Digital Marketing

In a previous blog I asked the question, "What will be the buzz at NADA 2010?" Now that the show is over, I have some observations to share.

NADA 2010 was a combination of "sizzle and steak." The show included new technologies, and beautiful vehicle models. There were brick and mortar enhancements for dealers to compete on a retail level. Aftermarket Row provided ways to ramp up fixed operations and used vehicle sales for gaining the dealership "orphaned owners." 

The atmosphere was more intimate, featuring a smaller and scaled back exhibit hall. Speaking with attendees and exhibitors, the more personal access and "to-the-point" conversations was a refreshing change from the bloated, party-filled NADAs of the past. The market continues to figure out the digital purchase journey of shoppers to buyers. Dealers and their agencies are working to be more effective at spending automotive marketing and advertising money for better shopper and lead conversion. The magic behind the curtain of behavioral targeting is becoming less of a mystery. And we're all starting to connect the dots of offline and online (digital marketing) activity to help suppliers and dealers figure out ad placement and content when delivering a marketing message that is based on consumer needs.

Overall, the integration of data into dealership portals and dashboards is accelerating and is finally beginning to show that all of this information can be placed into a singular business intelligence tool for making better data-driven decisions.

So, I’ll join the rest of the attendees I’ve spoken with, who enjoyed a new, and different NADA and say that 2010 will be another challenging year. Those that were here will come back with the tools and knowledge to take advantage of a slow, but progressively improving vehicle sales year in 2010.

Posted by Brad Korner, Director - Client Sales & Service, Automotive Retail Solutions, Polk (02.18.2010)

With the market tsunamis of 2008 and 2009, dealers and OEMs who have weathered the storm are viewing their business and markets differently than the earlier "roaring 2000s."

When new vehicle sales shrink from 17 million new units to 10.5 million, the overall cost structure of the retail channel and consumer spending compresses at the same rate. Dealerships, agencies, lead providers and CRM companies must adjust their automotive marketing efforts and budgets to address the new volumes of new and used vehicle sales, parts & service and Finance & Insurance penetration. The pure numbers from a customer traffic and transaction point are stressful, and the resources and data used in the past will not result in the same level of sales renewals and fixed operations retention.

So, how do dealers and marketers acquire new customers at a cost which is acceptable to their P&L requirements? They use Budget Prospecting to acquire new customers from the pool of orphan owners, first-time buyers, non-traditional loyalists and social network influencers.

Having the opportunity to attend conferences like Driving Sales and J.D. Power has provided me with a number of insights into the dynamics of our new retail environment and how to transition to the dynamics of budget prospecting.

Digital marketing, media spread and prospect targeting are now sciences which take constant feeding and balancing for customer retention. The constantly changing population base requires retailing efforts to focus on a combination of targeting points to effectively reach new prospects with pertinent and valuable offers, advice, community support and service to earn, retain and grow a business relationship through social networking.

To survive as one of 15,000 franchised dealers, the discipline of building prospects outside of your DMS name file and CRM marketing database requires significant effort for capturing the consumers at the bottom of the funnel. Also critical are consumers in the "lost zone" of orphan owners, first-time buyers and consumers who can be influenced on where to service their vehicles or purchase their next new or used vehicle.

All of this must be done with a cost per acquisition that meets the financial and ROI requirements of dealers, agencies and OEMs. Those who balance lead acquisition with "budget prospecting" will achieve long term growth strategies for their market and brand(s). They will continue to adapt and adjust to this changing and challenging market by growing sales, profit and market share. All of these "scorecard" evaluation points are keys to the health and ongoing transition and growth of the automotive retail channel.

Posted by Brad Korner, Director - Client Sales & Service, Automotive Retail Solutions, Polk (12.3.2009)

Everywhere you look, you'll find blogs and articles buzzing about the topic of Social Media. Meanwhile the topic of "email" is getting pushed into the digital marketing archives. Yet, many of my customers keep asking me about emails. "What do you see as some of the best practices for email marketing?" "Is email better than social media for direct marketing?" "Why are so many of my emails not going through to the intended recipient?" It sounds to me that email isn't anywhere near dead. I think savvy business professionals realize that email is still great for parts and service reminders, promoting dialogue with loyal customers and targeting special offers. So, to all of you who asked, I offer the following:

Your email is always with you
Smartphone usage has skyrocketed - especially for executives and decision-makers. Do that receiver a favor and send emails that are viewable, with links that go to Smartphone friendly websites, so that your messages have more of an opportunity of being read. Therefore, graphically rich emails with links to content rich sites may not be the best option for increasing read rates.

Social media and email are integrated
Email is one of the best ways to share your social network profiles via signature tagging. Mashable gives us a guide to the five best tools to use for aggregating networks and offering solutions to "unclutter" your signature line with all of those networks. Additionally, using social media is one of the best ways to share emails. "Share - to - social" can increase email reach by more than 24%, as noted in Media Post - so don't see them as separate, but linked technologies that can help integrate your message through multiple platforms.

Email volume is rising
The Email Stat Center displays some amazing usage statistics that blew my mind. The one that surprised me the most was that of the 70% of people that have multiple email accounts, they will receive nearly 600 emails per week! Wow! This indicates a need to be able to get through the clutter. Plus, those users are probably extremely sophisticated. Therefore, we must be cognizant of subject lines, copy, and offers so that our emails are opened. The caveat to this positive centers around managing that volume properly. Many email professionals believe that overly frequent messaging can get you designated as a spammer. Before beginning a campaign, look into the best practices of your industry and email marketing to ensure you're viewed as the quality organization you want to portray.

My personal recommendation to accomplish the former are:

• Never include the name of the person in the subject line. You will be labeled a spammer if you do this.
• Get to the point. If I'm reading 600 emails a week, I don't have the time to sift through an ambiguous communication to get to the offer.
• Give the receiver a chance to dialogue with your organization. One of the most important lessons of social media is that people want to dialogue and be a part of a larger conversation.
• Targeting for the commercial vehicle market is paramount. After you develop your target market, get out there and communicate! Happy emailing.

Posted by Therran Oliphant, Account Representative, Commercial Vehicle Truck Group, Polk (11.18.2009)

In September, I attended a session at the Interactive Advertising Bureau MIXX Conference entitled "The End of Digital Marketing." In his presentation, Google President Nikesh Arora opined that digital marketing is not a discipline unto itself, but simply a part of marketing in general. The same principle can be applied to online automotive marketing. I propose that the auto market as a whole consists of both online and offline elements, neither of which will do the job alone.

This was the theme of our presentation last week at the Polk Industry Outlook Summit 2009. I was fortunate to be joined at the podium by Julie Enzweiler, Automotive Research Director at the Nielsen Company. Our premise is simple: Automotive marketers must incorporate both online and offline research, targeting and measurement to form an effective overall marketing strategy. The pieces come together to form a complete puzzle, as illustrated below.

Take, for example, assessing the target audience and competitive set for a new vehicle being launched. We can measure the accuracy of the competitive group by examining online new vehicle shopping activity – who is shopping the vehicle, what are their demographics, and where are they located? Does this align with the intended target?

Further, what vehicles are being cross-shopped online, and does this correlate with offline conquesting & defection behavior? We took a look at the Honda Insight as an example and confirmed that there is, in fact, strong alignment between online and offline behavior.

*Source: Nielsen MegaPanel, Jan-Jul 2009;
**Polk Manufacturer Loyalty Excelerator™, Jan–Jul 2009

So, what does this mean for automotive marketers? Well, for starters, make sure to integrate online and offline intelligence to develop and refine your marketing plans throughout the vehicle lifecycle. There is still a tendency to create organizational silos that treat online and offline marketing as completely separate disciplines; this can severely impede your ability to leverage information across the organization.

In today's complex automotive market, we believe that companies that can break down organizational barriers and integrate information from all available sources, both online and offline, will be most successful.

On a scale of 1-10, with 1 meaning "completely separated, no integration" and 10 meaning "fully integrated, no silos," between the online and offline disciplines, how would you rate your company and why?

Inquiring minds want to know.

P.S. If you would like a copy of the presentation from our customer summit, send your company rating and contact information to me at paula_skier@polk.com.

Posted by Paula Skier, Polk, Director of Digital Product Strategy (11.2.2009)

If you're a dealer, here's a tip for you: read the book by Chris Brogan and Julien Smith, "Trust Agents". If you're wondering about improving your company's image and how to influence customers via online methods, you will find it highly useful. This is not just theory-- it's a "meat and potatoes get-stuff-done" book! It's about building a better reputation with your constituents in the context of the web and social media tools.

Am I getting kick-backs on this book? Nope. It just stood out to me after co-presenting last week at the DrivingSales Executive Summit that there is so much auto retailers can do to build better relationships with their customers. Here's a compelling fact: In research done by our firm, U.S. auto brands representing over 52% of all personal sales only saw a combined dealer loyalty rate of 30% in 2008. That means 7 out of 10 owners at a dealership for these top brands went to another store. One area I see that baffles many of us is the lost sales in the service bays among dealers...in a time when owners are holding their vehicles for an average of 9 months longer (comparing the last 6 years). Can you say, "How can I get more parts and service revenue?"

Okay. I'm not trying to be a "Monday Morning Quarterback" but there are really some good digital marketing and social media ideas out there to help retail sales build momentum. Just read the book. You won't be sorry.

Posted by Lonnie Miller, Director of Industry Analysis, Polk (10.22.2009)

I keep getting told that traditional automotive marketing doesn't work anymore, "Paid search is the only thing you need. Without paid search, companies will experience corporate Armageddon and cease to exist."

"Social media! Without social media, your company will be spurned and become an outcast from society!"

"PURLS! You gotta use personal URLs or no one will listen to anything you say and you will be ignored and disowned by your family!"

Wow! Is there any hope?

Look, digital marketing works, but it doesn't guarantee success. And, the traditional methods—direct mail, radio, TV and outdoor— still work too, but there is no guarantee there either. There are so many factors involved: your budget, message, creative, offer, list/audience, demand for your product and service—it all plays a role.

The bottom line is that you need to understand your audience as best you can. Find out what buttons to push and then create a strong integrated campaign utilizing a variety of tactics that fit your need and your budget. But stop telling me that a banner ad will solve all my problems. It has to be the right banner ad, on the right site... if there is a right site for your message.

So go ahead, experiment. Have fun. Just make sure you have the right message for your audience. And if that doesn’t work, try yelling real loud... that will at least get you some attention.

Posted by Jeffrey Stone, Senior Marketing Specialist, Polk (10.21.2009)

With the rash of cost-cutting in the face of current automotive industry challenges, I feel like something should be said on behalf of digital investment. It’s no secret that the number of dealerships will drop dramatically this year and beyond. I think it's obvious that the economy has had a fairly dramatic effect on consumers, too.  But it’s more than just declining sales. The economy is also impacting how consumers are shopping for their next new car or truck.

If consumers are replacing vehicles at a slower rate, this means they are taking more time than ever to research their next purchase. Odds are they are staying away from the actual point of sale to avoid the perceived risk of being trapped by dealers desperate to get a sale. Instead, consumers are doing vehicle research via the Internet from the comfort of their homes.

With consumers spending more time online gathering information, digital marketing has become significantly more important. Yet I get the sense that some manufacturers and dealer groups are considering reductions in their online investment (e.g., less content and fewer features). 

Closing even one brick and mortar store is a difficult decision. The decision to cut digital investment is not one that should be taken lightly, either. In this difficult time, carmakers and retailers should make every effort to maintain or even increase their investment in their customers' online experience. Otherwise, they risk losing sales to dealers who realize the power and potential of digital marketing.

Posted by Derek Vertin, Product Strategist, Polk (07.22.2009)

Last week, I attended the BlueKai Data Boot Camp, a digital marketing event in New York.  The focus was on behavioral targeting (using previous internet behavior to target relevant advertising messages to users). This field is expanding in new and exciting ways. Some companies are using social networks to find more people who “look” like the target market.  Others have figured out how to bridge offline consumer data to the internet for use in online targeting.

But one thing they all had in common was a major focus on identifying “in market” consumers, in vertical markets such as travel, financial services and automotive. Given the state of the economy, particularly the automotive industry challenges, it’s not surprising that OEMs and dealers are focusing on lower-funnel targeting. However, it got me thinking, “What about the rest of the purchase funnel?” Obviously, a major purchase like a car is not an impulse decision. If you are already comparing vehicles and estimating payments, chances are you’ve narrowed down your consideration to a small group of vehicle makes or models. So if a brand you’re not considering pays to serve an ad to you, are they wasting their money?

For decades, marketers have relied on traditional media such as TV and print for brand advertising. Why isn’t the internet – which supports a much higher degree of targeting without sacrificing reach – being widely used for branding in the same way? I suspect it’s because there is no easy way to measure the impact of branding campaigns. After all, they are not designed to drive specific, immediate behaviors like clicking on a display ad or performing a search. This makes it harder to determine ROI and justify marketing spend in the current budget-squeezed auto industry. But as the market begins to turn around, I predict we’ll see a dramatic increase in online brand advertising. What do you think?

Posted by Paula Skier, Director of Digital Product Strategy, Polk (07.17.2009)