Submitted by Michelle Boczonadi
February 28, 2020
This NADA Show was one of the most exciting in recent memory: great energy, strong attendance, standout speakers, and a showroom floor absolutely buzzing. As I was walking the NADA Show floor to speak with auto marketers from around the country, I encountered three recurring themes that will likely pique the interest of Auto marketers.
The Auto Industry is Strong
After a few years of plateauing sales, it's important to remember that the auto industry is still strong. Patrick Manzi, NADA's senior economist, said he's expecting sales around 16.8M in 2020. Manzi says we’ll also likely see growth in off-lease numbers continue to feed inventory for certified pre-owned (CPO) and used. While we are no longer seeing the strong YOY growth we experienced the past few years, Tom Libby from IHS Polk forecasts new car sales in the mid 16M per year for the next 10 years.1
Lower-funnel Video has its Limits
We saw a huge splash in the hyper-targeted, lower-funnel video space: Cars.com with Fuel; Force Marketing with Drive; and Dealer.com with Video Advertising + Creative. Advancements in technology and targeting allow these video products to target people ready to buy with dynamic video creative. And although these are smart solutions have a place in a dealership marketing mix, it’s wrong to assume that they are easy replacements for TV and Digital TV (Over the Top, Connected TV, Video on Demand, etc.).
These shiny new products should be looked at as an alternative to traditional SEM and display, not traditional or digital TV as some of these video products would hope you believe. They are targeting those few consumers who are very low in the funnel. This is an important audience, but it is very limited in scale and extremely expensive--we're looking at CPMs in the $100-$200 range! Smart auto marketers are utilizing The New TV as a foundation for an overall video strategy and stacking these smaller targeted audiences on top for a full-funnel solution that drives the greatest reach and targeting.
Audience Targeting is Here to Stay
This may sound like old news to some, but it was just a few years ago that we were looking at basic demos like age and lifestyle groups. Many companies and dealerships are now mobilizing data in more advanced ways and getting better at finding their audience. I'm impressed with the way dealers are utilizing their first-party data to inform smarter marketing decisions. Just remember, not all data partners are created equal – make sure you're evaluating methodology and data sources closely.
If the NADA Show is reflective of what to expect in 2020, there’s a lot to be excited about. We’ll continue to see advancements in data, technology, and retail experience that will make the industry smarter and more consumer-centric. It reinforced that we’re on the right path at Effectv: activating viewership data and developing smart audience solutions that create better business outcomes for our auto partners.
I look forward to a great 2020!
Source: 1IHS Markit, Projected Total New Light Vehicle Sales