The automotive industry has long been miles ahead of other sectors when it comes to sleek television advertising, but it could be stalling when it comes to adapting to the social media environment of today.
A New Normal
There’s been a lot of debate in the last couple of years around the automotive industry’s seemingly slow response to the challenges of digital adaptation at every level of the sales funnel. 2014 research from Arthur D Little has found that “few OEMs are ahead of the learning curve” in terms of digital adaptation and 87% of OEMs and 66% of dealers found that online transformation will impact the entire value chain.
The report’s findings into customer expectations and trends is perhaps more revealing, with 60% of customers reporting the importance of a “configurator” in making a purchasing decision across digital channels and 70% of customers admitting they spent more time purchase information gathering online than off. 40% of customers said they would consider purchasing a vehicle online in the future and would hope to gain a price advantage as a result.
The crucial importance of the online pre-purchase journey has undeniably changed the nature of the game for OEMs. A Netpop Global Auto Study in 2013 revealed that nine out of ten potential vehicle buyers do online research, with almost half using or contributing to social media related to autos, while research by Frost & Sullivan undertaken this year has stated that within six years we can expect to see between 60 and 70% of sales leads for new cars generated via a digital platform, whether that be social media, websites or increasingly mobile apps.
All these findings represent a marked shift towards what Google’s Global Head of Automotive, Meredith Guerriero, has referred to as the “new normal”. This is a world where the key to successful marketing is increasingly dependent on creating dialogue with would-be customers and less on the monologue outbound marketing of television, print and billboard advertising. In other words, cool car ads just aren’t as influential as they once were.
Old Habits Die Hard
As the quality gap between different brands narrows and loyalty fades as consumers feel more empowered to make independent and informed choices, so the urgency to adapt becomes more pressing. As Giancarlo Agresti, the head of the Global Automotive & Manufacturing Group, says in his preface to the Arthur D Little Report:
We think that those who are prepared to abandon the old patterns that have characterized the amazing story of success for the automotive industry of the past century will discover that customers are ready to participate with enthusiasm in new forms of communication and interaction with automotive manufacturers and dealers.
There’s no doubt that traditional advertising on television, in print and on billboards has worked fantastically well for OEMs in the past. Indeed it may be that such success in creating strong brand image and customer loyalty through television advertising has actually helped to prejudice marketing departments against the urgency to innovate and create dialogues in social media.
Of course there is another way at explaining the slow digital uptake. If such control over brand image and style has traditionally been exercised by OEMs through television advertising, then could it be that a comparative lack of control in marketing on social media has been the driver of so much hesitancy for OEMs to fully embrace the digital medium? In 2012 a CMO report into the industry found that reputation management fears could be the cause of such hesitancy. With automotive makers traditionally relying heavily on brand loyalty and image, could it be that social media presented too many unknowns to auto marketers?
In the same year as the CMO report was published, Volkswagen was busy deleting unfavourable Facebook comments to an innocent question posed to its customers at the end of 2011, as the company found itself at the sharp end of a concerted campaign challenging its environmental record, orchestrated by Greenpeace. While it’s unlikely that any OEM would repeat VW’s PR disaster by deleting unfavourable comments in this way, the danger of concerted and coordinated negative public feedback was clearly demonstrated as ever-present on social media. Carefully constructed brand images car manufacturers had built up over the last half century through print and television advertising, seemed to be under daily threat of attack in the frank and open world of social media.
The Tide is Turning
There is of course no doubt that OEMs and non-OEMs alike have woken up to the importance of digital adaptation and social media specifically. Guerriero believes the shift is now happening with marketers learning to evolve their strategies to engage with a wider online consumer base at every stage of the sales funnel, citing Chevrolet as an example, when giving the keynote speech at the Automotive World’s Megatrends USA 2014 conference (the company famously used celebrities on YouTube to show off the Captiva’s features). “It’s no secret that several brands now identify the digital platform as a core pillar to their marketing strategy,” remarked Guerriero.
Toyota is another company that is working hard to create a dialogue with its customers, by using Google Plus hangouts under the brand name of the Collaborator and Honda had a major social media marketing success, with its Bruce Willis led campaign encouraging Superbowl fans to enjoy a #hugfest. Peugeot also turned to social media in a bid to increase brand enthusiasm in the UK by focussing on buyers’ positive reactions immediately after a purchase, while Mercedes started the ball rolling in 2012 by encouraging Twitter users to influence the outcome of their television advertisement. The Mercedes campaign in particular is a perfect example of an integrated, multi-channel marketing approach designed to go beyond increasing brand awareness and promote communication and involvement.
Traditional television and print ads are not defunct and nor are they ever likely to be but they simply cannot exist in isolation any longer. A multi-pronged multi-narrative approach across digital platforms is essential to engage consumers and encourage them to spend.
Some dealerships have undoubtedly caught on to the digital trend faster than others, with some shrinking their bricks-and-mortar space to focus more on online interactions, and more look set to follow. Despite the prospect of purely digital dealerships, a physical test drive is usually the clincher for any sale and will be for the foreseeable future. But with most automotive buyers now making purchasing decisions partly based on what they find online, the key for OEMs, is in directing the journey of these would-be buyers to local showrooms to test drive and ultimately buy. As CTO Frank Wolfram, of Geometry Global, the company behind Volkswagen commercial vehicles’ digital marketing says: “Focus on your platform, and focus on your core product, which is to get informed people over to the dealers.”
During the pre-showroom stage, customers are increasingly talking online about potential purchases and many in the industry have only just started to wake up to the level of adaptation needed to establish and earn a favourable presence within these digital forums. It’s all very well having a high-budget television and print campaign, but without a strong voice online many savvy customers could soon be asking why certain OEMs aren’t putting their money where their mouth is.
Jon Mowat is a former BBC film maker and now runs British based video production and marketing company, Hurricane Media. Over the years he’s put together marketing campaigns for many clients across many sectors such as Canon, Sony, BMW and Peugeot. You can follow Hurricane on Google+, Twitter or Facebook.
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