The vast majority of car buyers turn first to the internet to start the buying process. Recently, a study by The Keynote Customer Experience Ranking showed that when shopping for a car, most consumers now start by browsing manufacturer or third party sites (such as NADAguides.com, Vehix.com, and Consumer Guide). The study indicates that very slightly more people (76 percent) would visit a manufacturer’s site than would visit a physical showroom (75 percent). About two thirds said they would visit a third party website -- the same proportion that said they would ask a friend. Fifty-three percent said they would consult newspapers, the traditional source of auto information.
With automotive being the biggest advertising category in the U.S., a great deal is at stake in the performance of websites that attract potential auto buyers. In fact, the Keynote study says that consumers who do choose to research autos online rate a site’s search and comparison functionality more important than vehicle price in selecting one site to visit over another.
iMedia turned to Mitch Lowe, CEO Jumpstart Digital Marketing -- an interactive media sales, marketing and technology company specializing in maximizing automotive advertising revenue for web publishers -- in order to better understand the performance metrics his firm uses to measure success.
iMedia: What can you tell us about how you measure ROI for your publishers?
Lowe: The ROI of the website publishers we work with is monitored very closely and evaluated based on three distinct “clients” of the website. First, is it providing a helpful experience for the consumers visiting the site and doing automotive research? This is achieved via surveys to consumers as well as site metrics such as page views per user and time spent on the site. Second, we measure the ROI of the advertisers on the site. Automotive manufacturers and dealers use different metrics to evaluate success and we spend time reviewing them all. These metrics include: cost to acquire traffic directly, cost to acquire traffic directly and indirectly (indirectly includes consumers who have seen the ad and then visit the advertiser’s website within 30 days), cost per qualified traffic (consumers who reach certain defined sections of the advertiser’s website) and cost per lead (the cost to acquire a consumer who completes a form with personal information asking to be contacted by the advertiser). Third, we measure the ROI of the website publisher. These metrics include revenue per user and profit per user.
iMedia: Are you satisfied with the current performance metrics you use in measuring site ROI?
Lowe: Yes. We realized a couple of years ago that a lot more science needed to be applied to our efforts. Since then, we’ve hired lots of analysts and an operations team to focus on the dozens of reports needed to create true ROI reports for the various stakeholders (website publisher, advertisers and consumers). So, for now we have good reporting. But these reporting requirements will continue to grow, and to be successful we need to stay ahead of the curve.
iMedia: What site performance metrics do you predict will be important in the future?
Lowe: In addition to the metrics used today, there will be more attention focused on the brand awareness benefits of advertisers. For example, how well do rich media video ads influence research behavior on the site? If a consumer sees an ad for a new Ford on the home page, is that user more likely to do research on that Ford while on the site? Does the ad result in the consumer considering a vehicle they otherwise wouldn’t have? This detail of reporting is under development and will continue to provide an incredible degree of accuracy on the effectiveness of online advertising for automotive advertisers. And these reports provide an invaluable sales tool in showing auto OEMs where and how to allocate their budget.
iMedia: Looking at the industry in general, who do you believe should be responsible for the overall performance and ROI?
Lowe: There’s not an easy answer. Ultimately, website publishers need to create a product that consumers love to use. And at the same time, it needs to be a cost-effective advertising solution for advertisers. There are dozens of reports that consider ROI around these factors. To achieve success demands the attention of marketing personnel, sales personnel and website development personnel. It also requires a ton of site research and independent research to stay ahead of the curve.
iMedia: What about actual sales? While it may be difficult to judge whether or not an actual purchase decision is made on clickthrough or viewthrough, whenever a customer goes so far as to fill out a form online to get information that act could, conceivably, be tracked all the way through to a sale, if there is one. And surely that's the biggest ROI question. What is Jumpstart doing to track sales? What are the obstacles and opportunities?
Lowe: When dealers purchase third party leads from automotive publishers, the technology does exist to track that lead thru to purchase. Typically, an automotive dealer that purchases leads spends about $200 per car sold on interactive leads, versus $300 per car sold using traditional media. For branded advertising, it is more difficult to track a visit to a manufacturer’s website, and then to a dealer’s website and CRM system, and then to a cost per sold car. However, the manufacturer can track the cost to obtain customers at different levels of “qualification” -- such as cost per brochure request, scheduled test drive, request to be contacted, et cetera.
iMedia: I once made the mistake of filling out an online form in an attempt to find a general price-range (new or used) in my area for a car that had caught my eye. Thank heavens I used a fake name and a junk mail address because I was immediately pummeled by email from car sales people that didn't let up for a long time. I vowed never to fill out a form like that again. I'm bringing this up because it seems to me to highlight a culture clash between how web publishers generally treat their visitors and how auto dealerships generally treat their customers and potential customers. Does Jumpstart have a take on this? Do you have best practices for auto advertisers -- whether brands or dealerships -- not to mention privacy policies for the information that consumers share when trying to get information about a potential purchase?
Lowe: Jumpstart only works with automotive publishers who make it very clear that the request is being forwarded to a local auto dealer who will contact them. Further, Jumpstart’s publishers let the user select how many dealers they would like to contact them and in what manner (phone, email). Privacy issues are considered, and only dealers who adhere to strict privacy guidelines are allowed to participate in the program.
iMedia: Print newspapers are the traditional source of information for consumers about new cars, but what about online newspapers? Does Jumpstart treat a local paper's website like any other publisher, or does it attempt to leverage the brand loyalty of the offline paper in its strategy for putting web ads in front of web paper readers?
Lowe: To date, online newspapers haven’t gotten much traction with online car shoppers because they don’t offer all of the research, reviews, side-by-side comparisons and access to pricing that the larger national third party auto sites offer. Typically, local papers are trying to funnel users into their classifieds sections to appease their local dealer advertisers. For local online newspapers to grow, they need to invest in the content and research functionality to compete with the leading automotive research sites.
