• by Karl Greenberg , Staff Writer, November 6, 2015

Auto dealers are a lot smarter about marketing now than they were a few years back. Many have social media staffers now, not just digital sales people who fished for leads and handled CRM email. But at the rate the digital universe is expanding, and consumers are darting to new channels, they might want to hire teenagers. One company that navigates this space is Dealertrack Technologies. That company has also gotten a whole lot bigger since being acquired by Atlanta-based media giant Cox for $4 billion. 

Andy MacLeay, director of digital marketing for Cox Automotive software unit Dealer.com, says that, from the consumer side, it's about old-school trust, which used to be pretty much an oxymoron when it came to the dealership experience. Not so much anymore as automakers like Ford and GM are working to streamline the process, and dealers are embracing what MacLeay says is a more Amazon-like experience. 

“We are seeing the benefits of that. Leads coming off of digital retailing have closing rates somewhere on an average of 30%. Dealers who have used digital to shorten consumers' time waiting in dealership have seen a big increase in that rate.” These dealers are shortening the unsavory process of signing paperwork, by allowing consumers to do a lot of it online. “We have seen lots of research that shows essentially the joyous experience dwindles when you leave a customer waiting around in an office.” If you eliminate that, profitability goes up because it builds trust because they can walk themselves through the process. “It's like Amazon, where you buy a new TV and you see what else people have bought who purchased that TV.” 

This is not, to be clear, buying a car online, which will probably not happen in the near future because the automotive experience is visceral and cars are the second-most expensive thing consumers buy. You don't test-drive a refrigerator. “I don't see the traditional dealership model going away. Seventy-two percent of still want to see the vehicle in real life. And 61% still want to test drive,” says MacLeay. 

Dealers are also a lot smarter in terms of digital marketing. MacLeay, who will be a panelist on a dealership marketing panel at MediaPost's first automotive conference on Nov. 9, says that in the past four years, the sophistication of dealer clients has skyrocketed. “When they come to our events they have true digital marketing subject experts asking tough questions. The education level has been astounding. And there is a trend of them moving more and more dollars over to digital, which is de facto mobile. And there is a challenge inherent in screen resolution sizes. "Mobile has been a focus for several years. But what we need to know is where are shoppers using each screen resolution size in the shopping process. For us it's optimizing against that." 

The demands of the digital dealer business have changed along with the morphology of the purchase cycle, which traditionally ended at the bottom of the funnel, but now continues beyond as digital relationships, and that makes social media and social video an opportunity to keep consumers engaged with dealers and OEMs. "As an industry, for a long time we focused on getting customers into the dealership, selling the vehicle, and that ended the process. The next step is how we continue to market and make them feel engaged, and we have so may more opportunities to create an experience throughout the vehicle ownership period."

He says the magic “pixie dust” is hyper local targeting across broad-swath campaigns, to make sure campaigns are optimized at each rooftop. “We have localized campaigns across thousands of dealers, and managed that.” 

OEM's clearly waste money if they are spending big dollars on large scale brand and product awareness campaigns, but without coupling that with local media. If they don't connect the chain down to retail, they are spending money on a tow truck with no hitch. “They would buy a Super Bowl ad [and extend it to national digital campaigns], and that was kind of where it ended,” he says. “Now they realize they have to couple that up with a buy across their franchises, because when campaigns are disconnected, you see higher bounce rates.” 

The next nut to crack? Providing for dealers and dealer groups relevant video content at an affordable cost, with automated buying, as digital video is the fastest growing channel. MacLeay notes that Facebook is now in the space. So is BuzzFeed, having created a digital video ad division. “We have proprietary machine learning for real time bidding, our own DSP (demand-side platform); so how we use that for optimizing campaigns for our dealers and broadening that with video, that's the challenge. And then, of course, we are already sort of dabbling in native ad formats for tier three.”

The struggle is limited budgets and how best to use them to optimize for best performance. “If we had unlimited budget it would be easy, but where it gets tricky, where we have expert analysts, is where we optimize channels based on performance. If you have a goal of having a percent impression share, we know paid search begins to get expensive after 80% impression share. You can augment that with retargeting, a good network display or premium display buy.”