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AUTO INDUSTRY A Digital Marketing Perspective Innovative strategies for segmenting and targeting auto audiences Introduction 2017 has seen mixed results for the automotive industry in the UK. Manufacturers and dealers are dealing with a weakening pound and declining consumer confidence, coupled with changing customer preferences and policies. This has compounded into the following market shifts: - New car sales have cooled down after 5 years of strong growth, with Q2 seeing the largest quarterly fall in more than 6 years of 10.3%. - In contrast, used car sales have risen steadily by 3.4% over Q1, and expected to take share from new car sales over the second half of the year. - Coupled with the government’s decision to ban diesel vehicles by 2040 and growing health concerns, diesel car sales have dipped by 15% in June. - Consumers, instead, are rapidly adopting environmental and efficient vehicle options, with electric and hybrid car registrations increasing by over 30% in June year-on-year. (Source: SMMT 2017) Automotive Report Page 2 Consumers have also become highly sophisticated with their research and buying cycles. According to Luth Research, a typical car buyer has 900 digital interactions over three months before purchase. In order to target these evolving channels, marketers are shifting away from traditional mediums (with the exception of TV), and investing more in targeted digital advertising and search marketing strategies. Marketers in the automotive industry are now faced with the following challenges: - Determining which channels reap the highest ROI for brand building and targeting - Segmenting audiences with precision at the various stages of the customer’s journey - Transforming online prospects into offline buyers through targeted and trackable means In this report, we look at key tactics for manufacturers to identify and target high prospect audiences online. In particular, what steps a manufacturer can take to optimise the customer’s journey through their awareness, consideration and decision making stages. Want to know how we get our insights? Click on the icons that appear next to the graphs Table of Contents Capitalising on Online Buzz The Tesla Effect: How the Model 3 has 1 Impacted the Electric Vehicle Market Segmenting Online Audiences Audi Spotlight: One Brand, Many 2 Audiences Activating High Prospects BMW’s Two-Tiered Activation Approach: 3 Re-targeting and Competitor Conquesting Automotive Report Page 4 1 Capitalising on Online Buzz The Tesla Effect: How the Model 3 has Impacted the Electric Vehicle Market Automotive is well known for its long purchase cycles, so it’s paramount for a brand to stay top of mind. Brand building efforts are typically done through outbound marketing, like TV and sponsorships, which can be costly and difficult to track. In this section, we detail another approach for brands - through search and content optimisation. Automotive Report Page 5 Tesla’s Model 3 vs. Competitors: What Has Happened Online? The Model 3, Tesla’s first mass-market and cheapest car to date at $35,000, has attracted a lot of media attention. Searches for the Model 3 have risen by 345% from the start to the end of July, as a result of two key announcements: - 7th July: The first Model 3 rolled off Tesla’s production line, and - 28th July: Tesla hosted a “handover party” for the first 30 cars. Whilst the recent hype has brought a lot of attention for Tesla, the Electric Vehicle (EV) industry has actually benefited as a whole, withsearches for “electric cars” rising in tandem by 346%, over the same time period. In addition, searches for other key EV competitors have surged, such as: BMW i3 (+164%), Nissan Leaf (+125%), Renault Zoe (+125%) and Hyundai Ioniq (+106%). Searches for Electric Vehicles Weekly Search Share July 28 Handover party on first 30 cars 0.006% July 7 First Tesla Model 3 produced 0.005% 0.004% 0.003% 0.002% 0.001% 0.000% 03/06 10/06 17/06 24/06 01/07 08/07 15/07 22/07 29/07 Week Ending Date Tesla Model 3 Nissan Leaf BMW i3 Renault Zoe Hyundai Ioniq % Growth from w-e 1st to 29th : 345% 125% 164% 125% 109% Jul * Source: Hitwise 2017. The above chart includes search variations of each model. Automotive Report Page 6 Media has further capitalised on the recent EV buzz. Top sites, such as Auto Express, have seen a 162% rise in articles around “best electric cars”, as opposed to articles solely focused on Tesla Model 3. In the week ending 29th July, articles on electric and hybrid cars had captured 3 out of the top 5 articles on their site. Top Articles on Auto Express Weekly Article Share 0% 1% 2% 3% 4% “Best Electric Cars on Sale 2017” “Best Electric Cars” have grown by 162% since the start of the month “Best New Car Deals 2017” Click to tweet! “Tyre Reviews - Best Car Tyres 2017” “Best Hybrid Cars Sales” Week ending date: 29th July 22nd July “BMW i3 Best Electric Cars” 15th July 8th July * Source: Hitwise 2017. Chart includes article share on autoexpress.co.uk Automotive Report Page 7 Downstream traffic from search also shows a significant contrast between Tesla and other EV players. In the week ending 29th July, Tesla had a higher share of searches going to media outlets (like The Verge, Alphr and Electrek), whereas, competitors had a higher proportion going directly to their site, or dealerships and classifieds. This implies that whilst audiences of Tesla may be more interested in news hype, audiences of BMW or Nissan could be demonstrating higher intent. In the next chapter, we detail how a manufacturer can then dissect these audiences, in order to identify genuine prospects. Top Downstream Sites from EV Searches “Tesla Model 3” “Nissan Leaf” 1 Tesla Motors 33.80% 1 Nissan Motor UK 42.46% 2 Eleckrek 6.03% 2 Auto Express 7.89% 3 Youtube 4.69% 3 Carwow 7.43% 4 The Verge 4.31% 4 Nissan USA 4.19% 5 Alphr.com 4.04% 5 Autocar 2.75% “BMW i3” “Renault Zoe” 1 BMW UK 33.79% 1 Renault UK 42.21% 2 Autocar 5.76% 2 Carwow 17.64% 3 Clean Technica 4.72% 3 Renault Retail Group 7.66% 4 Auto Express 3.87% 4 Auto Expres 4.09% 5 Carwow 3.83% 5 What Car? 2.89% A higher proportion of Tesla Whereas, others had more traffic going searches went to media sites. to direct, dealership or classified sites. Source: Hitwise 2017. Downstream traffic from the above searches, in the week ending 29/07/2017. Top Keep a close eye on search trends and terms going to your industry. Capitalise on growing interest. Identify spikes in searches, profile who have shown this Takeaway interest and where they go online after search. 2 Segmenting Online Audiences Audi Spotlight: One Brand, Many Audiences A key requirement for any online strategy is to differentiate aspirational and genuine buyers of a brand. In particular, the ability to identify and track audiences that have demonstrated high intent, such as: people who have searched for a specific dealer, or have booked a test drive. The ability to do so is critical for any targeting strategy. Our analysis shows that even within a single brand, audiences largely differ depending on their intent touch points and interactions on a manufacturer’s or dealer’s site. Automotive Report Page 9 Audi Spotlight: Differentiating Segments by Model and Intent Audi has received over 370,000 unique users to their website in the past 8 weeks*. These users are a combination of different profiles, depending on their model interests, needs and buying intent. For instance, Audi’s A3 compact audience significantly differs from their TT sports coupe audience. A3 attracts a more female, older and higher income segment, compared to TT which attracts a higher share of male, younger and aspirational segment. Audi Audience Differences by Model A3 Compact TT Sports Coupe Audience Audience Higher share of females Higher share of males (F - 45 : M - 55) (F - 42 : M - 58) Older audience Younger audience (66% of audience is older than 35) (39% of audience is younger than 34) Higher household income Lower household income (21% of audience earns more than 60K) (58% of audience earns less than 40K) *Source: Hitwise 2017. Period: 8 weeks to 22/07/2017. Audiences build on searches and visits to Audi’s A3 and TT pages. Audi’s audiences further differ by online touchpoint. This is shown on the following chart for the below listed actions: - Audiences that have requested an Audi Brochure - Audiences that have visited or searched for Audi Used Cars - Audiences that have visited or searched for an Audi Dealership. Automotive Report Page 10 People who request a brochure tend to be younger, based in London and visit other manufacturer sites. Used Car audiences are older and search for other manufacturers’ used vehicles. In comparison, audiences interested in Audi dealerships have the highest household income and visit specialised dealership sites dedicated to high-end car brands. A manufacturer like Audi could utilise these insights to know: what types of info each segment is searching for and understand where they go online to inform content and display, which we will detail in the next chapter. Audi Audience Differences by Touchpoint Touchpoint / Who are Where do they go What other cars are Area of Interest they? online (auto)? they searching for? Requested a 18-24yo Visits Manufacturers like “Jaguar XJS 4.0” London BMW, Mercedes and “BMW M5” Brochure HH income of £20-40K Jaguar “Aston Martin Valkyrie” 45 yo+ Visits Dealerships like Arnold “Used VW” Looked for South East Clark, Motorpoint & Evan “Used BMW” Audi Used Cars HH income of £40-60K Shalshaw “Range Rover Evoque” Looked for an 45 yo+ Visits Specialised Dealerships “BMW Mini Malton” South East and South West like Sytner & Imperial Car “BMW 330d Xdrive” Audi Dealership HH income of £70K+ Supermarket “Porsche Macan” * Source: Hitwise 2017.

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