By about mid-March of last year, almost every major automaker ceased their production to do their part in slowing the spread of COVID-19. Coupled with shelter-in-place orders across the U.S., there was very little motivation for most consumers to buy a car. Ultimately, this created one of the most challenging economic environments the auto industry has ever seen.
Before COVID-19, human-to-human interactions were integral to car buying because of the significance of the transaction and the size of the merchandise. But as consumers made staying healthy and safe a higher priority than car buying, auto dealers proved they could be resilient and creative to survive.
Adapting to the new reality, auto dealerships made major investments in making virtual and online car buying convenient in order to attract potential car buyers. It was an important shift as consumers settled into new, at-home buying behaviors. But now that economies are recovering and re-opening, auto marketers and dealers are faced with getting consumers excited again about purchasing a car.
Getting Consumers Back In Car Buying Mood: No Easy Task
Car sales are expected to continue falling well into the summer before they start improving, according to Wards Intelligence, signaling a long road to recovery in the coming months. Cox Automotive says dealers can expect inventories to remain tight throughout the summer and possibly for the rest of 2021.
However, dealers are saving money by holding less inventory, and cars are selling faster, at higher average prices. The typical new vehicle spent about 56 days on a dealer lot in October, a 27% drop from the same month last year, according to car-shopping website Edmunds.com.
The amount of deals being pushed by automakers a year ago as they tried to counter the losses inflicted by pandemic-related closures are mostly gone, but for now, manufacturer websites indicate incentives are available.
Demand for used vehicles has risen so much that dealers reportedly are running ads and calling up car owners, according to the New York Times. They attribute this spike to economic difficulty that might prompt customers to seek out a less-expensive alternative or more incentives.
Streaming Services Offer Better Reach, Insights
With skyrocketing growth in connected-television (CTV) viewing during the pandemic, it has quickly become the ubiquitous form of TV viewing. CTV basically means any TV set that is used to stream programs from the internet. According to Integral Ad Science, almost nine in 10 consumers have access to a CTV device and eMarketer projects U.S. CTV advertising will soar to $11.36 billion in 2021 and $14.11 billion in 2022.
A comprehensive omnichannel marketing strategy that includes online, mobile and, perhaps most importantly, CTV can give marketers a new level of engagement and reach at the dealer level.
This includes seasonal promotions and purchasing options available for both used and new cars. CTV and mobile are great marketing channels for engaging potential car buyers on the spot with virtual tours of the latest model or special inventory selections at nearby auto dealerships.
CTV provides better reach and measurement than traditional TV advertising, giving auto marketers the opportunity to activate data-driven video ads.
With CTV attribution, an auto dealer can measure how many viewers visited a dealership, a dealer website or even purchased a car after viewing an ad, which helps prove the efficacy of campaign spending.
Using geo-targeting, dealers can measure when customers walk into a store. This data is then connected to ad exposure to measure conversion rates of CTV/OTT (over-the-top channels, or any channel that delivers content that isn’t traditional cable) viewers to in-store visits.
But where CTV marketing really shines is how it allows for smarter retargeting than ever before. The chances are high that your average customer owns more than one CTV device or smart television in their home. Not only has second-screening become the new norm, but a recent study estimated as many as 45% of Americans use their mobile devices or tablets while also watching television.
For dealers, an effective dedicated omnichannel strategy with integrated CTV targeting can help them:
- improve path to purchase: Only 5% of Americans are in the market for an auto at any given time, buying a new car on average of about once every five years.
- build branding and immediacy: CTV/OTT can extend campaign reach to the big screen to deliver meaningful business outcomes for auto dealers – that is, visits to their locations.
- eliminate waste: Campaign insights allow marketers to optimize their campaigns to eliminate wasted impressions and ensure they are reaching the right audience/ auto intenders.
Automotive marketers need a trusted CTV/OTT advertising partner to reach auto intenders at the household-level, track conversion and reduce wasted impressions. As brand loyalty continues to shift post-pandemic, finding and engaging potential car buyers is harder than ever.
Streaming-related advertising can help fill the gap for auto dealers to find and interact with consumers who are excited about car buying again.
Dan Silver (pictured, above left) is senior vice president of marketing for GroundTruth, a mobile advertising platform.