Data companies help automakers reduce digital guessing games
Automakers have fewer reasons to wonder whether online marketing blitzes are translating to sales.
With an estimated 90 percent of people starting the car-buying process online, data companies are providing automakers and their advertising/marketing agencies with an arsenal of information to help them capture those consumers and better understand their behavior.
Ford's Team Detroit is embracing this new science. During a recent Web campaign, the marketing agency used online marketing data to target consumers likely to own competing models.
Team Detroit zoomed in on those audiences online through display advertisements and videos with DLX Auto audience segmentation data from digital marketing company Datalogix.
Datalogix, which has an exclusive targeting partnership with R.L. Polk, is able to create audience targeting segments based on "historic vehicle buying" patterns using vehicle registration data from Polk as its core data set, said Joe Kyriakoza, general manager of DLX Automotive. Polk collects vehicle registrations in all 50 states.
Datalogix, of Westminster, Colo., enables clients to tailor online marketing campaigns for specific audiences.
Marketing teams purchase audience segments from the Datalogix database -- ranging from year-end buyers to people interested in hybrid vehicles -- in order to reach them online through advertisements and track what they are buying through its DLX ROI closed-loop process. The segments are built from offline purchase history, demographic and financial data, according to the company.
Meanwhile, Korrelate, a New York City measurement firm, also uses Polk registration data to determine whether online marketing leads to sales.
The stakes are high.
Automakers are switching millions of dollars in traditional TV and print advertising spending to their digital or online budgets. General Motors, for example, increased Internet display advertising by 6 percent in 2011 while trimming network TV spending by more than $50 million, according to Advertising Age, an affiliate of Automotive News.
So firms like Datalogix and Korrelate play a key role by answering the burning question for automotive marketing teams: Are people buying cars after seeing online ads?
Of the 320,000 households selected for the Ford conquest campaign, DLX Auto data showed a 13 percent lift in Ford sales vs. competitive models, with Fusion and Focus sales rising 35 percent. To see how effective the campaign was in reeling in buyers, Datalogix measured 85 percent of its 5.7 million display media impressions and compared Ford's sales performance to competitors within the targeted audience.
Jason Harper, senior vice president of Team Detroit's marketing science unit, said the agency turned to DLX Auto because of its ability to "map the online consumer with the offline consumer."
Datalogix, which tripled its automotive revenues in 2012, offers a database of more than 110 million households.
"They're bridging that gap between my experience online as an individual and then tracking my purchasing behavior at a dealership," Harper said.
Datalogix and Korrelate let automakers know whether Web surfers are heading to dealerships after being exposed to online campaigns, while audience data from Datalogix and intent data company BlueKai provide opportunities to zero in on buyer segments during online marketing drives.
BluKai's intent data are created from specific actions people take online -- going to Cars.com or Autobytel, for example -- that show a "high level" of intent to purchase a vehicle, said Sherene Hilal, BluKai's manager of market strategy.
BlueKai also helps process data that automakers can use to cater to online visitors on their Web sites. If an auto company knows what type of consumer is perusing vehicles on its Web site, it can direct certain models at them during their visits.
Harper touted DLX Auto's closed-loop marketing.
"We come up with a media campaign and determine the audience we want to target with it. Then we use Datalogix to help us target that audience online," Harper said. "This would aid the execution of the media plan from a targeting perspective. If we are using closed loop, that would then help us with the performance measurement of the campaign."
Marketing company Universal McCann also took advantage of Datalogix closed-loop data this year during a summer clearance online campaign for Chrysler.
Preliminary numbers show "pretty significant" sales increases, said Jamila Price, Tier 2 senior portfolio manager for Universal McCann, in an interview.
"We wanted to find a way to not only target in-market shoppers but also find a way to build momentum around that messaging," Price said. "We're very excited about some of the results we're starting to see."
About a dozen automakers have used DLX Auto since it was introduced three years ago and Kyriakoza hopes to work with the rest of them before the end of 2013. Toyota and Chrysler dealership groups have used it as well.
"One of the ongoing struggles with automotive marketing is being able to understand whether what you're doing is leading to vehicle sales," Kyriakoza said. "What we really offer is the ability to do that at a really large scale."
Digital advertising company Rocket Fuel used closed-loop data from Korrelate during several online campaigns for BMW.
Korrelate data revealed that 40 percent of purchases of new BMWs in North America in the second quarter of 2012 were influenced by Rocket Fuel advertisements.
"That's an amazing result," said Richard Frankel, president of Rocket Fuel, during an October presentation at the J.D. Power Automotive Marketing Roundtable in Las Vegas. "What we know is we're interacting with the right people, we're hitting the right target and they're buying cars."
Korrelate measures offline car sales for online consumers who saw Web campaigns with its O2O (Online-Offline) data.
Korrelate has worked with nine automakers either directly or indirectly through advertising agencies, said CEO Daniel Jaye.
"We measure not only the ads. We also measure how the manufacturer's Web site activity correlates to purchasing behavior," Jaye said. "We've seen that in the month of a purchase, only 30 to 40 percent of consumers are actually visiting manufacturer's Web sites, which is a surprise to many people."
DLX Auto offers more than 200 audience segments for automakers to reach prospective buyers online.
"We can develop audiences who are two years into a purchase versus people who are five years into a vehicle purchase. We can give manufacturers the options to say, 'OK, I want to reach people who aren't ready to buy but are near-market and might be thinking of it soon,'" Kyriakoza said. "That's really the first of its kind in the online space. Most online automotive marketing is focused on people who are shopping, [but] that's a small sliver of the universe."
Once automakers launch an online marketing campaign, DLX Auto then determines whether the targeted audience is responding.
DLX Auto helped Team Detroit craft an online media plan that went beyond the typical behavioral marketing strategy that tracks people while car shopping online only by tapping into their buying histories.
"I'm very pleased with the results," Harper said. "I'll just say that as the agency is becoming more advanced in our media planning, we're taking advantage of all this great consumer behavioral data."
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