Last week, I spent time in Las Vegas at the 2014 J.D. Powers Automotive Marketing Roundtable. This event brings together the brightest and most innovative minds in auto marketing, and I always leave with new insights and tools in my auto marketing tool belt.
Boarding the plane after the conference this year, one thing I know for sure is that automotive advertising never ceases to amaze me as a “data guy.” Thanks to Big Data, and innovative companies like J.D. Powers & Associates and Polk making smart connections between buyers and sellers, digital auto marketing is more precise and measurable than ever before.
These innovations are also necessitating a change in the way we look at auto advertising. For example, car brands have traditionally broken their advertising efforts into three categories: Tier 1 (branding), Tier 2 (Regional promotion/sales events), and Tier 3 (local/dealer messaging.) But it was obvious based on this week’s discussion that these marketing tiers may begin to be reconsidered in the coming years, especially when it comes to online video advertising and the convergence of TV and Digital.
It is hard to challenge what TV can do for big brand campaigns across Tier 1 dollars. And while TV can reach a tremendous number of desired audiences on a national basis, the landscape is drastically changing when you begin looking at TV on a regional or local level. That is where digital video is really making a difference for automotive advertisers – in particular Tier 2 and 3 budgets.
Through online video, precise (but broad-reaching) targeting and measurement allow auto advertisers to “do it all.” First, the medium gives them powerful reach against desired audiences that are light or non-viewers of local broadcast, with sight, sound and motion to deliver a brand message; second, they have the ability to easily customize sales events or promotions for certain groups or certain times of year; and finally, the precise targeting and creative flexibility of digital video allows them to customize messages based on a local dealer. In other words, most digital video ads fall into the category of Tier 1, and Tier 2, and Tier 3 … all at once.
I saw this come to life in one of our recent case studies for a major auto advertiser looking to complement a local TV campaign with digital video. The campaign was meant to promote a summer sales event, but they were not achieving the reach they wanted – in fact, nearly two-thirds of the local GRPs were being delivered to just 6% of their demographic. When they added online video to the mix, they were able increase their reach substantially, as 82% of the audience who saw the digital ad had been unexposed or underexposed to the TV ad.
In addition to being a powerful argument for the use of digital video, this case study shows that tiers are evolving as consumer habits also evolve. This campaign helped extend the reach of the brand, promote a relevant sales event, and reach only local consumers – all at once.
So, will the idea of “tiers” be removed completely from our auto advertising lexicon in the coming years? Not likely. But when it comes to online video, it may no longer be an either/or.