Despite being more than a century old, the automotive industry remains on the cutting edge of technology, from democratizing alternative powertrains including hybrids and all-electric vehicles, to turning a vehicle into a Wi-Fi hot spot. In fact, with the recent recovery of the U.S. economy, the auto industry has experienced a stronger than expected resurgence which can largely be credited to these advanced technologies driving increased new vehicle demand.
A recent J.D. Power study found that as the next generation of vehicles hit the road, whether or not a vehicle is equipped with the latest technology features is becoming more of a consideration than ever before. The study found that more than 43 percent of premium brand drivers and 28 percent of non-premium brand drivers cited their vehicle's technology as a key reason they purchased that specific vehicle.
This growing demographic of auto buyers places a higher value on in-vehicle technology, and they aren't going to make what is still considered the second largest purchase for most households without doing some research -- which, for this generation, means hitting the internet via their mobile devices. In order to stay relevant, the automotive industry has had to adapt to evolving consumer, safety, and technological trends.
One way they have done this is by changing how they advertise to consumers, with two factors in particular reshaping the automotive landscape more than any other: data and the proliferation of mobile devices.
Data is everywhere
There are many facets to "Big Data" that have impacted the automotive industry. Over the last few years, the largest data-driven change affecting the automotive marketplace is vehicle pricing transparency.
Companies like TrueCar provide average vehicle transaction prices by local market based on actual dealer-reported data. TrueCar, along with similar services, provides a valuable consumer service, as it helps prospective car buyers answer their most pressing purchasing question: Did I pay too much for my vehicle?
For consumers, the automotive industry has historically been an area where the buying process is painful -- often described as only a notch above a trip to the dentist in terms of enjoyment. This consumer sentiment is deep-rooted, and derives from the expectation that buyers will have to haggle on price and may end up paying too much.
With average transaction price data more readily available, the dealership experience has moved from "shopping and haggling" to simply "buying" for most people.
This is evidenced by J.D. Power statistics showing that just 10 years ago, the average car buyer visited 4.5 dealerships prior to purchase, whereas last year, that number fell to only 1.4 dealership visits. This is a huge shift in consumer behavior, and is largely being driven by the accessibility that vehicle buyers have to data before even setting foot in a dealership.
Mobile devices are changing how we engage
In an era of instant gratification and the ultimate customer experience, automotive marketers are being heavily pressured to adapt to cater to a new type of customer, one that gets their information in a way previous generations haven't.
The average U.S. household has gone from less than three IP-connected devices to more than 10 in a relatively short period of time. With the spike in the number of IP-connected devices in the household, cookie-based targeting isn't always able to keep up with users from device to device. For automotive marketers, this poses the problem of not being able to establish a singular view of each vehicle buyer. They are beginning to realize that their "last-click" or "last-view" attribution models are over-valuing search in lieu of their broader digital media footprint in actually driving purchase.
To help them connect with this new generation of "hyper-connected" consumers, some automakers have turned to a new approach that is now emerging from the advertising industry called people-based targeting. This allows marketers, for the first time, to accurately link all devices and vehicle buyers. People-based targeting goes beyond the transient cookie on the laptop or desktop and considers the entire device graph of the perspective vehicle buyer. With a people-based approach, automotive marketers are able to more accurately target identified consumers based on in-market shopping behavior such as KPIs, vehicles researched online, and recent lifestyle changes.
In doing so, automotive marketers are able to deliver personalized messaging to vehicle buyers across all their connected devices and truly manage reach and frequency. Most importantly, they can now close the loop by factoring in offline vehicle sales -- empowering them with a full and accurate picture of return on their ad spend.
Today, the wants and needs of the vehicle buyer during the purchasing process are in the forefront for the first time. This is an exciting opportunity for both automakers and vehicle buyers alike to be able to enjoy a successful experience through effective targeting and digital campaigns.
Jon Schulz is CMO at Viant.
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