down when we make more of them.
The massive fly in the ointment, unfortunately, has been COVID. There’s a world shortage of chips/microprocessors to go into cars. What’s happened during COVID, because the car factories were shut, the companies are still making their microprocessors, but they have redirected those manufacturing products and sent them off to computers, and to hospitals and to phone companies so they’ve been routed to other areas. The car manufacturers are saying we can’t even produce as many cars as we want even though there’s this massive demand!
We’ve seen it in the commercial vehicle market too. We’ve seen huge growth in lots of small vans required for the DPD deliveries, Amazon and within the grocer sector which of course has taken off with COVID.
You can traditionally buy a Renault Kangoo or Ford Transit with a Sat Nav, and a lot of people buy these vans because they have certain apps in them, where now there isn’t a chip to provide that Sat Nav and we’ve seen some of the manufacturers actually taking those products out of the vehicle.
COVID has sped up demand in cars as people are reluctant to use public transport. A lot of people have saved a lot more money. The Bank of England says roughly 150 billion pounds have been saved because we haven’t been able to go to the pub, a restaurant or on holiday so we’ve got more money in our pocket. People are interested, there is a demand but people can’t actually buy anything.
It’s always a good time to buy a car, but it will cost you more but now, it is a brilliant time to sell a car.
DH: Going onto the marketing that you do at Auto Trader, I’ve seen you’ve previously worked with Taylor Herring regarding your car vending machine campaign and also Karmarama to focus on your new-car offerings. How do the insights you gather help to focus your marketing material?
NK: Well, that’s another great question. We obviously don’t just produce advertising campaigns based on a whim. It’s based on what we hear our customers telling us.
We ask our audience by doing surveys online. When we’re thinking about a campaign, we’re not going to give the game away by saying, do you think having two people talking about swinging and dangling keys at each other is going to be funny? They wouldn’t say anything like that although that’s a hugely successful campaign.
We subtly talk about what is it that’s interesting to you about buying cars today? What do you want? Do you want to find something unique, as exciting as finding your perfect partner? We’ll subtly start to assess what the audience is thinking about and then work with award-winning creatives to come up with campaigns.
We then test the campaigns, and if the response goes well, they then go live so we do have an ‘always on’ process.
“When we ask our audience, ‘what do you think about Auto Trader?’ what’s lovely is we have a very high trust rating.”
We like to always be visible so, at the moment, we’re still sponsoring Dave at the weekends. Of course, we don’t have endless pockets, so we must spend wisely.
We have a brand that’s been around for 44 years, so it’s very well etched in people’s minds. When we ask our audience, ‘what do you think about Auto Trader?’ what’s lovely is we have a very high trust rating. It’s up towards 80% because we’ve been around a long time.
The slight issue is people trust us, so if they see a car advertised on Auto Trader, they assume it’s advertised by us and if something goes wrong, they blame us.
We are just the marketplace. We have to do everything we can to make you feel safe so we’ll have reviews, options of chat to the dealer, text, website etc. Every detail you can possibly think about if you need to know who that dealer is and how safe they are. It’s part of the journey.
DH: Having worked at Carat for over three years and being part of the agency world, what’s your experience been like working with agencies? Have there been positives and negatives?
NK: Here’s the thing. I started my career in advertising, I worked for big agencies, right when I left Loughborough and I just thought, if you’re in marketing, you’ve got to work for an agency.
What you find at the agency is you’re working with multiple clients and you never know that much because you’re limited and never go that deep into every core element.
As soon as I joined Auto Trader, I thought I knew loads about the company and really I had no clue. My first 90 days was a real learning process. I really thought I was going to stay here for a couple of years and go back to media. That was my plan. I’m very lucky though. I mean, I’ve worked with brilliant people and it’s a lovely culture. We have our values, and we all helped create them so we all believe in them. They’re things like being humble, reliable, determined, curious, community-minded…These are things that essentially make up a nice person.
“We have our values, and we all helped create them so we all believe in them.”
DH: Are there any marketing strategies from brands that you admire right now? Are there any that you think really hit the nail on the head?
NK: Well, I’ve been really impressed with the current Mini campaign. We need to get people buying, talking about electric vehicles. There was a misconception that people only buy electric cars because they’re ‘worthy’. One thing everyone says about electric cars is they’re really good fun, because you get this instant acceleration and it’s like wow, and there’s no gears.
So Mini’s campaign is just this Mini E driving around and people grinning, people chucking funny coloured snowballs. It just makes you go, wow, that was really fun. There’s nothing worthy or eco-friendly about that. Although of course, it is very green. It makes it look fun so I thought that was a very brave way of introducing a very expensive car and they’re brilliant fun to drive. Very good company.
DH: If you could change anything about the marketing industry, what would it be and why?
NK: People looking down on marketers. I’ve been practicing in the profession for 35 years and I’m still learning. I learn every day. I’m trying to absorb all the time. And there is a bit of “oh it’s just marketing”, so there’s a bit of a lack of respect.
It’s not seen as powerful a degree in comparison to say accountancy or engineering. I have a nephew, who works at Essence in a senior role. I helped get him his first job at Diffinity which became Carat years ago. He’s done really well. He’s the Head of Ad operations and he’s very bright. He takes his job really seriously and he manages mega millions of pounds worth of inventory every day.
I think we deserve more credit for the jobs we do.
DH: And finally, what would you say is your greatest achievement?
NK: Well, personally, I’ve just had my silver wedding with my rock, Lyn. Can’t believe she has put up with me for 25 years! And I’ve got two lovely stepdaughters and five wonderful grandchildren. That’s my personal great achievement.
In business, it’s setting up Dealer Education.
10 years ago, we were just a marketplace. Our salespeople would go around, and not really offer any insights to our customers other than “buy more of our products please.”
We couldn’t really show them why, so I started doing masterclasses to try and give the customer something back.
I got four customers in a room, and I said, “I will give you six things you can do today, which will improve your response without spending any more money” and they were obvious things. E.g. put more pictures on because if you just put three pictures on, is that really telling the story of the car? Describe it well. Answer the phone. Really basic things like this.
I mystery shopped them all before they turned up. I used a burner phone and a fake Hotmail and when they all sat in the room, I said, “How quickly would you respond if someone wanted a car?” and they said, “within an hour”. Well, I mystery shopped you and you still haven’t responded to me and it was three days ago! It wasn’t designed to catch them out just to illustrate how we could improve.
I then did another one. I ended up doing 200 sessions across 18 months to about 2000 dealers. That has now become our marketing channel.
We now have a Dealer Education channel with videos, masterclasses, webinars with a team I helped build. We have a whole site and it’s all designed to help our partners.
We’ve also analysed the difference between dealers that have been to my sessions, versus a similar-sized dealer who hasn’t.
What’s the difference in their performance 3, 6, 9 months further on? I got a team to have a look at the data and you can see there’s a correlation.
Those people that came to our sessions churned less, spent more, and were more successful. I’m very proud of the model and the team.
DH: I can understand why you would be proud of that, it is an amazing achievement. Thanks for sitting down with me Nick, it has been brilliant to chat.
Darren Harsley is a Brand Partnerships Manager at GO!, connecting Automotive brands with agencies that are the right fit for them. You can learn more about what we do at GO! and how it works here, or get in touch with darren any time at firstname.lastname@example.org.