Social marketing and the automotive industry

I  just found this interesting article discussing the move of the automotive industry toward direct marketing, particularly online marketing.

Timeliness and depth of information are the major constraints faced by advertisers in the automotive industry. These constraints are easier to break when using online marketing channels. Not surprisingly the tourism Industry, which to some extent faces the same constraints, is one of the most active online.

The article could have highlighted two important online channels – social marketing and search engine marketing. While the “conversation” has moved from the “brand” to the “consumers”, we find it crucial to offer product reviews, service centres reviews… and all actors in the industry should listen to the conversation and “manage” it when possible, be it on Facebook, Myspace, blogs or forums. The brand just doesn’t have the monopoly of the communication anymore, and consumers are increasingly making purchase decisions based on peer reviews.

Timeliness sometimes is so hard to manage that pushing the information to the consumer becomes far less valuable than being there when the consumer needs products / services. Search engine optimisation and search engine advertising are the brand’s best weapons to answers consumers’ enquiries online.

Overall, the author emphasises this, one channel is not better than another, they all have their specificities (price, audience, information, tracking capabilities…). What really counts is the choice of the information the marketer wants to convey via each channel, and the mix of channels that she or he chooses to use.

At CarbonBlack we’re using all possible channels to engage a relationship with consumers looking for tyres and servicing. Whilst consumer acquisition is one thing, we also need to make sure we’ll be around when the consumers need new tyres in 2 or 3 years.

Huge rises in traffic to online auto websites

Business researcher Frost & Sullivan’s 2007 Australian advertiser survey shows that online classifieds will command an increasing share of the key organisations’ marketing strategies and budgets. Although automotive and real estate advertisers typically have larger classifieds budgets than employment advertisers, they spend less online but this is predicted to grow significantly.

Among the benefits advertisers cited for choosing to advertise online was that online classifieds increased leads and increased speed to market. This was particularly relevant for automotive (such as carsales.com.au and drive.com.au) and real estate advertisers.

According to the Interactive Advertising Bureau and PricewaterhouseCoopers, classified ads were the fastest growing part of the online online ad market in the March 2008 quarter, with growth of 34%. This was closely followed by the online search and directories advertising category which grew at 31.5%. The online ad display market was up by 21% over the same period.

B2C lead generation – what’s the best mix?

Yesterday Marketing Pilgrim released an interesting diagram showing which marketing techniques companies preferred to use to connect with their online prospects.

While I am surprised to see Search Engine Advertising behind Search Engine Optimisation (SEO) and Email Marketing, I think the risk of such an article is that online marketers may focus on only 2 or 3 channels to generate online leads.

When it comes to promoting tyres, the spectrum of marketing options is somewhat limited…..tyres are NOT sexy, people don’t buy tyres like they buy a DVD, and generally people are not data hungry when purchasing tyres. Consumers want to only hear about tyres when they need them – about every 2 years.

Our message is clear: CarbonBlack saves you time, money and pain when purchasing tyres…but like many services, it is difficult to promote in some channels because the promotion must be timely – currently the primary attribute (when purchasing tyres) that really “talks” to people is price. (This is only because the average consumer does not know how to compare quality, which is a big topic we’ll leave for another day).

A marketing portfolio is much like an investment portfolio. You need to understand how each channel supports the others – or in investment speak – you need to understand the correlations between asset classes and how this fundamentally optimises your return on investment. The challenge is in all of the testing and measurement required to determine an optimised marketing strategy that maximised your marketing ROI.

Here at CarbonBlack we explored most marketing channels and have found that cost effective promotion should include affiliate marketing. The blog you read today is the tip of an iceberg of “viral / social marketing”. We enjoy the timeliness and control of Search Engine Advertising and are ahead of selected manufacturers on GoogleTM when you search for “buy kuhmo tyres” thanks to our SEO implementation.

You got the message; it’s all about the right mix, not about the right channel.

• We need to promote our tyre dealers – we use contextual advertising and optimise their listings on CarbonBlack so that they return well on search engine results pages

• We need to find consumers when they need tyres – our ads display on niche sites to reach the auto aficionados, and we’re in front of people when they search for tyres on the search engines.

Here’s the plan:

1. List all possible marketing channels
2. Evaluate the fit between these channels and your business / product / service attributes
3. Choose and try channels
4. Review success and track metrics such as cost/click, cost/conversion, cost/sale
5. Adapt your marketing strategy

It’s a cycle, and we go through it every six months at CarbonBlack.

Marketing strategy should be the ground for all media buying decisions, and I encourage you to read these two quick but good articles about marketing strategy from John and from Seth.

Before CarbonBlack expands to all things auto, we remain a tyre website generaing millions of dollars in consumer leads for our members (the tyre dealers) – and we do this even without the traffic of other major websites with meager conversion rates.

Online pursuit of tyres is no longer tiresome

Sydney, 29 November 2007 – CarbonBlack TyreXchange (CarbonBlack) today announced the launch of its independent CarbonBlack Tyre Scorecard. The new quarterly report details consumer tyre purchasing habits featuring data gathered at the point-of-sale on http://www.carbonblack.com.au. The CarbonBlack Tyre Scorecard explores pre-purchase consumer triggers for tyre brand choice, brand substitutes, brand preferences and performance feedback. The longitudinal study of consumer behaviours will track the impact of tyre branding activity over time and examine the performance of many existing tyre industry marketing strategies. The October 2007 edition is the first report in a series of high level summaries focused on the automotive industry.

According to CarbonBlack’s founder and managing director, Ms. Jodi Stanton, “Our research indicates that the marketing strategies to tyre consumers undertaken by tyre manufacturers, and distributors vary widely,” Ms Stanton said.

“Obviously some of those strategies are working while others are not – which means marketing expenditure is not being properly targeted. Our research will help direct marketing activities to minimise the risk of missing consumer purchasing triggers, previously difficult to do with more traditional marketing channels such as TV and radio”.

Amongst a wealth of information, the independent report identified:

• certain brands experienced far greater loyalty than others;
• consumers increasingly relied on other consumers to influence their purchasing decision;
• many consumers had reasonably high probabilities of switching brands given the right influence;
• no single brand produced greater than 60% support when considering purchasing that same brand of tyres again (refer graph 1);
• marketing campaigns can produce swings of up to 14% in brand awareness with consumers (refer graph 2);
• the most in-demand tyre requested by purchasers does not even factor on the list of most recommended by tyre dealers (refer graph 3 and 4).

For Stanton the unique aspects of the report will enable the tyre industry to understand what is involved in the purchasing cycle. “Our data is sourced during key stages in the purchasing decision making process when consumer intentions are aligned with their behaviour rather than intention,” she said.

“The report provides ongoing information about the value of brands of tyres in the Australian market that has been collated from information sourced at the time of transaction, from consumer profiling and surveys from consumers actively in the market to purchase tyres.

The results are a fascinating and an extremely valuable representation of the pattern of buying and the actual triggers used by consumers – it is not the theory that a general buying survey might generate,” Ms Stanton explained.

“This will allow tyre industry marketeers to assess the performance of their current messages and also allow them to compare performance against competitors. “

Consumers are growing more sophisticated each year. However, marketing messages tend to be more around umbrella brands and price based promotional campaigns versus specific product differentiation, leaving consumers with little choice but to focus on price.

The first in a series, the CarbonBlack Tyre Scorecard will be followed by reports covering industry issues such as pricing and promotional strategies and channels to market.

The next edition of the Scorecard (January 2008) will be released in February 2008.