Since 1995 when AutoWeb (formerly Autobytel) pioneered the automotive Internet, digital auto leads have been an integral part of dealership sales throughout the U.S. For over 20 years, traditional leads - those in the form of make and model of interest, a consumer's geographic location, and pertinent contact information - have become a staple in today's dealership operations.
Historically, much of what was required to satisfy car buyers on their journey to their next purchase was an easier shopping and buying process facilitated by the convenience of the Internet and the abundance of information they could find online to make the most educated car buying decisions possible. For dealers, digital car leads have long been a cost-effective sales and marketing tool compared to other tools such as traditional print and broadcast advertising which bring a higher cost and whose campaign successes are much more difficult to track.
In addition to enjoying plenty of success these past two decades, digital automotive has transformed an entire industry. However, the automotive landscape is changing. Cost per vehicle sold is too high, margins are low, and there are prevalent affordability concerns and peak auto concerns. As the landscape changes, the needs of consumers and dealers are changing, too.
Today's automotive industry is complex. For example, interest rates have steadily been on the rise and according to industry reports, if the rate moves to a range of 2.75% to 3% by next September, consumers will pay more than $6,000 on average, in interest alone, to finance a vehicle. What's more, manufacturers are significantly cutting incentives. Both of these factors stand to impact the affordability of cars for consumers.
Digital media is changing, too. Ever-evolving trends in retail, search, and mobility make it increasingly difficult for automotive brands to stay ahead of the curve to drive car sales leads for salesman at their dealerships. Tools such as image search, voice search, facial recognition, and the Internet of Things (IoT) create new challenges for marketing professionals at both the OEM and dealer levels to connect and engage with larger volumes of consumers.
Finally, car buyers are more complex than ever. Today, brand loyalty is low, price bands have narrowed, quality bands have narrowed, and make/model/trim combinations have skyrocketed. In 2018 alone, there were more than 2,642 combinations - over 11,000 in the past five years.
The end result? Consumers bear the brunt. An efficient path to purchase has been replaced by a largely inefficient one and an enjoyable car buying experience has been replaced with a less-than-ideal one. Simply put, today's car buyers lack fundamental clarity about their ideal make and model and their mobility needs are not understood and, ultimately, not met.
Because consumers are unique, brands are unique, and dealers are unique, the future of our industry relies on evolving beyond Internet car sales leads as we know them to a matchmaker marketplace - one that is more data informed to ensure a superior customer experience and one that facilitates a better understanding of the needs and wants of consumers so they can be matched with a dealer that is well positioned to meet those needs. In today's environment, consumers make automotive buying decisions based on dimensions beyond just product, price, and brand loyalty. In fact, McKinsey research shows that 90% of consumers make purchasing decisions based on their shopping experience, not on any form of loyalty1, highlighting the importance of buyers and sellers sharing expectations around how the car purchase transaction should be managed.
This matchmaker marketplace - and the marketing campaigns that drive it - should provide detailed attribution (not in the traditional attribution sense). Instead of telling a dealer that a consumer bought a car in 90 days, attribution should show a dealer the true value of participating in this new matchmaker marketplace by demonstrating exactly how his or her monthly sales goals were met.
While our industry is certainly in the midst of a revolution beyond dealership leads, as we know them today, one constant that remains is the importance of third party digital media solutions partners like AutoWeb.
For starters, it's virtually impossible for dealers to reach the sheer volume of high quality, in-market automotive consumers a digital media partner can reach when it comes to marketing dollars. What's more, emerging technologies such as voice search, facial recognition, and IoT involve the expertise of specialized digital media professionals. Finally, the data points, AI tools, and audience analysis required to truly understand car buyer needs at a deep and meaningful level - as well as the data required to connect them to dealers who best meet those needs - involves leading-edge tools that media solutions partners bring.
Consider the following statistics:
With the ever-changing needs of today's dealers and consumers, the current complexity of our industry, and the new and emerging challenges OEMs and dealers face to engage with more car buyers, it's easy to see why car sales leads are in the midst of a revolution (and arguably should be!)
1. David Court, Dave Elzinga, Bo Finneman, Jesko Perrey, The new battleground for marketing-led growth, (McKinsey & Company, February 2017) https://mck.co/2htEwhI
2. Jayson DeMers, Why you need to prepare for a voice search revolution, (Forbes, January 2, 2018) https://bit.ly/2ClmKoS
3. Allied Market Research, Facial Recognition Market Expected to Reach $9.6 Billion, Globally, by 2022 (June 2016) https://bit.ly/2pXJrrS
4. Jonathan Camhi, BI Intelligence projects 34 billion devices will be connected by 2020, (November 2015) https://read.bi/2PjrHCz
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