Luxury automaker seeks to maximize the Internet’s power to drive the process of buying a certified pre-owned car.
Ever since the first Ford rolled off the lot, there have been new cars and used cars from which to choose. But in recent years, luxury car companies coined a new category -- certified pre-owned vehicles (CPO).
The reason is clear. The connotation of the used car over the decades became one of sleazy salesmen dressed like Herb Tarlek of 'WKRP in Cincinnati' who would do anything to get you to buy whatever piece of crap was on the lot. Eventually, there was no distinction between the product being sold and the people doing the selling. Used car eventually meant sleazy and dishonest. Luxury car manufacturers wished to distinguish their used vehicles from the typical used car, thus the emergence of CPO.
The CPO vehicle market is among the fastest growing. So much so that Lexus recently announced efforts to promote its robust pre-owned vehicle line by aggressively using the Web, and by actually creating a separate, third car category.
Marv Ingram, national CPO/fleet manager for Lexus, says, “Through our research, we learned that the Internet is really where consumers are going to learn more in-depth information,” so that focusing the majority of their efforts online would have the most impact for the Lexus CPO vehicle.
In fact, Lexus has been shifting money away from cable TV buys and production of commercials to the Internet as a way to narrowcast even further than is possible through cable.
"Over the past six years, Lexus has shifted its CPO media buy each year to adjust to consumer needs and an evolving CPO market. This fiscal year is really no exception, “says Ingram. “Recent consumer research provided valuable insight that allowed us to be more targeted with our CPO funds. Our third-category campaign required a stronger focus on Internet spending but also required us to have an aggressive print buy. Most of our shift for this fiscal year came from cable TV buys and production of commercials. Our media budget growth is commensurate with media inflation rates."
Something to understand about automotive marketers is that there is little they do without reason. The category possesses among its ranks many of the savviest marketers. They have to be, given the kind of money a consumer spends on the product and the potential longevity the relationship can have.
These guys have found that the Internet is best suited for accomplishing their goals. They are not using the Web on a whim, or to spend money there because they have it. The reasons the CPO market is making use of the Web are much the same as that of new auto marketers. Of course, these are often the same companies.
The issue with the CPO segment, however, was trying to identify just what kind of product category it really is and then articulating it to the marketplace.
“We found that luxury pre-owned buyers are similar to new luxury buyers in their shopping process, motivations and behaviors. As they begin the shopping process, they focus on brands and models, as opposed to specifics of pricing, options or special offers or deals. So, from that perspective, CPO and 'standard' automotive promotion is similar,” says Ingram.
"Understanding that approximately 70 to 80 percent of luxury car shoppers use the Internet in the research phase of their shopping process, we created a program that would address these issues. Lexus approached top automotive Web sites and proposed the idea of elevating CPO to a third, distinct category.”
So, Lexus has been able to work towards establishing a separate class of product category by, in essence, treating it much like the one they already have -- namely, the new vehicle.
The CPO auto market, therefore, is looking to the Web in ways that are not dissimilar from that of the automotive category advertiser in general.
“One key to CPO marketing that makes the Internet a desirable place is that a consumer can easily touch new and used at the same time. This best reflects the experience a consumer has at a dealership. There are new and used vehicles on a lot to look at. So, it's natural for CPO vehicles to be in that mix,” says David Leider, the category development officer for automotive at Yahoo!. “The Internet offers that same cross-shopping dynamic.”
The Internet offers the CPO category advertiser the same things it offers the new vehicle advertiser, which are, at their core, often the same entity.
Essentially, the key to advertising is advertising to the right people at the right time, talking to someone about what it is that they are interested in while they are interested in it, and having what it is that they are interested in. As much advertising in the automotive category has been, the CPO segment looked to environments conducive to the research phase of shopping for a “new” car.
Lexus decided, however, that by treating the CPO like the rest of the automotive category, they would in turn make it distinct. Lexus' Ingram says they “took on the task of elevating CPO to the same level of 'new' and 'used' because we were confident that consumers would find its CPO program to be the best out there. We were willing to lead the charge in the CPO arena to provide consumers with the information they need to objectively compare our program to everyone else's in the industry.”
To do this, information concerning CPO product had to be treated as though it were distinct from the rest of the automotive segments. The solutions for doing this, as it turns out, seem to replicate what publishers have done for the rest of the automotive category online.
“This program was not a typical ad buy,” Ingram continues. “Lexus encouraged the sites to create a whole new category with unbiased CPO content for consumers to ensure that the information is objective, credible and, therefore, most valuable to consumers.”
There is no doubt among the various marketers for automotive manufacturers that the Internet is an indispensable component in moving an individual from being a potential consumer to an actual one. In an article I wrote for iMedia a number of months ago covering the automotive industry in general, the consensus was that marketing ventures online were going to not only persist, but most likely become more profound as part of the overall marketing mix. The use of the Internet as a de rigueur medium in the lives of the general population is certain. So, too, is its use as a research tool for those in the market for a car.
But will the consumer ever start buying online? Is there a time in the not-too-distant future when a body will, at the end of his search, finally click-and-buy, whether the auto be new, used or CPO?
A guy I used to work with once bought a car over eBay. And a young assistant media planner I knew years ago, on the early end of Internet adoption, bought her Mitsubishi online and had it delivered to her at the office.
These are but two personal anecdotes and cannot be construed as a sanguine view of a future where car shoppers drive their cars off the virtual show room floor.
“Very few vehicles are directly purchased online, but quote requests can directly lead to sales,” says Leider. “The lines between research and purchase have blurred. A user on Yahoo! Autos might send a quote request or link from a marketing unit to an OEM site, and at the same time on a whim, go to Yahoo! Maps or Yellow Pages and look up the dealer's address or call them.” This suggests an engagement of ‘surround-sound marketing utility’ but far from actually purchasing vehicles online.
“For car shopping, the majority of consumers are still using the Internet primarily for research,” says Ingram. “At Lexus, we believe that consumers still want a connection to a local dealer and want to know that there is someone they can go to for questions and service. Our current program helps consumers find vehicle inventory and specifications online, but connects them with a local dealer for a test drive and hands-on information about the vehicle.”
For now -- happily, I say -- the consumer is still interested in making the more significant purchase activities in their lives interpersonal and tactile. But let there be little doubt that the Internet is becoming responsible for doing more to get consumers in the mood for buying a car than any other medium. Whether it is a new car, a used car or a certified pre-owned car, online is the place to be to learn about it and the place for automotive advertisers to do the teaching.
Jim Meskauskas is Chief Strategic Officer for Underscore Marketing, a next-generation media and strategy shop founded in May of 2002. Since its inception, Underscore has attracted top-notch talent, including some of the innovators who have helped guide the industry through the emerging media landscape. Underscore’s deep understanding of all forms of media drives its success as a cross-platform shop that delivers top-notch expertise to its clients, both in planning and in execution.