Digital Advertising Firing on All Cylinders

Key insights and initiatives for auto marketers.

Finding a new car is one of the most significant purchases a consumer will make.

It’s an exciting but complex journey, with many car purchases marking a new life

achievement, like a new baby or promotion. Although exciting, it can also be a long

and quite tedious process as such a large investment requires a lot of research.

Digital media has revolutionized this search, putting the buyer in the driver’s

seat to engage with brands natively on their terms versus the more interruptive

marketing favoured by traditional TV, radio and print marketing.

This guide will provide auto marketers with key insights and initiatives across the

most important digital dimensions to capture attention during a highly complex

purchase process, to steer buyers in the direction of their dream car.

Getting From Here to There

2 | Digital Advertising on All Cylinders | © 2017 Kenshoo Ltd.

3 | Digital Advertising on All Cylinders | © 2017 Kenshoo Ltd.

The Automotive Industry Performance Today

It’s a great time to be an auto marketer. The mix of rising US wages, cheaper fuel, decreasing interest rates and high job confidence1 means car purchases are on the rise and so are marketing budgets, allowing marketers to show the industry exactly

what they are made of.

As consumers flock to digital channels to find their next car, it’s no surprise that savvy marketers are shifting gears and moving budgets into digital advertising. eMarketer forecasts that paid digital spend in the auto industry will increase by an average of 14% YoY between 2015 and 2020 – the second largest growth of all US industries.

Search advertising continues to provide a powerful and efficient platform for auto advertisers to connect with consumers. According to Kenshoo data,2 clicks in Q4 2016 had grown 6% YoY with cost-per-click down 7%. Search will continue to remain a critical part of the story, but to remain successful in this increasingly digital landscape, OEM’s to Tier 3 brands need to look for a more holistic approach to digital advertising, spanning all the influential destinations buyers visit on their journey from Pinterest to Google and everything else between.

Consumers move fast, especially online, and advertising efforts need to keep up with this to build an ongoing connection. According to a report by Autotrader, car buyers now spend an average of 59% of their time online compared to traditional channels, and over 60% are considering multiple car options, indicating the Bugatti speed that buyers move between digital destinations. Not only that, they are doing so on multiple devices.

Mobile now represents 65% of all digital media time (comScore), with 51% of new-car online shoppers using a mobile device for car research3 and one in four car purchasers using mobile every day to research cars.4

Kenshoo data, also supports the strength of mobile advertising with 62% of Auto advertising spend in Q4 2106 on mobile ads. This is 13% higher than the average across all industries.

1: Business Insider | The US auto industry may surprise everyone in 20172: Kenshoo global auto advertiser data, Q4 20163: J.D Power | Mobile Devices Gain Importance in Vehicle Shopping Process: 2015 New Autoshopper Study4: Google and Millward Brown | The Car-Buying Process: One Consumer’s 900+ Digital Interactions

4 | Digital Advertising on All Cylinders | © 2017 Kenshoo Ltd.

Within mobile, video ads are among the most powerful ad formats for generating user engagement. Facebook, whose audience is primarily mobile, generated 81% of its ad revenues from mobile advertising in 2016.5 Within the auto industry, Millennial Media found that video ads drove 296% higher engagement than standard banner ads.

So how can marketers keep up? This guide will help auto marketers

understand the latest digital advertising techniques to build their

brand and generate demand.

All Industries

Spend Share Q4 2017: Mobile vs Desktop

Auto Industry

5: Business Insider | Facebook just showed that it’s the undisputed king of mobile, 2016

5 | Digital Advertising on All Cylinders | © 2017 Kenshoo Ltd.

Develops and recognizes the want for a new car.

Contacts dealers for more information and to set up test drive.

Proceeds with car dealer of choice.

Side-by-side comparisons of different auto options & dealers. Checks ratings and reviews on relevant car website.

Shares their car-buying experience with friends and family via social media. Leaves reviews on 3rd party review sites or directly on social media.

Searches web for market options. Browses car websites.

Brand awareness advertising on Facebook, Instagram and Pinterest.

Leverage intent from search to create re-marketing audiences on social.

Drive reviews with targeted ads.

Dynamic ads on Facebook and Instagram.

Create a dynamic list of people who have purchased 2 years ago and target with the latest range.

Search ads on Google and Bing.

AWARENESS CONSIDERATION ENGAGEMENT LOYALTY &ADVOCACYEVALUATION PURCHASE

Challenges: Navigating The Purchase Journey

The buying journey of today’s car buyer has become considerably more complex thanks to the influence of digital and mobile. The days of only visiting local dealerships to find the best deal are gone. This has greatly increased the potential addressable target market, but does come with it’s challenges.

Buyer interaction

Marketer interaction

6 | Digital Advertising on All Cylinders | © 2017 Kenshoo Ltd.

Complexity

Targeting the various stages of the buying cycle at the right time with the right message can be a challenge in such a complex purchase journey. The key phases awareness, consideration and decision have multiple layers and aren’t always linear, with buyers coming in and out of the process.

Data

To be powering on all cylinders, marketers need to leverage 1st and 3rd party data in real-time to segment audiences based on buying stage and demographics, whilst applying device and publisher context to determine ad/content format and delivery.

User Reviews and Social Media

Car buyers heavily rely on user reviews at the consideration stage of the purchase journey, especially if they are looking at more than one brand.6 Social media plays a big part here with 38% of consumers reporting they’ll consult social media next time they purchase a car.7

A Consistent Story Across Publishers

In today’s online landscape, buyers are visiting more and more publishers. With 40% of new car purchases over the next 10 years forecast be made by millennials,8 auto marketers can’t ignore the power of new advertising channels such as Pinterest and Snapchat.

Mobile

Shopping for a car has been transformed by the mobile revolution. Nearly two-thirds of shoppers use a mobile device to conduct research while physically on the dealership lot.9 Now more than ever, OED’s, regional and local dealerships need to embrace this new path to purchase in order to drive awareness, capture their prospects share of mind, and drive purchase intent.

Measuring Digital ROI

Although the majority of shopper research happens online, the final purchase is often offline, making it difficult to attribute sales back to relevant online actions.

With car shopping taking 6 months or more and with so much of it moving online, it’s important to reach audiences early and often throughout the shopping journey. The challenge is to break

through the clutter during a highly competitive and complex purchase process and engage the right audience earlier in the buying journey. Our Tips and Tricks hold the secret to this success.

Test and scale to see what works!

Tips & Tricks

6: eMarketer | For Auto Buyers, Online Reviews’ Influence Rivals Professional Opinions7, 8: CMO Council | Auto industry failing to tap power of social media to deliver actionable leads9: Placed | Understanding the role that smartphones play on the auto dealership lot

7 | Digital Advertising on All Cylinders | © 2017 Kenshoo Ltd.

Paid Social

Grow the Target Audience

• Engage the most relevant audiences based on key demographics (age, gender, interests, behavior and more) on the most popular social media destinations.

• Fill your upper funnel with qualified leads by leveraging Facebook Lead Ads, which include a pre-populated form, allowing you to capture a variety of information from your target audience that has already been shared with Facebook.

• Target your existing customer database directly with Facebook’s Custom Audiences - upload known customers and prospects for more 1:1 messaging. Integrate your CRM with Kenshoo to dynamically and automatically keep Custom Audiences up-to-date.

• Scale your targeting activity by easily saving, reusing, and updating audiences with Kenshoo Personas.

• Predict and proactively target lookalike audiences based on behavior, demographics, life stage and interest data from previous buying segments and desirable new audiences.

Refresh Creative Often

Auto advertisers are known for their bold, beautiful creative that captures the imagination of their audiences. Save time and automate creative ad sequencing to follow the customer through their journey, reaching them at each touch point with the most enticing ads to tell a richer story.

Utilize Kenshoo’s Creative Manager to update creative at scale in minutes, smart cropping to fit the ad format and creating an overlay from a template to show a special offer. Take a catalogue of creative and quickly A/B test standard creative with the newly updated creative.

Lower Funnel Retargeting

Be present in the later stages of the journey when car buyers are comparing specific models, by engaging audiences with relevant messaging based on where users have visited specific web pages.

Promote inventory feeds at scale with an “always-on” approach using Facebook’s Dynamic Ads via Kenshoo.

Automate and Optimize

Once the above tips and tricks are running efficiently, the next step is to scale your efforts. Kenshoo technology can save time by automating the optimization of ads, adjusting bids and allocating budgets in real time to meet overall goals while scaling spend.

Marketers can also schedule ads to run with specific audiences at specific times. If an ad is underperforming, criteria can be set to automatically pause the ad or have the bid or budget adjusted by a predetermined amount.

If a user has visited a car site and searched for black electric cars, when they go to Facebook they will be shown an in-feed carousel ad of black electric cars. Pixels can be used to determine what information to re-target on.

9 | Digital Advertising on All Cylinders | © 2017 Kenshoo Ltd.

Invest in video

Video ad spending on Mobile is growing faster than any other digital advertising format in the US, according to eMarketer. This is correlated with the fact that over 50% of car buyers use video for research, indicating the importance video should play in auto marketing strategies.

Leverage a Video Performance Partner

Make video creation easy using a partner that integrates with a digital technology provider like Kenshoo. A video partner makes it easy and fast to create authentic video ads that deliver emotional impact, test variations of ad creative, optimize and scale.

Video

10 | Digital Advertising on All Cylinders | © 2017 Kenshoo Ltd.

Paid Search

Cross Publisher Marketing

Automate and Optimize

Advanced algorithms and automated workflow solutions can simplify the burden

of managing millions of keywords, to ensure that every dollar spent will be the best investment across the entire search portfolio.

Optimize towards an overarching performance goal, to compile historical data and build hundreds of thousands of statistical models to gain insights into the impact of each bid change upon the entire keyword portfolio. Set the portfolio goal and the algorithms go to work to maximize the campaign results.

Proactively Adjust for Seasonality Fluctuations

Synchronize digital media programs with seasonality, consumer buying indexes, media plans and other 3rd party data sources.

Leverage algorithmic-based forecasting and budgeting tools to narrow margin of error and plan performance with foresight to understand potential return before any changes to campaigns are made.

Better Align Automotive Tier-Orchestration

Orchestrate bid strategies across all tiers to align with optimal performance and business rules

Use tiered bidding strategies for top overlapping keywords between tiers to minimize cannibalization.

Automatically turn Paid Search Intent into Paid Social Advertising

Search activity is one of the best ways to capture intent and to identify an audience that is actively interested in a brand. With Kenshoo’s Intent Driven Audiences (IDA), marketers can create a custom audience based on users that have searched for auto related terms and/or specific brands or models, for retargeting campaigns on Facebook and Instagram.of error and plan performance with foresight to understand potential return before any changes to campaigns are made.

11 | Digital Advertising on All Cylinders | © 2017 Kenshoo Ltd.

Solution

Using Kenshoo’s Intent Driven Audiences (IDA), the multinational automotive company was able to identify users on Google and Bing who had searched relevant brand and model specific keywords, then automatically create custom audiences for remarketing and lookalike audiences for prospecting on Facebook.

Last year, a large multinational automotive company aimed to drive sales of their tier 1 and tier 2 class vehicles by reaching new potential drivers and encouraging them to get more information. The auto company sought a cross publisher solution that could ensure accurate attribution and efficient targeting of the highest value audiences.

Results

After only running IDA for a month, Cost-per-Acquisition (CPA) was reduced by 2X and Conversion Rates were 2X higher than prior to leveraging IDA.

Cross Publisher Case Study

Cost-per-Acquisition Conversion Rates

2xLOWER

2xHIGHER

12 | Digital Advertising on All Cylinders | © 2017 Kenshoo Ltd.

Optimize for Mobile

Portfolio level technology can automatically optimize mobile bid adjustments to drive superior performance in Search advertising.

Keyword model policies will automatically maintain position on mobile within constraints. Test your creatives on mobile to ensure it’s impactful on smaller screens. Kenshoo allows advertisers to easily A/B test creative to identify the most compelling imagery and messaging.

Measuring Digital Performance with Offline Conversions

One of the key auto challenges is measuring digital performance and ROI when many sales happen offline. Best practice is the integration of CRM, call analytics and other data connectivity solutions with digital marketing platforms that enables auto marketers to optimize to best possible performance. Traditionally, this has been achieved through cookie-id based solutions. However, new technologies are using predictive algorithm-based technology, coupled with cookie and/or usernames to track consumers device and buying behavior.

Mobile Attribution

13 | Digital Advertising on All Cylinders | © 2017 Kenshoo Ltd.

What’s Next for the Auto Industry

Capture Attention with Pinterest

Every month, people conduct 2 billion searches on Pinterest, making it a great platform for auto advertisers to influence the awareness and consideration stages of a car buyer’s journey. Pinterest recently launched Search Ads on Pinterest, naming Kenshoo’s its key partner, to help businesses reach their audience earlier on in the decision process when they are shaping their idea’s on their next car.

Target the growing Millennial Audience with Snapchat

With millennials making up 40% of new car purchases over the next 10 years, incorporating Snapchat’s predominantly millennial audience into the marketing mix will play an important role in part in driving brand and performance success for OEM to Tier 3 brands. The highly-interactive, mobile video Snap Ads are aligned to the visual storytelling that thrives in the Auto industry.

The auto industry is transforming rapidly thanks to the new doors opened by digital, but where should auto marketers place their bets for future success? Our advice is follow the consumer. With more and more top tier digital publishers opening their doors for advertisers to connect with fresh audiences, we encourage auto marketers to move budgets from single channel strategies, across more of the digital destinations that matter to car buyers, leveraging the most popular ad and devices types such as video and mobile.

Act on Data in Real Time

Auto advertisers need to act fast when it comes to targeting buyers at the right time along the purchase journey. The days of manually adjusting campaigns are long gone thanks to optimization technology, but the next level is using your data in more sophisticated ways to generate lookalike audiences, use search intent data to power social advertising and create product feed based ads that link directly to your local vehicle supply.

Summary

The key to success in the Auto industry is to be able to tell a bold and consistent story that develops with the buyer along their path to purchase. With more and more buyers taking this journey online, auto marketers must make the most of the technological advances in digital advertising to help them engage in the right place, at the right time, with the right message.

For auto expertise powered by Dygen leveraging

Kenshoo technology, please get in touch.

kenshoo.com/ContactUs