Holiday automotive advertisements and promotions used to be dominated by luxury brands showcasing big red bows on the top of cars presented as prestigious surprise gifts.
In recent years, that type of promotion hasn’t been limited to luxury. The question, however, is how COVID-19 may impact holiday promotion plans and consumer spending.
Brands Make Great Investments in Holiday Campaigns
According to MediaPost, brands spent a total of $3.7 billion on holiday season advertising in 2018. Automotive brands represented nearly 10% of that spend.
The choice to advertise during the holidays was a logical one in past years. People were out shopping, and automotive companies wanted to make sure they put their best foot forward when potential buyers were making their considerations.
This year may be different, though. COVID-19 has significantly muddied the economic waters when determining who has the financial capacity to spend.
2020 Holiday Season Offers New Challenges
While the economy is more turbulent than in years past, the need to grow and maintain market share hasn’t shifted. During these challenging economic times, it’s even more critical that auto brands and agency partners target the right consumers.
This has come with challenges in the best of times. Pre-COVID-19, only 14% of marketers overall said their audience-data buys were very effective, resulting in wasted ad spend and lost revenue.
Accuracy matters. This year, automotive brands and agency partners are combining traditional vehicle promotion data along with audience targeting segmentation data and insights to help brands and agency partners better target not only consumers who are in-market for a vehicle, but also those who can afford to buy one.
This advanced set of data and insights provides the ability to target in-market make/model intenders along with their estimated financial capacity so OEM brands and agency partners can run more effective retention, acquisition and conquest campaigns across digital channels.
Extra Layer of Audience Segmentation Data for Stronger Campaign Targeting
This is where audience segmentation comes in.
Sophisticated data today is uniquely built using robust data sources, including estimated income and asset data contributed directly from the IXI Network of financial institutions as well as aggregated credit information.
This anonymized data can help estimate nearly 50% of all consumer assets and investments, making it uniquely predictive of a prospective buyer’s financial capacity.
In the past, OEM brands and their agency partners have leveraged datasets based on unverifiable survey or panel data.
Why is this important? Not all high incomes are the same. Every household leverages debt differently. Differentiated data assets such as audience segmentation can help OEMs gain fuller visibility into a person’s or household’s ability to pay by taking credit-income spending behaviors into account.
With this additional information, OEMs can offer different incentives to different people based on their unique financial situation, all while maintaining user privacy.
This sophisticated level of data enables OEMs and advertisers to better differentiate and reach online consumers that are likely to have the financial capacity to purchase their products and services.
Today’s anonymized household economic data now is combined with discretionary spending, credit, demographics, buying behaviors and insights into make and model preferences, delivering better-matched auto audiences which are more receptive to holiday campaigns and offers.
No doubt, the holidays will feel much different this year. As the pandemic continues to create turbulence across the greater economy, holiday shopping for all goods, including cars, will make it much more challenging for auto brands to advertise and identify consumers with the right financial capacity to make a purchase.
However, with the right data and insights, automotive brands and agency partners can ensure they’re getting the most out of their creative campaign investments by identifying the right customers who have the spending power to maximize every dealership or website visit.
John Stremel (above) is vice president of sales for automotive digital solutions at Equifax and has 20-plus years of organizational leadership experience primarily in the automotive vertical.