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The increase in consumer power services: Trends for new on-line vehicle trade

The increase in consumer power services: Trends for new on-line vehicle trade

The theme of this series of articles is disturbances in and affecting the automotive industry. This article is intended to explore the intersection between the development of new vehicle trading behaviors, changes in video consumption and new challenges local dealers face as they move into and through the next phase of pandemic recovery.

While retailers have had a tailwind to a “seller market” for the past 18 months, mainly due to pent-up demand for the covid pandemic, recent political and economic trends and similar consumer sentiment are threatening to dampen demand in many sectors, including the automotive industry.

When retailers look to increase marketing to customers, how has the landscape changed after the pandemic?

With new car stocks still scarce and customers becoming increasingly comfortable shopping more of the online shopping process, there is a declining propensity for a customer to choose a particular store based solely on factors such as location and inventory. Without the traditional drivers, customers will choose their dealer according to other criteria. Although this can be as simple as name recognition or the location of the stores, factors such as trust, competence, easy transaction and connection to the community are becoming increasingly relevant. The most important thing is that your point of difference must be communicated early in the shopping process, as opposed to when a customer comes to your doorstep.

Nothing has the power to tell this message more strongly than video, and at the same time as the changes that have taken place in the automotive industry, there have been equally dynamic changes in the way dealers can deliver video.

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This brings us to our second disturbance. Video consumption patterns and technologies changed dramatically during the pandemic. Beyond YouTube, Facebook or video on your website, streaming video (or OTT) replaces the traditional engine of branding and increasing demand that was once commanded by broadcast advertising and (before that) newspapers and print media.

The pandemic quickly accelerated the growth of streaming services such as Netflix, Hulu, Disney + and a number of others. A few quick statistics;

  • Nearly 30% of US consumers cut the cord in 2021.
  • Almost all Americans aged 25-34 have access to TV content via the Internet;
  • 78% of people watch online videos every week, and 55% watch online videos every day.
  • As of 2022, the average person is predicted to spend 100 minutes per day viewing online services.
  • 72% of customers said they would rather learn about a product or service using video
  • Viewers keep 95% of a message when they see it in a video, compared to 10% when they read it in the text (Insivia)

Streaming video advertising offers many unique advantages over traditional TV and alternative video delivery methods.

Unlike traditional TV, streamed ads can not be easily skipped or rolled over, with a display frequency approaching 99%. This means that they offer a level of engagement that has not been seen since the days before the channel changer was invented. Compare this to a product in short form like you tube where 95% of people click and skip the moment they can. Or facebook where users quickly browse through the content.

Streaming advertising not only allows you to target your ads to exact demographics and geography, but to accurately target your desired customers by choosing from thousands of data points related to customer behavior.

To put it simply, you are targeting the customer, not the channel.

You can play service messages to consumers who already own your type of vehicle, or target customers in the market for your brand, a competing brand or other criteria related to where the car customer is in the decision making process and the recent actions they have shown online.

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New developments make it possible not only to target viewers to the household’s IP address, but also to the actual device ID where they view the content. This means you can target mom and dad in the living room while skipping the kids in their bedrooms. There are new ways to track the effectiveness of the content and the subsequent actions that viewers take. For example, you can track how many customers visited your site within five days of being exposed to an ad impression, and what actions or conversions occurred during that visit.

Streaming advertising (sometimes referred to by ad sellers as OTT, which stands for content provided ‘On top of (traditional) TV’ services) is sold in a variety of ways, by a variety of providers. Within the “streaming” subset; ads can be delivered on Connected TV (the large screen on the wall), or via tablets, laptops, desktops and mobile phones. The segments can be further divided according to such criteria as “entire episode programs” (traditional TV series), short form clips, pre-roll, mid-roll and more. I recommend working with someone who has access to the entire inventory and who can impartially recommend the best solution for your needs and market. For example, the products we offer work from 6000+ data points, and we regularly test and modify campaigns to produce the right balance between completed impressions and clicks on the site.

Conclusion: The pandemic has led to many changes in our lives and the way customers choose to do business with their local dealer. The growth of streaming video from consumers combined with pre-targeting, delivery tools, more precise tracking and attribution provides a powerful new tool for retailers to reach and engage this new type of customer.

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