Here’s the question, why is one of the most valuable business sectors in Europe, the automotive sector, still struggling with the digital transition? The question is a little unfair, especially when considering car manufacturers in isolation. They themselves invest huge time and effort into their digital marketing activities, and appear to experiment with all the latest channels of communication. However, generally speaking, it’s the retailers that are still yet to engage with this ‘new’ type of marketing. We know it’s not new, but for the purpose of this piece, you will have to humour me.
Having worked for 3 years at one of the biggest automotive retailers in Europe, I was fortunate to acquire a good understanding of how businesses in this sector prioritise not only their overall marketing decisions, but also their business ones. As far as my experience goes, it’s fair to say I worked for one of the more forward thinking retailer groups who tried to embrace the ‘world of digital’. However, there were regular occurrences shared with those at the smaller automotive retailers, usually involving the key decision makers in business. In my experience, a lack of understanding, and in some cases belief, was common with business leaders.
I first noticed this when I attending a conference where dealer principals (branch managers) and marketing managers from retail groups made up the majority of the audience. The comments and questions asked made it clear that this sector is struggling to grasp an understanding of what digital marketing is, never mind know the opportunities and benefits it offers. This has also been picked up by the manufacturers themselves.
In 2015, one the UK’s largest car manufacturers implemented a trial where they would control all digital marketing for their cars in a certain area, preventing the dealerships from running their own campaigns. Now, for me, this would have set alarm bells ringing. If the manufacturer does not trust its dealers to promote products/services effectively across digital channels, where does it leave their marketing teams? This, in the short term may benefit smaller groups where such teams do not exist, but for the larger organisations who do experiment with digital communication and find it hugely beneficial, it’s a blow to their overall strategy and weakens the control they have on sales.
So my question is; why is this the case?
Well, I believe there are several reasons, but it starts with the marketing decision makers, whether that be a managing director or a marketing manager. In too many instances, a lack of understanding has prevented those decision makers investing their time, money and efforts in digital. For example, the next time you turn on a local commercial radio station or open a regional newspaper, see how long it takes before you notice an automotive retailer advert. Now, a multi-channel marketing strategy is certainly the best way to promote a business, service or product. However, to avoid digital marketing and opt for other channels because “that has always worked and I get it” is a risky approach where opportunities get missed and you are in danger of being left behind by competitors who do embrace new channels of communication.
There are glaring examples within this sector of businesses who have taken that ‘leap of faith,’ one being the used car aggregator AutoTrader. Originally known for its beefy magazine with hundreds of car listings, they decided to focus their attention solely online when they removed the magazine from the shop shelves in 2013. Already with a strong presence online, they have continued to dominate the used car market, digitally speaking to this day. AutoTrader has a huge advantage as it possesses the largest inventory of used stock online, albeit not actually their own products. Nevertheless, this massively aids their SEO efforts and along with the aggressive paid advertising, it’s easy to see why they have established themselves as the market leader. Other examples are certain used car supermarkets who appear to have a different approach to marketing communications compared to dealer groups (in general). The leading supermarkets have embraced digital marketing and continue to plough money into advertising networks such as Google search and display.
Why the fear of digital?
It could be a matter of too much information is a bad thing. The more data you give to someone, naturally, the more questions get asked. In my experience, no matter how positive data is, or how much insight you give, you will always find yourselves answering questions regarding negative points, or at least what people perceive as negative. This is fine, and in some cases a good thing, but when helping your audience understand the opportunities available, it can sometimes be difficult. Digital marketing is unique in the respect that it provides you with incredibly accurate data helping you make business decisions going forward. No other marketing channel offers this level of insight, yet automotive retailers still find themselves struggling to adapt.
There is a real opportunity for automotive retailers, in particular with new cars, to grab a good portion of the online market share as no one is yet to control this sector. As Google continue to push local businesses on their search engine users, it’s only going to benefit retailers, and the wealth of data available when using digital channels, it can help you make educated business decisions.