How to Boost Your Marketing ROI With Propensity Indicators

Target your ads to the precise audience that can best afford your dealership’s products and services

Propensity indicators empower your online targeting using segmentation analytics, enabling your dealership to serve the right message to the right audience and improve your marketing ROI.

Auto dealer groups and their ad agencies are continually refining how to reach consumers online.

How are you currently evaluating whether to serve up your economy model versus a luxury model when you deliver an online ad? Or when to serve up new-vehicle versus pre-owned vehicle offers? Are you able to target your ads to just the audience that can best afford your products and services?

To best answer these questions, your dealership needs to create and deploy propensity indicators, which empower your online targeting using segmentation analytics. With them, you can serve the right message to the right audience and improve your marketing ROI.

Let’s start with the basics. Segmentation profiles of your prior customers—or new car buyers in general—reveal propensity indicators derived from analytical segmentation frameworks.

The analytical framework contains dozens of household segments created from estimated financial metrics and consumer demographics. It is built to estimate the composition and characteristics of households without making use of personally identifiable information about any specific household, and does so within a limited number of segments, typically 50 to 75.

For example, let’s look at the Suburban Singles & Couples segment—a group of consumers with a high interest in new vehicles. They are high income, home-owning, suburban singles and couples with relatively low spending levels compared to their incomes.

They are automotive enthusiasts who prefer vehicles that are fun to drive, such as convertibles, coupes, sports cars, and trucks. In their spare time, they enjoy attending major sports events, watching football on TV, and listening to the radio. Using analytics, you can determine how many of your best customers—and thereby prospects—belong to this segment.

Now let’s imagine you have a luxury vehicle for sale that costs $75,000. You only want to serve your luxury-vehicle ads to the audiences that match the likely buyer profile.

You know from analyzing prior buyers in your CRM that you want to target Suburban Singles & Couples and another affluent segment, such as Executive Empty Nesters. Both segments are actively surfing the web and shopping automotive sites.

Propensity indicators help you serve your ads to just these segments of consumers, and not to folks who have no interest in that particular brand or model, or who likely can’t afford your vehicle. In other words, the web surfers who are not assigned into these segments won’t see these ads.

Your CRM database, appended with segment identifiers, helps to highlight households that have a high propensity for your products and services, so you can more effectively market to them. This kind of granularity can be used to better segment your existing customer or prospect database for a particular campaign.

It also allows you to serve the right marketing message to the appropriate households. This has traditionally been done via direct mail, but now involves addressable TV, internet, and mobile and radio streaming. You can serve ads to specific segments to significantly reduce cost and ad exposure.

The really good news is that these household-level segmentation solutions are already programmed into Google, Facebook, and many other data management platforms (DMPs). Your dealership marketing team or ad agency can go into a typical DMP to select the segmentation system and segments you want to connect with.

The segmentation can be used for offline marketing efforts such as postcards or local TV call-to-action advertising for a weekend ride-and-drive event. It can also be combined with highly targeted digital efforts to deploy the same campaign tactics for a consistent omni-channel campaign.

To help measure your success, a closed-looped attribution analysis can be conducted. Over time, this lets you match your targeted ad performance to actual sales results.

When you’re ready to take advantage of propensity indicators in your online marketing, make sure to pick a vendor that can help you best measure the impact of segmentation insights on your marketing efforts.

Andrew Skillen is the senior director of product marketing for IXI Services at Equifax. Andrew has more than 20 years of experience in the marketing of business and consumer products, and has held roles in product marketing and marketing communications at Equifax for the past 10 years.

Andrew Skillen, Sr.

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