By Adam Pavkov,
Industry Manager, US Automotive,
Meta
The bottom of the marketing funnel is a crowded space.
Thousands of advertisers are fighting for attention, clicks, leads, and sales, leaving the average person exposed to an estimated 4k+ ads each day.
In the auto industry, for example, 89% of advertising investment across Facebook, Instagram, Messenger, and WhatsApp in the U.S. was directed toward lower funnel conversions1.
This means dealers are not only jockeying for position against competitive dealerships; they’re fighting for attention with other big box retailers, lifestyle brands, content generators, and every company asking for a sale from their addressable audience.
It’s why in a 2019 earnings call, Netflix said it’s not as focused on rival streaming-video services from Amazon, Hulu, Disney, or other big players as much as improving its platform to win share of attention.
“We compete with (and lose to) ‘Fortnite’ more than HBO,†Netflix told investors.
Attention will continue to be a precious and diminishing commodity.
But for dealerships looking to stand out from the crowd, there is good news:
Aligning Dealer Creative with Consumer Preferences
Traditionally, as an industry, we’re accustomed to competing with inventory and price-centric messaging. In short — “we’ve got what you need - at the lowest price.â€
But there’s a shift in consumer behavior driven by outside retail and transaction experiences from other industries shaping the way younger generations think about the car buying process and what they prioritize.
Last year, we saw consumer satisfaction with the car buying process drop, with customers sighting time commitment as one of the top three drivers of the decline. But simultaneously, consumers believe online, and eCommerce capabilities improve the overall buying experience.
This shift in purchasing priorities — from price to experience — allows dealers to supplement their inventory and price-focused creative with messaging that highlights the unique shopping and buying experience customers can expect. And dealers can begin to stand out by using their creative to speak about their store’s digital or modern retailing capabilities and highlight the frictionless buying process.
This same creative strategy extends beyond our sales messaging. It also opens opportunities on the service side since the top reasons U.S. customers service their vehicle with their dealership are based on the “quality of work†and “trust.â€
This data highlights the important role dealers play in maintaining customer relationships. Dealers can leverage this to increase the impact of fixed-ops campaigns.
Driving Performance Up the Marketing Funnel
Each direct response or conversion-heavy strategy has its own invisible ceiling, where scale in investment doesn’t result in a higher return. It depends on market conditions, competitor activity, and, most importantly — existing demand in the market.
Fortunately, this invisible ceiling can be expanded by moving up the marketing funnel and testing the impact awareness campaigns have on your dealership brand.
Full funnel marketing is not a strategy focused on pushing consumers through the funnel in a linear journey from awareness to purchase, but rather a strategy of reaching consumers at a given stage of their journey to build intent and expand the funnel.
Meta’s auction algorithms also work differently for performance and brand ads.
For performance ads, our algorithms are narrowing broad targeting to a smaller audience, finding people with the highest likelihood to perform a desired action — for example, a VDP view or lead.
With performance campaigns, you will always reach a more limited audience but with high intent.
It’s why in a conversion-focused industry, auto advertisers, on average, only reach 17% of their total available in-market audience across Meta.1
But by moving up the funnel and investing in awareness or brand-building campaigns, advertisers will widen the audience reached by covering people with different levels of intent and take advantage of the combination of the short-term and long-term impact of marketing.
The short-term effects of direct response marketing are easy to understand and track – did the campaign result in a response from the consumer?
Sales activations produce very big short-term effects but decay away very quickly. The effects of brand building are much more long-term. They decay more slowly, and they accumulate over time and, as a result, drive long-term growth and profit.
In a long-term measurement study from 2016-2021 across 40 different brands, we can begin to see how important brand-building is to the long-term success of business performance with:
Direct response-focused advertisers can drive scalability and efficiency by diversifying their marketing efforts and layering on brand-building messages to their existing conversion-focused efforts. The strategy will help dealers:
Sources:
1. Meta internal macro analysis across 46 in-market accounts, Feb 20202. Salesforce State of the Connected Customer Report, Fourth Edition (Oct 2020) and Fifth Edition (Feb 2022)3. Auto Brand Loyalty Study (Meta commissioned online study of 380 respondents 18+ in the US Current Auto Owners) Nov 2021
Learn more in "A Dealership’s Guide to Meta Advertising"
Join Adam Pavkov (Industry Manager, Automotive, Meta) for his session at Digital Dealer Tampa 2023 to learn how to:
View the Digital Dealer Show Schedule to explore the actionable sessions you can attend at Digital Dealer Tampa (May 1-3, 2023)!
Adam Pavkov manages the dealership business on Meta's automotive global sales org, focusing on supporting partner growth and promoting effective advertising solutions for the retail auto industry. Prior to Meta, Adam was Director of Product Management at Cox Automotive, working across both the product development and corporate strategy teams focused on developing advertising solutions and providing consultation for OEM and dealership clients.