Blog / February 9, 2017

Driving Auto Sales with Video: A Chat with J.D. Power’s Thomas King

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It’s hard to think of an industry where the stakes are higher for digital marketers than they are in the automotive market. Cars are a big-ticket item, and because people keep their vehicles for years at a time, brands only have a brief window in which to win the business from their target audience. In this hyper-competitive environment, auto marketers need accurate measurement tools that can tell them if their marketing efforts are actually driving offline sales. Otherwise, they run the risk of wasting precious resources on flawed campaigns.

J.D. Power helps automotive brands avoid this fate by giving them the data they need to link their online audience profiles to the consumers who buy their vehicles. Through its Power Information Network (PIN), the company collects in near real-time more than 10 million vehicle transactions each year. By comparing these in-store sales to the audiences exposed to an online campaign, J.D. Power can tell brands how and why their digital video ads are delivering return on investment.

Recently, Eyeview’s CMO, Jeff Fagel, sat down with Thomas King, J.D. Power’s Vice President of PIN & OEM Operations, Media & Marketing. In the conversation, they discuss the future of automotive video marketing, the benefits of quality measurement and the unique challenges facing today’s auto advertisers.

Jeff Fagel: J.D. Power PIN data shows that an offline transaction has occurred and also collects more than 250 different metrics for every one of those offline transactions. How are some of these data points helping you measure more effectively?

Thomas King: Yes, PIN data reveals the type of vehicle that was purchased, exactly when it was purchased and also how it was purchased. For example, it reveals how much was paid for the vehicle, how the transaction was financed and whether the customer chose to buy or lease and what type of vehicle may have been traded in. This information gives us a much broader analytics capability and allows us to dig a lot deeper into performance, especially when we’re looking at a specific campaign. So, instead of just looking to see whether the ads helped drive a sale, we can also find out whether it attracted new customers to a brand or drove higher prices.

For instance, one of our clients ran a campaign with a component that included messaging about their leasing offers. When we looked at buyers who were exposed to one of the client’s online campaigns, we found that 18 percent chose to lease. But when we honed in on customers who saw the ads focused specifically on leasing, that number increased to 24 percent. This is just one example, but the transaction data was able to prove the success of that individual creative message.

Fagel: That’s really interesting, and I think your answer highlights a few of the things that make the automotive sector unique from an advertising and sales perspective. What do auto brands need to consider when it comes to investing in digital video?

King: There has been a huge increase in the number of people who are using video to help them make purchase decisions. Back in 2012, about 14 percent of new vehicle buyers who used digital information said they used video in some form or another. Now, that number has jumped to 45 percent. Given its importance, it’s more critical than ever for auto brands to leverage measurement to make sure they are maximizing the opportunity that digital video presents.

What we see from our measurement data is that digital video is an extremely powerful form of media, but it becomes even more effective when the video experience is tailored to the viewer. This is true for all consumers, but especially for millennials who now make up more than a quarter of new vehicle buyers. As the younger generation become new vehicle buyers, I think it will be crucial for brands to speak to them in a way that they want to be spoken to. It’s going to become more and more valuable to have opt-in video experiences that people can engage with to find the information they’re looking for.

Fagel: We had a lot of success working with J.D. Power on a video campaign that delivered a 7X return on investment for one of our regional dealer group clients. Tell me a little bit about the role measurement played in these results.

“What we see from our measurement data is that digital video is an extremely powerful form of media, but it becomes even more effective when the video experience is tailored to the viewer.”

King: Because PIN data is captured in near-real time and updated daily, we can provide rapid insight into campaign performance while the campaign is still in market. In this specific instance, changes in online placement and geographical focus were made on the fly to optimize performance.

More broadly, our ability to track video engagement helps us diagnose the drivers of campaign performance. For instance, if we see that purchase index isn’t highest among the consumers who watched your entire video ad, you might need a more compelling creative message to drive people into showrooms. Meanwhile, a low purchase index for all of your viewers could be telling you that you’re just not targeting the right people. This rich, fast and accurate analytics capability really helps brands spend their advertising dollars in the best way possible.

Fagel: Auto brands are very closely associated with television advertising. What are some of the challenges they face as they move into the digital realm?

King: I think a lot about all the ad blockers that are out there today. There’s been a great deal of talk in the industry about the need to create advertising that people want to consume, and I think video can help break through some of that because of how entertaining it can be. Perhaps the greatest example of ads that people really want to see is the Super Bowl, and automakers make a massive investment in that advertising. They try to be very creative and consumers love to go watch the ads. Being able to create that kind of advertising in the online space is going to become very important for changing the behaviors consumers are applying to the digital experience, where many of them don’t want to see any more ads.

Fagel: Automotive advertising has historically been sliced into three categories: Tier 1 national car brands, Tier 2 regional dealer groups and Tier 3 local dealerships. Do you see these distinctions beginning to disappear in the near future, creating more homogenous, location-based campaigns from the top down?

King: The tiers are a reflection of how the industry is structured, and I don’t think we’re going to see the end of tiers any time soon. That being said, I also don’t think that most consumers know about or understand the tiers. They don’t think about Tier 1, Tier 2, Tier 3—they just think about the vehicle and the brand they’re considering. So I think it’s the job of the automakers to help create a consistent story for the customer.

However, those consistent stories do need to embrace the unique characteristics of each region and the needs of individual dealers, and that’s where Tier 2 and Tier 3 can really help make sure you’re speaking to consumers in a way that’s going to resonate with them. But it can’t be a dramatically different story from what people have been told on the national level. Moving forward, it will be important to have more collaboration and cooperation between the tiers, but I don’t think they’re going away.

This interview has been edited and condensed for clarity.

Learn more about how video can drive sales in our Results section.

 

Melanie Franke Content Marketing Manager

Date: 02.09.2017
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