Connected cars will drive automotive marketing into the digital age
Digital advertising spend within the automotive industry has historically been minimal. In fact, despite overall digital advertising spend increasing by 17.5%, the automotive sector, according to an Internet Advertising Bureau report, has been decreasing its level of investment. But this could be about to change as a result of connected cars, or vehicles that have connectivity to the internet.
Automotive branding campaigns span a variety of online and offline media including display ads, billboards and TV ads, but the same cannot be said for leads and conversions in the automotive market, which take place almost exclusively offline.
Dealerships have a degree of visibility over potential buyers through their test-drive bookings, but these still only account for between 2% and 5% of all sales. The vast majority of purchases are the result of walk-ins to dealerships and follow a long purchase cycle. This leaves automotive brands with little insight into their audiences, and more specifically how they respond to digital advertising.
A secondary factor, which is more specific to the industry, is the tiered structure of automotive marketing. Tier One is the automotive brand itself, and it often has little control over the advertising activities of Tier Two (regional dealerships) and Tier Three (local dealerships). Marketing in these dealerships can often be managed by individual media agencies, who may not collaborate or share data effectively.
Today, especially with digital, most automotive advertisers look at online test-drive requests and other similar online proxies as the key metrics against which they assess the performance of their advertising since these metrics are in their control and trackable at the user level. Yet given how poorly these proxies substitute for actual car sales, most automotive advertisers cannot quantify the exact contribution of their media touchpoints to actual car purchases.
So how will connected cars revolutionise automotive advertising? If a connected car interface acts like other devices – such as smartphones, tablets or PCs – brands will be able to incentivise consumers to identify themselves and share data through sign-on environments and branded apps, which will allow advertisers to directly connect their media touchpoints all the way to the actual point of purchase for 100% of their car sales (assuming every car is a connected car).
Combining the ability to measure all the way to the point of sale with cross-channel attribution technology will equip automotive advertisers with their holy grail – the ability to precisely quantify how their digital media is driving incremental vehicle purchases – and to finally move away from last-touch based measurement and inaccurate metrics. Connected cars will also offer automotive brand marketers a more accurate picture of the purchasing cycle, and the ability to gain an in-depth picture of the makeup and diversity of their audiences.
The potential for automotive marketers using connected cars is huge and if the manufacturers and dealers can begin to collaborate more openly, they stand to gain substantially. By understanding how the advertising efforts of each tier impact the conversion goals of other tiers, marketers can take a holistic view of their marketing campaigns. They can also gain a greater perspective on the media efforts that have the most effect, removing any unnecessary duplication.
Increased visibility and control over marketing channels together with an in-depth understanding of the automotive conversion path will revolutionise the digital media strategies of big brands such as Audi, BMW and Volkswagen. As connected cars provide brands with greater insight into their customers, and the way they interact online, we expect a shift in automotive advertising budget away from offline media, where it is currently heavily weighted, and a long overdue drive towards digital media.
By Adit Abhyankar executive director at Visual IQ. Follow him on Twitter @itsadit.
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