Moving Metal: BT And The Auto Crisis
As the auto industry stalls and sputters out of its worst year in memory, how will the crisis affect online ad planning strategies? Not only has the auto segment been among the biggest online spenders in recent years, it has also been among the most sophisticated in tracking and targeting buyer habits and online behaviors. Rarely has the in-market "auto intender" been more prized. We asked Joe Kyriakoza, vice president of national advertising solutions at vertical ad network Jumpstart Automotive Media, to pop the hood on the current auto ad market for us.
Jumpstart aggregates over 8 million unique across major brands like CarandDriver.com and Vehix.com. For more on this topic, join us next month at OMMA Behavioral where we assemble a panel "Saving Detroit One Auto Intender at a Time" to explore BT approaches to this specific marketing problem.
Behavioral Insider: How has the current downturn and auto industry crisis affected thinking about BT?
Joe Kyriakoza: That more money needs to be spent toward people who are in market. Concentrating on the people that are actually ready to buy -- or within a few months of it -- is where everyone's focus seems to be.
BI: How does that change the typical plan that you have seen until now?
Kyriakoza: The larger, splashier home page takeover, bigger brand awareness types of initiatives won't go away but definitely will be in smaller demand. The more lifestyle-oriented media plays are probably struggling a little more than in-market players like us. They are having a harder time justifying the need to target baby boomers through some ad network or content site. Lower funnel media, whether it is search engine marketing or classified type listings, or in-market media like JumpStart or Edmunds, become the standard -- and the way in which money is most smartly spent. Now it is the focus.
BI: Even lower down the funnel, does it also change tactics?
Kyriakoza: It has grown more complex because there are more targeting criteria being requested. I may want to reach not just SUVs but luxury SUVs. These are the kinds of things we are starting to see more of. They want the auto shopper that is in the right segment within the right competitive set.
BI: What behavioral layers are your customers requesting most?
Kyriakoza: It mirrors the contextual opportunity. We can go down to a specific model. If you only want to target people who have shopped the Toyota Camry, that is a possibility and it can get down to a compact shoppers in New York. We have created scale by developing partnerships with numerous non-auto sites to follow our users. We have 75% reach of the rest of the Internet.
BI: Do you distinguish between of behavioral targeting in the context of your own sites vs. out-of-context occurrences on the network?
Kyriakoza: We have seen very comparable performance. The more important thing to do is develop a frequency with your message by doing both. There is some disadvantage to restricting yourself to in-context. In an auto shopping environment, the consumer are more preoccupied with the actual shopping and not necessarily your advertising, and there are many other advertisers.
In tandem, when you are able to re-message them behaviorally, there is that reminder that reinforces the brand message or incentive. We can back this up with research that says, when you take behavioral and contextual targeting together it is so much more effective. It increases consideration awareness and purchase intent so much more than doing one or the other isolated in a silo.
BI: In talking to buyers, is BT benefiting from the downturn?
Kyriakoza: People are definitely looking at BT now as a much more efficient outlet for them to spend their media dollars because that audience is so finite now and so coveted. This is the world we live in right now. They need to sell cars and move metal now because things couldn't be more dire.
BI: Is pricing being affected by budgets?
Kyriakoza: Pricing has been relatively flat. Ad networks are demonstrating some behavioral capabilities that may be similar. So there is a bit of a pricing crunch when compared to ad networks because of the low cost tonnage they provide. However, our users and our behaviors are proprietary to us and that makes it a premium opportunity that is much more robust than an ad network can provide.
BI: Has the increased focus on auto intenders put pressure on defining more precisely what an auto intender BT segment really is?
Kyriakoza: Ours is pretty cut-and-dried, based solely on a consumer's shopping behavior on any of our in-market sites. It's not based on search keywords or an enthusiast Web site that is about fixing cars... It is specifically based on someone going to an auto site, researching a specific type of vehicle and make or model.
Most of our advertisers are asking for multiple layers of targeting. They are saying, give me truck intenders or Ford intenders. We know that the precision is the most important thing that we have. There are companies that loosely define what an auto intender is. When you look at how ad networks are able to drive price down, a lot of it has to do with the validity of the in-market shopper they supposedly are bringing to the table. We open up the back end for them to see exactly what we are giving them. We just have been able to scale it.
BI: Is there any visibility into spending this year?
Kyriakoza: We had a healthy upfront season. It wasn't a dramatic drop but pretty normal for us. For this calendar year we booked a very good base of inventory at the end of 2008 for 2009. And from all the major brands. We are heading into a questionable scatter market. What happens from here is anyone's guess. We have developed an internal think tank in the company called Strategic Insights Group that is solely focused on taking all the behavior data we have and being able to talk about what it all means to their bottom line. Our traffic actually mirrors sales and we can turn that into actionable analysis to make their business smarter.
BI: Have you gleaned from behaviors on the site whether people are buying cars differently now?
Kyriakoza: It is in line with sales. In the summer we saw huge spikes in the hybrid and coupe and compact and sedan categories when gas prices were $4. We saw it tail off towards the end of the year as gas prices came back down. We're seeing more traffic to used and certified pre-owned inventory, which we anticipated.
The repeat visitors and time spent on site is pretty much the same. We are driving more page views right now per user sessions because there is so much more information. There is technology, diesel vs. electric. There are so many different things that people don't understand as consumers, it causes them to spend more time and turn more pages and try to educate themselves.