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As car sales continue to plummet, marketers are tasked with convincing a smaller pool of consumers to buy. Tie that to reduced marketing budgets, and the challenge to tie offline consumer behavior with online digital marketing has become somewhat overwhelming.
While car sales declined for the majority of the brands in the first quarter of 2009, search queries rose on Google. In fact, vehicle shopping-related queries rose 14% during the three months, spurred on by people looking for specific makes, models, prices and integrated technologies.
While greater adoption of digital tools, longer search queries and user-generated content have prompted great change, the biggest problem that automotive marketers face has been connecting offline purchases with online efforts. "We now understand the types of keywords people use at specific points prior to purchase," says Davang Shah, head of automotive marketing at Google. "Six months prior to the purchase, we see roughly 56% of the auto searches buyers conducted were on non-branded search terms such as fuel efficient or hybrid sedan."
Interesting is the shift from six months to one month prior to purchase. Fifty-two percent of auto searches were branded, meaning search terms shift to specific makes and models. It can guide the process by which marketers are connecting with consumers at different points within the purchase process.
Search plays a critical role throughout the purchase process. About 25% of new vehicle buyers who visit an OEM Web site six months prior to purchase were referred by search at least once. One month prior to purchase, 43% of new vehicle buyers who visited an OEM Web site within the month of purchase were referred by search at least once.
The data, related to paid, organic and display advertising as well as online marketing, includes the facts that 68% of buyers visit a manufacturer's site in the six months prior to purchase, and 77% visit a third-party site. In aggregate, 84% visit at least one or the other.
About 70% of new vehicle buyers who visited an OEM site in the six months prior to purchase used the "build-your-own" feature. Marketers can analyze their online marketing strategies to drive more consumers to complete these actions knowing that buyers perform this function online.
Shah says Google will cut the data by brand and provide the information to manufacturers, dealers and third-party companies. Polk, which captures data from U.S. vehicle registrations -- as well as Compete, which compiled the click-stream data from about 2.2 million people who opt into the panel -- comprise the findings. A third-party company compiled the information. The two years of data in aggregate gives carmakers data to make more informed advertising decisions. The findings consider consumer behavior six month prior to confirmed purchases for about 60,000 matches.
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To date, we've yet to put a thumb on the value of branding that comes from non-branded search. There is definitely some there, its a question of how much. The question I tell everyone to ask themselve is whether someone search for something that they don't know exists? The answer is no. You then have to ask yourself how did they know Hybrid Sedans existed, which we know was through News, PR and traditional advertising.
Google is nothing more than a bucket to catch what other mediums initiative. It is a pull medium and therefore cannot exist with some push medium driving the pull.
Gregg Alvarez makes the right inquisition here...what precededed and triggered these "searches" higher up the funnel? That is something we all need to shoot for and it is great that companies like Polk and Compete are helping us get there.
Also, Tim, the decision to pull back on unbranded terms is only supported if we considered brand development to be a losing proposition. Branded searches will always convert better, but the question is how did they learn about your brand in the first place? A .68% conversion rate would certainly beat out most banner ads. Too bad the study came out when it did, we could probably learn a lot about hybrid cars now that the Insight is launching and the Fusion hybrid is becoming available.
I have to agree with Mike Kelly's comments, as this shows the limited value that non-branded search provides in the process of an automobile sale. Those non-branded terms such "fuel efficient" and "hybrid sedan" didn't deliver on advertising effectiveness very well.
In reviewing this data, so long as I am evaluating it right, 25% of the 60,000 conversion matches had a search touchpoint six months out. That would be 15,000 conversions driven by non-branded term exposure or a 0.68% conversion rate from the 2.2M sample.
This study seems to suggest that automotive manufacturers need to pull back their aggressive bids on non-branded terms and re-align their marketing dollars in other online and offline avenues that will deliver advertising effectiveness in excess of 0.68%. The automotive manufacturer certainly shouldn't go quiet on non-branded terms, but cutting their bids appears to be advisable based on this research.
Also confirms that search alone is not the best strategy but part of an overall strategy that should include dsiplay and offline.