Marketing cars: Driving digital success

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Antony Green
Connect Group

An average of eight digital sources are used by prospective car buyers as they spend up to three months finding the right car, which is why the digital experience is vital for the automotive industry.

Digital marketing efforts by the top 10 car brands accounted for a massive $5.82 billion slice of the $16 billion-worth of automotive advertising investment in the US last year. There is no question that the category is big in the digital world, so how do they ensure this overall investment shows return all the way through the buying process?

Here are seven new themes for digital leadership that can guarantee success in 2014 and beyond.

1. Brand investment

Car marketers are in an ebullient mood. In 2014, Ford will launch 23 new vehicles around the world, open three more manufacturing facilities and add more than 5,000 new jobs in the United States to meet growing demand for its products. In the UK, there are now 96 different car brands competing for consumers' attention, with the Society of Motor Manufacturers and Traders claiming that around 2.25 million cars will have been sold in 2013.

In this highly competitive sector, brand strength matters, and as Chevrolet's demise in Europe testifies, the recent phenomenon of 'segment crowding' – where carmakers introduce more and more products to fit every segment in the market – is massively challenging. Everyone is in everyone else's space. Once it was easy to distinguish between luxury or 4x4 brands. Now Porsche depends far more on its SUVs than it does on the classic 911 for volume. Despite the GM-owned Chevrolet brand's strong heritage in the US and sponsorship of Manchester United, it struggled to find a voice in the market, with no distinct segment advantage over its sister Vauxhall and Opel ranges in the European market.

Does this change in a digital world? The commercial pressures of supply and demand continue apace, and a brief look into how automotive marketing is organised shows digital experience is a potentially rich seam for brands to mine.

Where does the money go today? Most automotive companies invest in marketing strategy in three buckets. Future Strategy: focusing on how people will drive in the future (using other greener power sources, car sharing in metropolitan areas, self-driven safety systems and so on). Demand Generation: getting people to like and consider the brand in the market now. Marketing Operations: fulfilling demand through the customer experience, providing dealer experiences and service capability that helps customers continue a relationship with the brand. In a nutshell – pre-sale, sale and post-sale.

Setting aside the 'digitisation' of future product, the role of marketing communication in ensuring the customer is aware of the brand and 'nudges' it into the consideration set is well understood, and this investment tends to come from the demand generation portfolio of the CMO.

Digital communications play a critical and practical role in providing the information consumers use to help refine and justify a decision to trial a brand. According to Connect Group research, most consumers don't understand the difference between the models within a brand until they are in the actual process of looking for a new car. And digital experiences where consumers discover or identify the specifics – prices and product specifications that help them through the dealer experience – need to be excellent representations of the brand.

Car buyers use an average of eight digital sources and dedicate up to three months to finding the right car for them. Which are the most important? Gartner's 2013 analysis of marketing investment in the US shows that search and branded website content are the critical engagement platforms customers use when they are in the market for a new car.

Contrary to the attention the world of social media gets in the marketing community, the power of Twitter in reaching a defined audience and directly persuading them to buy a £30,000 car is still very much a work in progress. On the other hand, the role third-party reviews play in helping customers decide which cars to trial increases in sophistication every year.

Kia and Hyundai publish Revoo reviews of their cars by customers directly onto their sites.

2. Digital showrooming

It's worth noting automotive is a category where the actual transactional process of buying a new car hasn't changed much for some time. You always exchange contracts with a franchised dealer. There is still a limited appetite among consumers (and in the industry itself for that matter) to buy new cars online, but there is enormous appetite to explore the cars pre-and post-sale both on and offline. Google describes this as the ROBO phenomenon – researching online and buying offline.

Customers decide upon the car they want, research online, ask friends, seek out their favoured brand on the road and drive alongside it. They travel to a dealer of the brand they fancy, test-drive one or possibly two cars and then buy one. McKinsey calls this the 'consumer decision journey'; others the 'path to purchase'. Marketers should look for ways to improve the customer experience through this process.

Our research shows the role the brand website plays is twofold here: one is to deliver the information that supports the brand choice, but also the role it plays in delivering a reassurance factor – an affirmation bias – where people instinctively justify their choice of car by reading up on the positive reviews and ignoring negative reviews they may see.

To some extent, the automotive industry operates on metrics of behaviour from another era, when families had endless time at weekends to head to three different dealers, and spend upwards of three hours in each one, tyre-kicking and test-driving cars. Standard metrics lurk around an average enquiry-to-sale ratio of 20:1. In other words, to sell 1,000 cars a month means a company needs to generate 5,000 test drives of each car each month (at a high test-drive-to-sale conversion rate of 5:1) per 20,000 enquiries (that is, an online form of interest in a particular vehicle completed). The trending reality is towards fewer showroom visits and more 'intent to purchase' per visit, with consumers looking for shortcuts in the process all the time.

Independent reviews and looking up prices is one part of the answer. The other is in the digital brand experiences available – where online configurators play a vital part.

In fact, a 2013 Frost and Sullivan study posits that dealership retail space will shrink by about 20% and showrooms will be digitised with a customer interactivity brief, taking a leaf out of the premium retail playbooks of brands such as Burberry and Apple. Expect more dealerships to transform from static display environments into vibrant and playful Experience Centres.

3. Customer first

Companies such as Mercedes and Porsche have successfully implemented world-class customer-first business strategies. Looking outside the sector for inspiration in creating digital experience, the UK government has moved the goalposts for user experience design with an exemplar user-centric manifesto (GDS Technology Manifesto). Some have argued that the government has the benefit of a user group with no choice but to use its online services, but the 'open' and cost-reducing approach is for everyone (Figure 1).

It's a strong approach. Unless customer first is the default, across the business, with consideration given to the technical platform and an integrated approach to third-party lead management feeds, short-lived customer experience design changes will struggle to have impact. It's not uncommon for a prospect who has enquired about a test drive not to be followed up with a phone call, offered the test drive, and made to feel important and wanted – as the call from the dealer is prompted by a system that is not connected to the same digital platform where the enquiry was generated.

4. Always relevant

As Thomas Romieu, the group digital director for LVMH, says, brands "need to make it easy to find what customers know they want, guide those who want to browse, and inspire others". The proliferation of digital content, its immediacy and availability means brands need to adopt the skill sets and competencies of publishers to compete.

It will soon be 20 years since the world's first online car configurator was developed for Mini. This used a playful personalisation application online where people could design a car with hundreds of extreme Mini-fun features – crazy bull horns or big sunglasses on a Union Jack roof. It reflected the opportunity the internet afforded at the time to say so much more, with an attitude that limited press advertising exposure couldn't convey.

Now, millions of virtual vehicles are configured every week, for every brand, and a best-in-class example like the F-Type configurator conveys tone and narrative that complements the communications investment. And also uses an intelligent approach to showing the product portfolio, to prompt customers to choose accessories and extras that significantly improve the profitability of each car sold.

5. Experience design

Daniel Kahneman's Thinking Fast and Slow describes the ability of the brain to take in an enormous amount of information but only use a tiny bit of it. Car companies ignore this at their peril.

Having strong links on the page helps users know what to do, as they tend not to bother to explore the intricacies they judge and move on. Cognitive bias does it for them. Information architecture – the discipline of designing how to present the information for the customer when specifying a car – can be choice architecture, preferably by not offering too much choice. Consumers need to be able to understand where they are in the process, and be ready to move on to the next step, or simply start again from where they were next time they visit.

6. Creativity and technology

For the digital marketer, managing the usual budget priorities and securing investment challenges apply. The new challenge for the organisation is the ability, at a strategic and practical level, of combining marketing capability with technical capability – tough to do without executive-level support. As one digital marketing director remarked: "When they offered us a seat at the table, nobody mentioned that it was a high chair."

Gartner describes the new role of chief marketing technologist, to lead the organisation's goals of attracting, acquiring and retaining customers. The differences between managing system design, platform development, content creation, authoring and application development are very subtle at a high level; very distinct at an operating level.

7. The connected car

There's another battlefield looming for the car industry. New power sources and a subtly shifting ecosystem mean new and previously unlikely partnerships are being formed around fuel cell production – Honda and GM, Toyota and BMW. In 2013, Toyota released images of a production fuel cell vehicle at the Tokyo Motor Show. A key aspect of the publicity is that the vehicle will be a generator for the home as well as for a car. Google's driverless cars will be reality before long. Telefónica's research department would have us believe cars of the future will shift to being rather large communications devices.

In reality, the ability of car brands to innovate in the connected car space will depend upon their capacity to enhance real customer experience. Take the example of Tesla. Earlier this year, customers held a feedback session with the engineering team and asked if it was possible to make a subtle change in the driving dynamic of the car. Any other manufacturer would have thanked them for the feedback and, if the change had been accepted, would perhaps have made it available two years later in a new model. Tesla's engineers wrote the code, uploaded a patch to the cars and it was all done in a matter of hours. Now that's progress.

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