Even in a traditional industry, like the automotive industry, the prevalence of digital marketing is increasing rapidly. Many vehicle manufacturers are working to try to understand the impact a generational shift is having on their marketing, and user experience as well. With regard to automotive marketing, there’s an important shift from monologue to dialogue.
Consumers no longer want to be told, for instance, about what car to buy and why; rather, they want to experience it on their own, and to have a say in that experience. This is something that has been tougher for OEMs to come round to. OEMs were, in fact, among the first to realise the importance of a digital presence, setting up websites and online tools to configure cars.
When it comes to marketing, vehicle manufacturers have historically focused all of their attention, money, investments and resources on the retail experience, with the online experience remaining more of an afterthought. Now, however, there is a growing realisation that the online experience needs to be the primary thought. This is primarily because consumers increasingly don’t want to experience dealerships the way OEMs tell them to, in order to buy a car.
One company that has been making significant advances in this area is Google. According to the company, technology and digital advancement are having a transformative effect on the vehicle shopping and purchase experience. This has resulted in a highly informed and empowered buyer.
The shift towards digital media has transformed how people shop for vehicles, says Meredith Guerriero, Google’s Global Head of Automotive. As potential consumers spend increasing periods of time researching, and a significant portion of that online, brands have the opportunity to reach and influence potential buyers.
In general, the perception has been that vehicle manufacturers have fallen behind when it comes to digital marketing of automotive brands, owing to the emphasis on offline marketing efforts. Guerriero, however, feels that the situation is, in fact, the opposite for most automotive brands. According to Google, automotive marketers continue to evolve and innovate their approach to engaging with consumers online.
“It’s no secret that several brands now identify the digital platform as a core pillar to their marketing strategy. As an example, as part of a multi-country European launch of the Captiva, Chevrolet wanted a centralised online destination to promote the vehicle, and used high profile YouTube celebrities to produce a collection of short films demonstrating the vehicle’s features,” said Guerriero during her keynote address at Automotive World’s Megatrends USA 2014 conference, held earlier this year.
Technology has well and truly started driving changes within the digital space, where vehicles are concerned. For instance, future generations are likely to never ask for, or even write down directions. Technology is making a mark on how automotive marketers can solve problems for consumers, and also start to integrate technology into what consumers are asking for.
“What if we used Google Maps to bring them into the dealership and they could start to experience this online without even having to get into their current car or public transportation to go check out a vehicle? What if we’re able to bring them into the vehicle? We can actually do this now and some of the OEMs are testing this out and I think this is the perfect showcasing of where you can also extend and take advantage of these trends,” said Guerriero.
There is also a change with regard to the purchasing process. The abundance of information within the digital space is showing consumers a different way to shop for vehicles. This paradigm shift, says Google, this is being driven by three areas – industry, media and consumer.
The first of these is the quality parity in the automotive industry. Earlier, there was a much larger quality gap within different models and brands. As a result, it was easier for buyers to say they would buy a particular brand, as they feel it would deliver much better quality than others. However, the quality paradigm is diminishing.
Secondly, there is unlimited access to information, empowering potential buyers. This access to information allows consumers to carry out all of their research online, whenever it is required. There is another factor with regard to the media factor, and that is social interactions – the online word of mouth.
According to Guerriero, this is almost like crowd sourcing, with consumers seeking out the wisdom of the crowds, and trying to understand everything that is available about the vehicle, as well as the dealerships.
The consumer is therefore more open-minded, and this brings us to the third key area driving this new paradigm shift. For the most part, consumers are no longer loyal to a brand. Google says it has begun to see a major shift in recent years; according to the company’s figures, three in four consumers say they are likely to switch to a new brand, while less than one in two purchased the brand that they initially considered.
Thus, the traditional sales funnel no longer applies in the era of digital marketing. As a result, vehicle manufacturers need to be more nimble, both from a technology standpoint, and within their marketing campaigns.
“If we watch a user search for Toyota, they might end up with a General Motors brand. We’re also seeing that even if they are searching for fuel economy, or pricing, they might almost get down to a purchase of a vehicle, and then start the process all over again. And also, the purchasing process and the research have shrunk down to three months. This is very fast,” said Guerriero.
According to the 2013 Netpop Global Auto Study, 81% of potential buyers use online sources to learn about cars. Of this, 50% use their smartphones at various stages of the process. For instance, 68% use their smartphones to decide on the make or brand of a car; 68% use smartphones for purchase decisions on the type or model; 46% use this for features; 60% for price and financing; and 53% to decide on the dealer/seller.
The smartphone, therefore, is turning into an important component in the car purchasing process. As a result, when an OEM or dealer is thinking of providing potential buyers a seamless experience, the smartphone needs to be top of mind. While this brings new opportunity, it also brings a wealth of new challenges and new thinking for the OEMs.
“A lot of people think that if their website is good, then it’s good; but really, all of these different areas are taking place on the smartphone – the make, the brand, the type, the model, the features, even financing and pricing and obviously dealer and seller. They are trying to find all and any info on their smartphones,” Guerriero says.
To illustrate frictionless customer experiences and the blurring of offline and online boundaries, Guerriero mentioned the example of Audi Cam, a service which enables customers to see and hear about necessary repair work, and to authorise it through a mobile phone or personal computer. A handheld camera produces narrated film clips that are embedded in a customer-specific, PIN-protected web page that is emailed to the customer. This page includes video and audio commentary, VAT-inclusive pricing for each job, personal technician and service team profiles and action buttons for automatic authorisation of work.
Toyota, meanwhile, has been innovating with the shopping experience. Its Collaborator, which the company launched late last year, is a social car shopping platform geared to bringing in participation and conversation. This is an example of an OEM working to understand the generational shift, and using it for its digital marketing initiative.
Mercedes-Benz’s advertisement for Magic Body Control, a sensor-based system which scans the road ahead and adjusts the car’s suspension accordingly, also gained mention at the Megatrends conference. “With this, they’ve entered the content game, which is what the users are asking them to do. It grabbed attention and definitely gained consideration and that’s ultimately what we’re trying to do, to follow what the users and consumers want us to do,” said Guerriero.
Digital platforms to lead new car sales leads
Analysis published by Frost & Sullivan early in 2014 suggested that global passenger car companies are desperate to innovate and adopt a new retail model to the next generation of car buyers. This shift has been further driven by high real-estate costs, expensive resources, and the need for innovation to stay afloat.
According to the study, such factors have resulted in many automotive dealerships resorting to shrinking their store spaces by around 20%, and instead opting for digitisation as a mode of interacting with prospective customers. While European OEMs are pushing for standalone digital formats, North American OEMs appear to prefer digitisation within existing franchise models.
By 2020, 60-70% of new car sales leads will be generated by a digital platform, says Frost & Sullivan, be it via websites, mobile sites, social media or apps.