Digital Marketing

Much to my disappointment (but not surprise), Porsche has declined to participate in Mini's road race challenge pitting the Cooper S against the 911 Carrera S at the Road Atlanta racetrack. But in keeping with its "little OEM that could" persona, Mini is not giving up.

Mini USA's president, Jim McDowell, has issued yet another personal challenge to Porsche Cars North America's CEO, Detlev von Platen. Take a look.

As the proposed race day (June 21) approaches, Mini has unleashed yet another creative, multi-channel automotive marketing tactic. They reportedly flew a banner plane over Porsche's Atlanta-based headquarters with a message reading, "Dear Porsche, Bring it. Love, Mini." If that's not enough, perhaps Porsche will be enticed by the new prizes being offered -- including a lifetime membership to the Salami of the Month Club. Or by the petition being circulated on Mini's official Facebook page, another social media coup.

I wouldn't bet on this race happening anytime soon, but it doesn't really matter. Mini is the winner for showing audacity, personality, and a great sense of humor. What a brand!

Posted by Paula Skier, Director, Strategy & Planning, Digital Marketing, Polk (06.15.2010)

Ok, here's an example of an OEM using multi-channel automotive marketing tactics to execute a campaign that’s got something for everyone. Even those like me, with no chance of buying a Mini or a Porsche in the foreseeable future, can't look away.

It's a road race challenge with something for everyone. Think of it: Mini Cooper vs. Porsche 911. It's got humor (just look at the cars next to each other and you can't help but smile).

It's got social appeal. Watch this YouTube video featuring Mini's Jim McDowell, a former Porsche employee, issuing a personal challenge to Porsche's Detlev von Platen. It's got a bit of marketing genius (no matter what happens, Mini wins with great publicity).  And it's a great example of using multi-channel tactics – from digital marketing like online video and social media, to traditional print ads in the NY Times – to execute a creative and appealing campaign that's spot on for a brand like Mini.

Porsche is reportedly considering the challenge, although they stand to lose big time if, against all odds, they get beaten on the track by Mini. Personally, I hope to see this race become a reality on June 21. Will it influence my future car buying decision? Probably not.  But if I were a viable target for either of these brands, you can bet this campaign would earn my consideration.

What do you think?

Posted by Paula Skier, Director, Strategy & Planning, Digital Marketing, Polk (06.10.2010)

Raise your hand if you recall the classic MTV video by the Buggles titled "Video Killed the Radio Star."

In an Ad Age article, they discuss a similar effect of obsolescence for the auto industry. In a nutshell, its premise is that cars are less relevant to younger Americans due to a higher level of attention on the "digital world." Possible translation: younger folks won't buy as many cars tomorrow. The article focuses only on the U.S. Did anyone tell them about booming markets like China?

With or without the Internet or other digital marketing assets in their face, Chinese consumers are buying autos. Between now and 2015, China's light vehicle auto market will be 17.5 million big based on our light vehicle forecast (and this is nearly 10 million more than what was selling there in 2008). China overtook the U.S. in national sales in 2009 and we are not seeing a change of ranking any time soon.

My point? While the U.S. economy supports a fantastically diverse consumer base (that still doesn't save as much as it probably should), autos are a fact of life to all age groups. AND you should look at other emerging nations before concluding that autos are absent from one's psyche. Tell me - how will tomorrow's youth pay for their technology fix? Despite fewer jobs for an inexperienced labor force, Gen-Y/Millenials/whatever demographic cohort you choose, they still have to earn money. And getting to a job takes wheels.

I'd argue a better video for tomorrow's auto market might be Sammy Hagar's classic "I Can't Drive 55." While younger buyers aren't the ones dropping coin on Mustangs, Porsches or even more affordable Chargers, speedy and trendy small cars like the Ford Fiesta will get younger buyers to the Apple store pretty fast...with gas money left over for their iAccessories.

Posted by Lonnie Miller, Vice President, Marketing & Industry Analysis, Polk (06.02.2010)

1. Write a letter to a soldier
2. Take it to a Ram dealer
3. Receive the free CD

The April YTD data shows that increased demand in Asia and the NAFTA region helped push global automotive sales.

• Automotive sales increased approximately 13% year-over-year in April due to several incentives and an improving economy
• All regions had a significant (double digits) sales increase for the first four months except for Central and Eastern Europe
• For the rest of the year, the growth rates are forecasted to decline based on the expiration of several scrappage programs in Western Europe and lower overall demand

Find out more by downloading the free Global Passenger Vehicle Market Monthly Forecast Report.

Click here for the latest analysis and predictions for select markets around the world. Polk's Global Automotive Forecasting Dashboards are updated regularly. Be sure to check back often to ensure you have the most updated information. You can also click here to subscribe to receive our Knowledge Center and Forecasting updates.

Posted by Ulrich Winzen, Chief Analyst, Polk, Essen, Germany (05.27.2010)

The 13 most popular luxury makes collectively are showing a 6% rise in retail registrations through the first two months of this year when compared to the same period a year ago. This increase is more than seven percentage points ahead of the entire U.S. retail industry, which is down 2% overall. While the luxury sales trends are encouraging, they are still down 31% versus two years ago before the economic recession. Four of the 13 luxury makes have enjoyed double-digit improvements compared to a year ago, with the luxury leader, Audi, far outpacing its nearest competitors. Audi's registrations are up almost 39%, more than double the improvement for luxury runner-up, Volvo. In fact, Audi's year-over-year gain is the greatest in the entire light vehicle industry, luxury or non-luxury.

Audi's success results mostly from the effective launches of its all-new or redesigned models in growth segments. The all-new Q5, which competes in the flourishing compact luxury crossover category, had just been launched a year ago, so its registrations this year were almost all incremental. The A5 and S5 were recently launched as well, and the A4 and S4 were redesigned for the 2009 model year.

The second and third best-performing luxury makes, Volvo and Lexus, also benefited from customer acceptance of new products. Volvo's all-new XC60, another small luxury crossover, gave Volvo more than 1,000 incremental registrations in two months. Lexus's hybrid-only HS250h, the only such model in the luxury arena, provided Lexus with almost 1,800 additional registrations.

At the other end of the luxury market, Saab, Jaguar, and Lincoln lag furthest behind their competitors. Saab is suffering from a well-publicized change in ownership that included a "near-death" experience. Jaguar has been operating for several months with virtually no availability of its flagship XJ model, while the all-new 2011 version ramps up, leaving it with just the XF and the low-volume XK. Lincoln is hurt by the discontinuation of the Mark LT pickup, a decline in volume of the aging Town Car, and an alarming drop in registrations of its bread-and-butter MKS and MKX models.

Posted by Tom Libby, PolkInsight Advisor, Polk (04.15.2010)

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.