As new car sales flatten following a 2016 peak of 17.5 million units sold, automakers are pursuing myriad strategies to grow revenues and profits. Strategic focuses are shifting to SUV, truck, and premium vehicle sales; embedding electrified, connected, and self-driving capabilities to appeal to technologically minded consumers; and innovating entirely new business models, such as all-in-one vehicle subscriptions and vehicle-on-demand services.
However, there remains an untapped opportunity to capture market share by improving the complex, time-consuming car-buying experience. A recent study found that the car-buying journey can take about 12 weeks, with 10 hours spent on online research and four hours spent at a dealership. During this time, car buyers can have as many as 900 digital touch points. By comparison, the average buyer makes just one dealership visit, down from a historical high of four visits.
To help the automotive industry capitalize on this online shift, Adobe’s Digital Strategy Group identified three ways brands can engage buyers earlier to win their business. (CMO.com is owned by Adobe.)
1. Use Digital Data To Improve Relevancy And Return On Ad Spend
As brand advertisers, car brands have never had more opportunity to engage the right audiences. Digital advertising spend in the automotive industry has been growing annually at 13.6% since 2014 and now accounts for 12.8% of total automotive ad spend. Yet, even though the industry is now the second-largest spender on paid media in the U.S., performance is lacking. In fact, benchmarks show that paid search and paid display account for 90% of total digital ad spend but drive just 12.5% of site visits, with the majority of traffic resulting from direct site visits and organic search.
Furthermore, according to Adobe Digital Insights (ADI), which analyzes anonymized data within the Adobe Experience Cloud, display bounce rates in automotive (62%) are higher than those of other industries with similarly large spend, such as retail (43%). Suboptimal targeting and segmentation strategies may be serving irrelevant ads to consumers, and site experiences may be inconsistent with advertising messages. Automakers need to use the wealth of data available (behavioral, partner, and demographic data and look-alike models) with innovative assembly and delivery technologies to create more relevant messages for their buyers’ needs.
Underpinning the shifting advertising landscape is the trend of ad buying via automated and programmatic platforms, which will account for 82% of all digital display ad buying in 2018. Overall, digital leaders are able to execute ad buys in a more direct manner by investing in in-house marketing talent and programmatic technologies to increase transparency of media performance. Automakers can also gain greater control over their audiences by bringing their segmentation capabilities in-house and combining their first-party prospect and customer data with second-party data partnerships and third-party data subscriptions. These combined capabilities will improve media ROI, reduce wasted ad spend, and deliver more relevant experiences for customers.
2. Use Personalization To Drive Quality Engagement That Will Accelerate Leads To Dealers
As research for makes and models, inventory, and even financing shifts online, automakers must improve their capabilities to engage customers more effectively. ADI data (see Figure 1, below) shows that auto brand sites drive similar visitor engagement to those in the retail apparel industry when it comes to visit depth (page views per visit), but visitors on auto sites spend 67% more time per visit than they do on retail sites. This is even more pronounced for return visitors in auto, where the average visit duration of 15 minutes is 150% higher than in retail. Automakers can use personalization to accelerate these visits by serving up relevant content based on historical interests and preferences or predictive targeting.
Figure 1: Visitor engagement metrics in automotive vs. retail industry
Adobe’s Digital Strategy Group (DSG) assessed the sophistication of personalization tactics in automotive to find opportunities to enhance engagement. The methodology scores personalization along the stages of the prospect journey (see Figure 2, below) using a five-point scale ranging from nascent tactics (e.g., recognizing a visitor’s location) to cutting-edge tactics (e.g., tailoring online activity to real-world experiences). The findings indicate that auto brands are less mature in this area than digital leaders in retail, with opportunities for rapid advancement.
Figure 2: Examples of prospect journey personalization maturity across touch points
Even with small, cross-functional teams, organizations can make significant early strides toward personalization. According to DSG, only one automaker in the personalization study showed emerging tactics that targeted repeat visitors with personalized content based on previous interactions—a relatively simple use case to configure. And as car buyers switch between devices, more advanced capabilities would connect cross-device graphs and enable personalized experiences no matter how the visitor chooses to engage. Further, as customers are ready to visit dealerships, cutting-edge capabilities such as “clienteling” would allow dealer associates to tailor each visitor’s dealership experience using his or her online browsing data. Given the months-long decision journey, automakers must take every opportunity to help customers pick up where they left off and guide them closer to purchase.
3. Use Marketing Automation To Orchestrate Experiences And Deepen Relationships As Prospects Transition To Owners
Adobe’s personalization analysis also showed that emails from auto brands lack context and do not leverage site behavior data. In one example, emails from an auto brand were only used to verify with shoppers whether they were contacted by the dealer. In another, emails received after scheduling a test drive lacked an image of the prospect’s preferred vehicle or the time and location of the test drive.
Automakers are missing opportunities to build direct brand relationships with consumers via email and orchestrated content marketing to nurture consideration during long decision cycles. They can learn from adjacent digital leaders like Cars.com and Autotrader.com that leverage email to re-engage and connect with prospects, offering personalized product recommendations and guided content to inform their purchase decisions. Then, as prospects transition to owners, automakers can continue to use their knowledge of the consumer to personalize the journey through financing, onboarding, servicing, loyalty, and repurchase.
By optimizing segmentation and media spend, personalizing experiences across devices, and leveraging email and cross-channel automation, automakers can gain a holistic view of customers early in their car-buying journeys and create better experiences at every stage. This will help win market share in the short term and build lasting customer relationships for competitive advantage in a rapidly changing industry landscape.
Adobe’s Shashank Katare and Annie Lu also contributed to this article.