Dealership marketing: Navigating automotive advertising in a post-pandemic world

The dynamics of dealership marketing are evolving faster than ever before. From the loss of third-party tracking “cookies” on the internet to the rise of digital-retail technologies to cybercrime, dealers face a growing array of challenges. To provide some clarity, Automotive News asked three industry insiders – John DeMarco from Experian Automotive, Rosie O’Meara from GroundTruth and Tara Rego from Spectrum Reach – for their takes on various aspects of automotive marketing in a post-pandemic world.

Q: How and why have dealers’ marketing strategies changed in the wake of the pandemic?

Rosie O’Meara: While most consumers are getting back to normal activities and shopping habits, auto marketers face some ongoing challenges as the consumer market continues to reset itself. After nearly two years of car-buying hibernation, marketing starts with understanding current buying intent. Like many other industries, auto marketers are experiencing a shift in how consumers research and buy cars. More specifically, post-pandemic auto buyers expect options for how and when they buy a car.

For auto marketers, this means adjusting marketing strategies to reach shoppers with the right message at every step of the research and buying process. How marketers reach each of these audiences continues to evolve in the wake of the pandemic. But with contextual data like foot traffic, marketers can reach audiences that have recently visited a dealership, then align their audience targeting with their customers’ preferences, such as auto brands, the places they visit and demographic insights.

Tara Rego: As market conditions evolved on almost a daily basis, we saw our automotive dealer clients becoming nimbler with their messaging and targeting strategies. This required them to have stronger, iterative relationships with their creative agencies and media providers. Among our customers, the dealerships that succeeded the most maintained a consistent presence in front of their customers, and promoted their strengths. For them this was an opportunity to grow their market share by highlighting their differentiators. They leveraged data to better understand who their priority customers were and how, when, and where to best reach them. Effective messaging strategies that we have seen included an increased focus on the customer experience (e.g., positioning the dealership as a friendly and convenient place to do business), an increased emphasis on service, and buying used cars. More recently, we have seen campaigns focus on recruitment, as well as build-to-order capabilities.

John DeMarco: Because of the pandemic, digital retailing now is an industry staple and marketing strategies reflect this shift. Whether it’s pre-qualifying customers for a loan or end-to-end vehicle shopping or buying online, dealers have adapted quickly to ensure they digitally provide consumers with what they’re looking for while communicating effectively along their journey. As digital retailing has increased, dealers have become more agile in their marketing, tailoring it to consumers’ varying levels of digital preferences. For example, some consumers want to start the purchase process online and finish in the dealership. In contrast, others want to complete the entire process online, down to delivery straight to their driveway. Understanding consumer preferences is paramount to effective marketing, especially in today’s environment.

Q: How are the smartest dealers allocating their marketing spend these days?

Rego: We have seen successful dealers taking a data-driven approach that is more holistic and includes both brand-building and performance-based media. They are using a combination of traditional and streaming TV, online display and video, and search-engine marketing to address the awareness, consideration, and purchase stages of the funnel. The optimal balance between longer term/upper-funnel and shorter term/lower-funnel advertising efforts is 60%/40%, according to the June 2021 Nielsen Brand Resonance Report.

DeMarco: Because of the pandemic-induced inventory shortages, many dealers have altered their marketing spend. Some wonder if it’s even worth spending any money on marketing since they’re lately faced with more demand than supply. In short, the answer is yes. Marketing is much more than just showcasing and selling a product – it’s an opportunity to build lifelong relationships and customer loyalty. As a result, dealers are shifting to long-term marketing strategies and focusing on messaging around services beyond vehicle purchases, such as maintenance and repair. By allocating their marketing spend to topics that drive engagement and revenue, dealers can keep their dealership top-of-mind and maintain brand recognition and enhanced loyalty for years to come.

Q: With so much data flowing into dealerships these days – measuring every step of the sales process – how can dealers make sure they’re set up to learn from and act on their digital-marketing performance data?

DeMarco: At the end of the day, data takes the guesswork out of marketing by identifying the most valuable audiences and what communications channels they prefer. Especially in today’s competitive market, it’s important to know who marketers are looking to reach and then ensure they’re reaching them with the right medium. One of the best ways to identify the right audience is to layer third-party data onto a dealership’s first-party data, obtained from a CRM system. For example, while dealers know their current customers, third-party data from a trusted provider offers additional insights into customer lifestyles and preferences, which enables more informed and powerful marketing strategies.

Rego: Creating a holistic data strategy framework based on specific business objectives will make sure the entire business is aligned. This creates focus and a better ability to mine through data to develop actionable insights. We also recommend working with a partner that can efficiently leverage data in a privacy focused manner.

O’Meara: It all starts with defining the key performance indicators that are important to reaching and attracting auto shoppers. For example, while digital-ad impressions can provide some insight into the reach of an ad, they don’t give auto marketers the complete picture of buying intent. Understanding incremental visitation to dealerships can provide critical insights into not only post-ad exposure, but also how those campaigns impact car sales. Those same insights then can help auto marketers lower acquisition costs by improving targeting tactics and segmenting audiences, based on past purchases, and determine which consumers are in the market for a car now. For auto marketers that are investing in connected TV, post-campaign visitation insights can improve video-ad performance and target reach.

Q: Apple already is blocking third-party ad tracking and Google Chrome will end support for third-party “cookies” by 2023. These tools have been a huge part of how dealers market to shoppers. How can they contend with this change?

Rego: At Spectrum Reach, we help dealers target auto intenders in a privacy-focused manner by leveraging our aggregated and de-identified first-party data. And, through our deterministic multiscreen attribution solutions, dealers can see how their campaigns are performing on every screen. Dealers should look for these standards when working with any media partner.

DeMarco: The elimination of cookies has resulted in numerous marketing innovations. Consumers use a lot of devices every day – think smartphones, laptops, TVs, etc. – so marketers need to be able to tie all these data points together and create a unified identity to reach them effectively. Cookies were a big part of that. But new digital identifiers now serve as cookie alternatives. To navigate these changes and shift to new identifiers, it’s important to work with a trusted third-party marketer that’s fluent in the latest technologies and knows how to effectively use these new identifiers. These partners should work as an extension of a dealership’s team to create the most effective in-market audiences, using a variety of identifiers and tools.

Q: As more ad dollars have shifted to digital marketing in the last decade, digital ad fraud has become a real threat. How much is at stake with ad fraud and how can dealers guard against it?

O’Meara: According to some industry reports, there’ll be up to $23 billion in ad-fraud losses in the United States this year. From a performance perspective, the effect on brands goes beyond viewability and click-fraud. Longer-term, brand reputation – which influences customer loyalty – is a significant concern for many marketers. In many cases, they aren’t even aware that ad fraud is impacting their campaigns. The good news is that as an industry, there is a high priority on mitigating ad fraud and there are several things that auto marketers can do to preserve and keep their brands safe.

The best defense against digital ad fraud starts with being diligent about the solution providers you use to develop your campaigns. For starters, marketing partners should care about the integrity of their branding as much as you do about yours. So, auto marketers should find out what technology and certifications solution their partners have in place.

Rego: A Juniper Research study from Q1 of this year reports that the value of digital advertising spend lost to fraud will reach $68 billion globally in 2022. Here are a few recommendations to help ensure advertising dollars aren’t wasted:

Pick trustworthy media partners. Brand safety is the highest priority. TAG certification from the Trustworthy Accountability Group ensures that a company is committed to fighting cybercrime and has established industry best practices.

Verify. Don’t allow partners to evaluate their own work. Use third parties such as Oracle Moat. Investigate when the CPM is too good to be true.

Demand transparency. Don’t trust someone who just offers “new ad tech” or who says they are “high quality” or have “premium inventory”. Ask to understand how the technology works, what makes their inventory “premium”, where your ads are running and who will see them.

Q: From a dealership’s point of view, is there still a case for traditional mass-market advertising in today’s world?

DeMarco: There’s always a case for mass marketing if it meets a dealer’s goals. If a marketer’s goal is to increase awareness of their dealership and its offerings, then mass marketing should be a part of the strategy. But if the goal is to move metal immediately, and sell specific vehicles, then a more focused campaign for a specific audience may be more effective at giving dealers immediate impact for their marketing spend. Marketers have a deep toolbox of solutions these days, and that includes mass marketing. Before jumping into any campaign, dealers need to have clear goals and objectives. From there, they can select the most impactful tactics, whether it’s mass marketing or a campaign focused on one specific demographic of car buyers in their area.

O’Meara: If you’re an auto dealer and you want to create meaningful engagement with potential car buyers and lapsed customers, a majority of your marketing budget should go toward performance-driven campaigns. This is especially important for auto marketers with multiple locations. That’s because where and when they reach specific communities within their geographic locations becomes important to generating visitation to the right dealerships. So, while mass-market campaigns will help sustain a high level of awareness for dealerships, location-based marketing campaigns will help them grow their business by generating actual sales leads. This is true whether they’re trying to drive overall sales, promote new models or generate foot traffic during seasonal promotions.

Rego: Absolutely. Traditional mass-market advertising will continue to be a part of an effective marketing mix. Successful dealers don’t focus on choosing one platform over another. They look at a full-funnel solution with multiscreen advertising. This can include traditional/linear TV, streaming TV, display and online video, search, and local news. Adding streaming TV to linear campaigns has proven to be more effective for our clients by doubling frequency and extending reach by 28% on average. Conversely, adding Linear TV to a streaming campaign extends reach by 363%, according to Spectrum Reach audience measurement campaign data from Q4 2020.

ABOUT THE PANELISTS

John DeMarco is the senior vice president of Experian’s automotive business unit, responsible for driving revenue growth for the unit. He manages the sales team, which includes oversight of sales strategy, operational plans, and execution of those plans.

Rosie O’Meara is the chief revenue officer at GroundTruth, a leading location-based marketing and ad technology company. She leads top-line growth across all company solutions, with direct oversight of GroundTruth’s sales and marketing functions.

Tara Rego is the director, automotive sales & strategy at Spectrum Reach, the advertising sales business of Charter Communications. She is responsible for building partnerships with OEMs, auto agencies and dealers, both large and small, to help them convert big data into usable data. Tara has over 23 years of experience in the automotive industry.