Advertising/Marketing

J.D. Power Acquisition to Expand ROI of Digital Ads

WESTLAKE VILLAGE, Calif. - 

Billions of dollars are spent each year on digital marketing, and J.D. Power intends to measure the link between that marketing and actual vehicle sales.

On Wednesday, J.D. Power announced the acquisition of Korrelate, an Orlando-based company that measures consumers' online behaviors and links them to offline sales activity. 

By combining Korrelate's privacy-safe method of matching anonymous online behaviors with J.D. Power's Power Information Network new- and used-vehicle retail sales data, company officials say the result will be a timely, in-depth and transparent measurement of digital marketing effectiveness.

"We are delighted to add Korrelate and its cutting-edge capabilities to J.D. Power," said Finbarr O'Neill, president of J.D. Power.

"Consumer behavior is changing dramatically in today's Internet-powered world. The auto industry spends billions of dollars annually on digital marketing. Measuring online activity and linking it to actual vehicle sales will enable marketers to measure and optimize their digital strategy," he said.  

Combining the two company’s capabilities, J.D. Power will be able to identify which websites and ad campaigns shoppers are exposed to before they buy their vehicle.

That will allow it to measure and enhance the effectiveness of automaker, dealer and third-party websites and ad campaigns, the company said, and help ad networks and online publishers report ad effectiveness.  

Dealer Reputation Boost the Aim of New Product

BRADENTON, Fla.  - 

Dealers know that satisfied customers are walking advertisements. And in today’s digital world, online reviews have real impact on sales and service operations.

This week, eReputationBuilder launched Dealer Influence, a product which aims to encourage an increase in reviews that represent the overall sentiment of the customer, and proactively build dealers’ online presence.

Dealer Influence serves as an all-in-one automotive reputation, SEO and social media management product, company officials said.

“Our goal is to make the whole greater than the sum of its parts when it comes to a dealership’s digital presence,” said JD Rucker, founder of Dealer Authority.

“Many services today are offering little social media with their reputation management product, or perhaps some reputation monitoring with their social media product. But Dealer Influence will make search, social and reputation work together to improve each.”

The new product comes as a result of Internet marketing agency Dealer Authority’s acquisition of an equity stake in eReputationBuilder earlier this year.

eReputationBuilder is an email marketing system that encourages dealership customers to leave reviews on websites such as Yelp, Google Local and DealerRater.

The firms combined their software solutions and digital marketing strategies to create Dealer Influence, which directs consumers who say they are “not satisfied” with a dealership to contact the dealership and give staff the opportunity to remedy the situation before publishing a negative review to the Internet.

“When I first launched eReputationBuilder back in 2012, it was solely focused on leveraging our email marketing expertise to generate reviews so not to compete with other companies that were dabbling in the ORM arena,” said Peter Martin, president and founder of eReputationBuilder.

“As more and more clients signed on, we realized how big a need there is in the automotive industry for a fully integrated and automated reputation management service.

“The only components this product lacked were SEO and social media. Our partnership with Dealer Authority has closed that gap and now we are now able to offer a complete product designed specifically for the automotive industry,” he said.

 

Toyota is Tops for Social Media Satisfaction

WESTLAKE VILLAGE, Calif.  - 

Social media gives automakers and dealerships just one more opportunity to engage and interact with potential customers as well as drive consumer purchase and service decisions.

And J.D. Power’s 2014 Social Media Benchmark Study shows just which brands are most successful at reaching their client base through social media.

Toyota ranks highest among automotive brands, with a score of 845 on a 1,000-point scale. Ford ranks second with a score of 842, followed by Chevrolet at 838.

Rounding out the top five are Lincoln (836) and BMW (831).

The social media benchmark auto industry average is 824.

The 2014 Social Media Benchmark Study — Auto is based on responses from more than 9,800 U.S. online consumers who have interacted with a company via that company’s social media channel. The study was fielded from Nov. 18 through February 9.

And results show automakers might not be doing enough to reach all generations of consumers — perhaps mistakenly focusing on younger social media users.

“Auto manufacturers that focus just on reaching Millennials through social media are missing a tremendous opportunity, as social media is a channel that reaches all generations of consumers,” said Arianne Walker, senior director, automotive media and marketing at J.D. Power. “Today for the first time, we have an in-depth understanding of what helps drive satisfaction in social media interactions across generations, and not just among consumers who are highly engaged in social media, but also those who are more casually engaged with a brand through this channel.

“It is important to provide a satisfying social media experience for all consumers because it helps drive current and future business.”

The study, which is in its second year, showed 20 percent of consumers use social media as their primary source of information about automotive brands.

That means one fifth of  franchised dealerships' potential customers aren’t even making it to a dealership direct website, but rather have already made their car-purchase decisions while researching on one of the corresponding automaker's social media site.

And according to a new infographic from Kenshoo based on the results of a recent FordDirect and Research Now study, 56 percent of car buyers who contacted a dealer because of social media advertising made a purchase.

“As social loyalty and sharing grows, expect the number to grow and more automotive purchases to be impacted by social channels,” the infographic reads.

According to the J.D Power study,  the most frequently used social media marketing channel is Facebook (29 percent), followed by YouTube (19) percent and Twitter (11 percent).

Interestingly, it’s not just the automaker’s social media sites these social-savvy consumers are checking.

The study showed that nearly one-third (29 percent) of social media users get recommendations about a product or service from friends and family exclusively through social media.

Though this may seem out of dealership and automaker control, many dealerships are now using referral and review tools that encourage customers to post about their experience on their social media channel — which may create a domino effect, if the study results are any indicator.

The study also showed consumers are much more likely to buy if they are satisfied with their social media experience while searching for a car.

According to the study, consumers who are happy with their servicing and marketing experiencing “have a positive impression of the automotive brand and an increased likelihood to repurchase from the same brand in the future.”

 

Gubagoo Goes Mobile

WEST PALM BEACH, Fla.  - 

Gubagoo announced Tuesday its behavioral analytics-based chat and website engagement platform for dealer websites is now fully optimized for mobile.

What does this mean for dealers using the tool?

Gubagoo explained its dealer customers can now track and then relevantly target every visitor that hits their website via a smartphone or tablet with the free mobile tool.

Gubagoo Mobile works on any native smartphone or tablet device and requires no app downloads.  

On the other side of sales, it keeps car shoppers right on the dealership’s mobile site, and doesn't force the consumer onto another page, the company noted.

“The auto industry is just starting to talk about ‘responsive’ dealer website design for desktop. But at Gubagoo we’ve been putting a powerful analytics ‘brain’ –  which tracks, scores, and then relevantly engages every site visitor – to work on dealership sites for over a year. And now all our unique analytics, chat and engagement tools are available on mobile,” said Brad Title, chief executive officer of Gubagoo. “Very soon, mobile will overtake the desktop as the way most people access dealer sites. And if a dealer’s vendors don’t enable smarter chat and more relevant site communications on mobile, they’re throwing 30-40 percent of their traffic away.”

The company also shared some statistics that show Gubagoo Mobile’s pilot success.

The 1,200 dealerships that tested Gubagoo Mobile over the past five months noticed their mobile chat-to-lead conversion rates were higher (74 percent) than for chats happening through the desktop (71 percent).  

“When we ‘flipped the mobile switch’ on the Gubagoo platform, our dealer websites had such a surge in chats and calls, that we had to dramatically staff up our 3rd-party chat and call labs. That’s the power of mobile car-shopping in action,” said Title.

DeVere: Green Marketing to Women in 2014

THOUSAND OAKS, Calif.  - 

Men and women shop for products differently, and one of the key differences is the question of environmental impact.  Women have historically been the early adopters of all things green, so it's important to understand how “green” marketing can improve your reach with women consumers.  With Earth Day this month, let's talk a little bit about ways to bring some green into your marketing efforts, winning trust and loyalty with women.  Women consumers are motivated by causes that mean something to them, and Earth Day is the perfect time to play up the green!

Green Car Care Tips

For the service provider, utilizing green car care tips and practices to help your women customers burn less fuel, produce less emissions, and drive greener will position you as not only an expert technician, but someone who truly cares about the causes she supports.  Here are a few green car tips you can utilize in your checkups and consultations:

  • Getting a tune-up can improve gas mileage by an average of 4 percent.
  • Avoid sudden starts and stops and go the speed limit. Jerky and aggressive driving decreases your miles per gallon (MPG) and increases wear and tear on your vehicle.
  • Get the junk out of the trunk!  Extra items weigh the vehicle down and cause an increase in gas usage.
  • A cooling system thermostat that causes the engine to run too cold will lower the fuel efficiency of a car by as much as one or two mpg.
  • Check your vehicle’s gas cap. A loose, damaged or missing gas caps means gas is evaporating, harming the environment and wasting money.
  • When filling up your car, remember to stop when the nozzle shuts off! Topping off the gas tank can release harmful vapors into the environment and waste money.
  • Replace your car’s fuel filter every two years or 24,000 miles and have your fuel injectors flushed our every 30,000 miles.

Green Tire Tips and More

Another great green car tip deals with tires — reminding and emphasizing the importance of proper tire pressure will help your customers get the most MPG, and decrease wear on their tires as well.  For the savvy tire dealer, familiarizing yourself with the manufacturers who make green tires can also help you win the hearts of your women customers.

  • Michelin's Green X tires feature low rolling resistance, improved fuel efficiency, and decreased pollution.
  • Bridgestone Ecopia tires reduce rolling resistance and increase fuel efficiency.
  • Yokohama uses orange oil in place of some petroleum-based products in their tires.
  • Hankook's Kontrol Technology creates tires that will last longer.
  • Goodyear's Assurance Fuel Max tires are designed specifically to save fuel.
  • The Scorpion Verde by Pirelli is a high mileage, eco-friendly tire that's designed to increase MPG and decrease emissions.

What else can you do?

In the auto industry, the existing regulations mean you're already pretty green.  However, since to us practices like tire recycling are business-as-usual, you may not be properly educating your customers that these practices exist!  Inform your customers of your existing green practices, and augment those with a few extra small steps. 

Switching from incandescent to CFL bulbs, using recycled products in your office, or even utilizing products made of recycled tires such as flooring, mulch, and more can really help to emphasize your green-friendly stance and go a long way to improve women consumer's impression of your business. 

Take small steps to be a little greener, and before you know it, you'll be the talk of the town among women customers!

Jody DeVere is the CEO of AskPatty.com.

Equifax Examines Complexities of Online Ads for Leasing

ATLANTA - 

Equifax recently considered the difficult online advertising challenges faced by automakers, ad agencies, finance companies and dealers and how they can vary greatly by region. Analysts dissected trends from three major markets — Atlanta, Detroit and Seattle — in association with leasing potential.

Equifax found that these three markets demonstrate how complex it is to put the right message in front of optimal customers.

“A consumer may aspire to own a luxury sedan, but they may not be able to afford it, or they may need to buy a family car instead. That’s why it’s important for all of these groups to reach the right audience with the right offer for their brands and models,” Equifax’s Jeff Sporn wrote in a blog post on the company’s website.

“The easiest way to do this is to differentiate online consumers in real-time by understanding their preferences,” Sporn continued. “Many online advertisers simply focus on ‘auto intenders;’ but what, exactly, is the ‘intent’ of the intender? Auto marketers need deeper information that helps them determine whether an online consumer is more likely to purchase a luxury car versus a minivan. Or whether they prefer a loan or a lease.  Armed with this insight, auto marketers can reach the right audience. When you deliver the right message to the right consumer you can significantly improve the ROI of your online spend.”

With those considerations in mind, Equifax examined trends originating from Atlanta, Detroit and Seattle and summarized them in the chart above. This information was compiled using the Equifax IXI auto-specific digital targeting segments. The bars represent an index value indicating how much more or less likely the cities are to have the listed attribute than the national average of 100.

“We can see clearly that Detroit is far above the national average when it comes to consumers likely to be in-market for an auto lease, while the other two cities are well below,” Sporn said. “Atlanta has more consumers likely to respond to a loan offer, while Detroit is also above the national average. Seattle is well below the national average, so advertisers extending lease or loan offers could divert their budget toward consumers in the other two cities.”

Sporn went on to mention another element about Seattle that makes it unique compared to the other two markets included in this study.

“The city indexes highest for luxury vehicle owners, eco-friendly vehicle owners, and import vehicle owners. Using other measures, we know that 17.0 percent of Seattle’s population is likely to have income greater than $150,000 (compared to 11.6 percent for Atlanta and 9.5 percent for Detroit),” Sporn said. “This means that Seattle is clearly an area that luxury brands will want to target, especially foreign brands and eco-friendly models. Their ads are likely to resonate better in the Northwest than in the other two cities.”

Sporn made one last point about the important of targeted online marketing.

“It’s important to note that these segments do not include any personally identifiable information so brands are not actually targeting or tracking known individuals,” he said. “Segments are estimates of likely household characteristics built using anonymous, aggregated, neighborhood-level data.”

TrueCar Reiterates Dealer Value in IPO Filing

SANTA MONICA, Calif. - 

With a former OEM chief executive officer joining its board and paperwork filed for an initial public offering, activity is buzzing at TrueCar. That IPO paperwork filed with the Securities and Exchange Commission offered a glimpse as to what’s going on underneath the hood of the lead-generation website.

TrueCar indicated the number of common shares to be offered and the price range for the proposed offering have not yet been determined. But according to the registration statement on Form S-1 filed with the SEC, the company is coming off of a year where it generated revenues of $134.0 million and recorded a net loss of $25.1 million.

Of the $134.0 million in revenue, TrueCar noted that 89 percent consisted of transaction revenues with the remaining 11 percent derived primarily from the sale of data and consulting services to the automotive and financial services industries. Transaction revenues primarily consist of fees paid to the by its network of TrueCar Certified Dealers under its pay-for-performance business model where the company generally earn a fee only when a TrueCar user purchases a vehicle from them.

TrueCar mentioned in its SEC filing that its dealer network consists of more than 7,000 dealerships, primarily franchised stores as well as a smaller amount of independent operators.

“We typically charge TrueCar Certified Dealers $299 upon the sale of a new car to a TrueCar user,” company officials said. “In 2013, the overall industry average advertising expense per new car across all forms of media was $616, according to NADA.

“By helping dealers better target their acquisition efforts to in-market consumers using our platform, we believe that dealers can improve their close rates, which results in other operating cost efficiencies such as savings on selling expenses and inventory carrying costs,” they continued.

TrueCar recapped the challenges it has experienced with its dealer network. At the end of 2011 and the beginning of 2012, due to certain regulatory and publicity-related challenges, officials acknowledged many dealers cancelled their agreements with TrueCar, and its franchised dealer count fell from 5,571 on Nov. 30, 2011 to 3,599 on Feb. 28, 2012.

“TrueCar Certified Dealers have no contractual obligation to maintain their relationship with us. Accordingly, these dealers may leave our network at any time or may develop or use other products or services in lieu of ours,” TrueCar officials said in the SEC documents.

“Further, while we believe that our service provides a lower cost, accountable customer acquisition channel, dealers may have difficulty rationalizing their marketing spend across TrueCar and other channels, which potentially has the effect of diluting our dealer value proposition. If we are unable to create and maintain a compelling value proposition for dealers to become and remain TrueCar Certified Dealers, our dealer network would not grow and may begin to decline,” they continued in the filing section that described their risk position.

TrueCar went on to acknowledge that larger dealer groups not choosing to use its services and have a significant impact on its growth possibilities as well as its stock value.

“Although the automobile dealership industry is fragmented, a small number of groups have significant influence over the industry,” TrueCar said. “These groups include state and national dealership associations, state regulators, car manufacturers, consumer groups, individual dealers and consolidated dealer groups. To the extent that these groups believe that automobile dealerships should not partner with us, this belief may become quickly and widely shared by automobile dealerships and we may lose a significant number of dealers in our network.

“A significant number of automobile dealerships are also members of larger dealer groups, and to the extent that a group decides to leave our network, this decision would typically apply to all dealerships within the group,” the company continued.

“We cannot assure you that we will maintain strong relationships with the dealers in our network of TrueCar Certified Dealers or that we will not suffer dealer attrition in the future,” TrueCar officials went on to state in the IPO filing. “We may also have disputes with dealers from time to time, including relating to the collection of fees from them and other matters.

“We may need to modify our products, change pricing or take other actions to address dealer concerns in the future. If a significant number of these automobile dealerships decided to leave our network or change their financial or business relationship with us, then our business, growth, operating results, financial condition and prospects would suffer. Additionally, if we are unable to add dealers to our network, our growth could be impaired,” TrueCar added.

Nonetheless, TrueCar reiterated that it is poised to capitalize the growth potential of rising vehicle sales, referencing some new solutions in the company pipeline.

“In the future, we intend to introduce additional products and services to improve the car-buying and car-ownership experience. For example, we are developing TrueTrade to provide users with an estimated daily market value for their existing cars and a guaranteed trade-in price,” the company said.

“In addition, we are developing TrueLoan and TrueLease to provide users with a more convenient way to finance their cars at TrueCar Certified Dealers,” officials continued. “We are also in the process of launching a number of new services for our dealers designed to enable them to make better informed inventory management and pricing decisions and to close transactions more efficiently.”

With those elements in place, TrueCar decided Friday was a good time to launch the IPO. Goldman, Sachs & Co. and J.P. Morgan Securities will act as the joint book-running managers for the offering.

TrueCar Adds Ex-Hyundai CEO Krafcik to Board

In other company news, TrueCar announced last week that the former top boss at Hyundai Motor America has joined its board of directors.

John Krafcik, former HMA president and chief executive officer, was at the helm of HMA from 2008 to 2013, and will now become a director at TrueCar and serve as a member of the board’s operating committee.

“Very few people are credited with elevating an emerging brand to top-tier status within the automotive industry,” said Scott Painter, founder and CEO of TrueCar.

“John Krafcik is one of those remarkable leaders who has done just that over the last five years. At the heart and soul of his success at Hyundai was the trusted relationship the brand developed with its dealers and customers,” he added.

Krafcik noted: “I believe transparency is a better business model that builds trust between consumers and retailers. I want to help retailers in automotive and other industries build a bridge of trust with consumers, and joining TrueCar lets me get fully immersed in doing exactly that.”

OneCommand Releases New Customer Survey Tool

CINCINNATI - 

A new product hit the market Tuesday that has the potential to help dealers learn more about their customers and what these buyers want from a dealership.

Customer relationship management platform OneCommand revealed a new survey tool this week.

Dealer Review is a mobile responsive email survey tool, which helps dealers capture customer feedback about their recent sales or service experience.

“Over the years, we’ve had more and more dealers ask us for a tool that helps them gather feedback from their customers in real-time. With our Customer Marketing and Loyalty Automation Platform, it just makes sense to include the Dealer Review service in our product offering since we are already providing follow-up to these customers after each purchase or service transaction,” said Jeff Hart, president and chief executive officer at OneCommand. “OneCommand’s new Dealer Review solution will capture consumer feedback and provide alerts to the dealership before the situation escalates.”

Dealer Review sends out surveys to dealership’s customers that aim to gain responses regarding their visit “to address any issues, work to maintain excellent customer satisfaction, and ensure exceptional scores are obtained on the manufacturer’s survey,” the company explained.

The tool was designed in an effort to help dealers show they are committed to customer satisfaction, which in turn, can increase customer loyalty and retention.

The tool will also serve as a way for dealers to pinpoint trouble areas within the store.

 

How Incentive Spending Tracked in March

CARY, N.C.  - 

Incentive spending went up in March and will likely rise again as the spring moves forward; that much, at least, appears to be one consensus among some of the monthly forecasts making the rounds.

The implication and degree of that increase is where there are moderately differing viewpoints.

Starting with Cars.com, the company released an analysis released Monday where it pegged average incentive spending for March at $2,714. This  would be an 8.1-percent year-year-over lift and a 4.5-percent month-over-month hike.

“Weak first-quarter sales caused inventory levels to swell, and manufacturers have had to be more generous with their incentive spending in order to accelerate sales, as evident by the 8-percent year-over-year increase,” said Jesse Toprak, chief analyst for Cars.com.

“The good news is that consumers continue to prefer well-equipped models, which has helped keep transaction prices up despite the larger incentives,” he continued. “We expect incentive spending to continue to increase into the summer in a controlled manner — not with an all-out incentives war — and ATPs to stay mostly flat.”

Over at Kelley Blue Book, senior analyst Alec Gutierrez was predicting last week that March new-vehicle sales would begin to “bounce back” from two tough months to begin 2014, setting the stage for a stronger spring, both in terms of sales and available incentives.

 “Although we aren’t expected to hit 16 million SAAR, indications show that consumers are returning to showrooms in spring,” Gutierrez said.

“The momentum built in March should set the market up for a big month in April.  Those consumers that delayed a purchase in January and February will find a modest increase in available incentives, which should help to offset gains in average transaction prices,” he added.

Meanwhile, TrueCar’s analysis released last week called for a 7.9-percent year-over-year increase in incentive spending for March, putting the average spending per unit at about $2,773. This would be a 2.6-percent month-over-month increase.

“The spring thaw has resulted in a slight improvement in vehicle sales, but not nearly the improvement analysts hoped they would see,” said Larry Dominique, president of ALG and executive vice president of TrueCar. “With incentives rising at a rate four-times greater than sales, expect an aggressive final week of selling in March and an equally aggressive April. An incentive-fueled battle is on the horizon.”
 

Growth Prompts New HQ for Haystak

FORT MYERS, Fla.  - 

Company growth and a quest for an amenity-filled workspace for employees have resulted in the opening of a new headquarters for Haystak Digital Marketing, which offers products and services for the automotive industry.

The company announced completion of the refurbishment of a 15,000-square-foot site in downtown Fort Myers, Fla., in the landmark McCrory Building near the town’s waterfront. The work began in October 2013.  

"With the growth that Haystak has experienced, we wanted to provide our team members an outstanding workspace in a vibrant part of town, and make room for our expanding business,” said Julio Gonzalez, Haystak Digital Marketing director of operations. “This historic area is quickly becoming a vital place of business, living and fun for our community, and we're looking forward to being a part of the revitalization of our beautiful downtown and the continued growth of the Fort Myers area."

The refurbishment of the historic building, which was originally constructed in 1936, incorporates the latest technology while retaining the site’s architectural character, such as brick walls, tin ceiling and original heart pine beams.

The new Haystak headquarters also includes more than 10 miles of data cable and employee amenities such as ADA compliant showers, a changing room for infants, golf putting space, video gaming area and two employee lounges.

A grand opening party with refreshments and entertainment is planned for later this spring.

Haystak is part of VinSolutions, which is wholly owned by AutoTrader Group, a subsidiary of Cox Enterprises.

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