For the longest time, sales leads have been the standard benchmark for measuring the effectiveness of marketing activity in the automotive industry. Leads have always been seen as the holy grail that determines whether a dealership’s marketing mix is effective or not, playing a significant role in determining where and how future marketing resources are allocated.

However, with innovation comes new insights.

As numerous studies, and most recently on-the-lot consumer research commissioned by autoTRADER.ca have shown, leads don’t really tell the full story of how well any particular marketing effort is performing. In fact, what the research — conducted this past summer with close to 500 visitors at 30 dealerships across Canada — revealed is that nearly 70% of auto dealership traffic is driven by walk-in customers who have never submitted a lead online, even if that is where they’ve done most of the research for their car buying journey.

When digital marketing first began to be embraced within the automotive retail sector 20 years ago, marketing agencies and technology suppliers knew they had to focus their own value story around tangible outcomes that could be perceived to be linked to vehicle sales and help dealers see a positive return on their investment (ROI).

Thus, was born the age of “Internet Lead Generation” or “I-Leads/E-Leads,” in which dealers would invest many thousands of dollars and out the other end would come names, phone numbers and email addresses that could be given to sales floor staff to let them go to work and get more cars rolling off the lot.

Over the years, education events and conferences in the automotive industry have sought to educate and help retailers better understand how to navigate the complexities of digital marketing and online lead generation, which many dealers were still struggling with.

These events fostered an opportunity for automotive dealers to better understand and use available technology to develop digital strategies and techniques to improve their sales and profits.

However, while these programs may have helped point dealers in the right direction in the early days of the internet and alert them to the potential value of incorporating digital and online marketing into their overall mix, over time, they have come up short in forging a direct link between marketing activity and final sale.

The challenge our industry faces today is not a shortage of available technology or sophisticated digital experts to help execute a marketing strategy, but rather a lack of effective methodologies to definitively measure digital marketing ROI by directly linking such efforts to vehicle sales.

Along with the evolution of digital technology over the past two decades, the consumer, too, has grown to better understand and critically navigate the various digital channels available to them when going through the process of making such a major decision as buying a new vehicle.

As such, today’s consumer behaves very differently than the consumer of 10, 15 or 20 years ago.

In particular, a general reticence on the part of consumers to provide personal data or even a slight level of pre-purchase commitment to any business or organization with which they are not already engaged is much more prevalent today than even just a few short years ago.

Recognizing the longstanding — and frustrating — challenge of developing a reliable lead attribution model in the automotive industry, autoTRADER.ca has sought to create a solution that yields greater transparency and reliability than has ever been achieved before in attributing consumer online activity within our online automotive marketplace directly to their offline purchase behaviour.

To do this, we invested in proprietary sales match capability that we hope will improve the conversation from merely just considering a small portion of the market who might still submit a lead in advance of their showroom visit — to understanding the entire spectrum of their sales outcomes at the end of the month.

Stay tuned for more on this, as we continue to look at new ways to unravel the complexity of ROI attribution for dealers in 2020. 

Nuno Loureiro is director business intelligence at autoTRADER.ca