Profit over volume: the new reality of a disrupted auto market
Automotive marketing has changed forever, and the traditional measures of success no longer apply. Facebook’s product marketing manager global automotive, Brandon Herring, examines the issues facing the sector.
The automotive industry has hit a global inflection point. The next two decades for the sector are going to look nothing like what we’ve seen before.
And here’s the reality: marketers need to be the first to get comfortable with these changes and take the opportunity to drive them through their businesses. Electric cars, autonomous vehicles and mobility services will all change the way consumers view their ownership needs.
This isn’t something that’s several years away, these are factors which are already impacting the industry. In 2017 Australia had a record year for vehicle sales, with 1.189 million sold domestically in Australia (1). Last year’s numbers dipped to 1.153 million (1), and indicators show the decline is continuing, with sales down 8.4% from June 2018 to June 2019 (2).
These are concerning numbers if you are KPId on the volume of units you’re selling. And if volumes are unlikely to increase, your business needs to focus on what’s really important – maximising profitability.
From a marketing perspective, it means working more cleverly and evolving your strategies and go-to-market tactics. With a need for having a keener eye on costs comes the imperative to re-evaluate how you’re actually driving those sales. Your marketing ROI has to go under the microscope.
It’s time to put the customer at the heart of your thinking, and that means re-engineering your understanding of how they are actually discovering and researching your products.
Gone are the days of relying solely on dealership rapport and loyalty driven through habit. Every sale must be earned and driven through deep connections with customers throughout the path to purchase.
So, to steal that old Tourism Australia slogan – where the bloody hell are they?
Evidence from a Facebook-commissioned Global Auto Consumer Journey Study by Accenture shows 63% of Australian auto intenders and buyers* discover vehicle purchases online compared to 33% in a dealership. For evaluating an auto purchase, the figure remains in favour of online over dealership, at 55% to 42% (3).
But if you’re limiting your marketing to ‘traditional’ online auto channels, you’re also missing a huge opportunity to try and influence customer decisions. The Accenture study showed that 80% of auto intenders and buyers* surveyed find social media useful when deciding on a purchase (3).
Their appetite for additional content is also appreciable, with 73% of surveyed auto intenders and buyers* who use Facebook and Instagram saying they’d like to see more content on their feeds relating to automotive (3). These are people looking to engage with the category.
These statistics also show that a continued presence and active engagement on these channels is just as important as being there in the first place. They are clear signals to marketers that an always-on mentality across social media is the best way to ensure they don’t miss their opportunity.
But as much as being present when opportunity knocks, marketers need to know what best practice looks like and then take steps to implement it.
The answer – if the trends we are seeing overseas are anything to go by – boils down to a well-rounded eCommerce strategy, underpinned by a few unique factors.
The first is sales. Accurately measuring overall sales allows a focus on the highest ROI channels.
Achieving scale for your marketing outlay is another big factor, particularly in markets that are being pressure tested. The need to reach as many people as possible on the path to purchase becomes paramount.
Marketers who pin all their hopes on a lavish and expensive launch campaign are missing a trick. Today, campaigns that have consistent touchpoints and a long tail are the way to stay top of mind until the moment of purchase for consumers.
So if you’re an automotive marketer, your world has already changed. And it’s a shift that will continue.
This is especially likely to be the case with the high price points of electric vehicles in the short term. Auto marketers now need to be smarter with how they spend their budgets and put additional emphasis on cost-efficient conversions and profitability.
The media habits of your customers have changed, and your ability to have a more continuous presence in their path to purchase has never been greater, or more straightforward. It’s time to drive change through your business and set it up for success in 2020.
Sources
1. Australian car market: Car sales, statistics and figures by Cars Guide, 21 Jun 2019
2. Australian Vehicle Sales for June 2019 by Performance Drive, 3 Jul 2019
3. Auto Consumer Journey Study by Accenture (Facebook-commissioned); n=1,007 (Jun-Jul 2018); n=1,001 (Nov 2018) auto consumers, ages 18+, Australia
*For the purposes of reading this article, auto intenders and buyers are defined as those who purchased or leased a new vehicle within the past 6 months or intend to purchase or lease a new vehicle in the next 12 months.