By Aaron Sheeks, President,PureCars
The conversation around first-party data versus third-party data has been active for the last few years. However, a large percentage of the automotive retail world is still trying to understand why third-party data is less viable, how to effectively capitalize on first-party data and what it all means for retailers.
What is first-party data?
When considering how auto retailers interact with their customers, a large percentage of customer insights (e.g., what the customer is interested in), has been from the use of third-party data. Whether it’s through cookies that track their online activity, affiliate networks, social media engagement, or other sources , auto retailers have traditionally worked with their digital advertising partners to tap into data garnered from outside sources to target consumers with their offers.
For years this was the backbone of search engine advertising, and even social marketing on platforms like Facebook.
For example, a majority of auto retailers used information that was collected when consumers visited various websites – or when they made certain demographic information and preferences known on Facebook. Auto retailers would acquire these browsing details and use them in their targeting for personalized offers. However, new privacy laws have been implemented and companies are giving users the ability to block third-party tracking —making it nearly impossible for auto retailers to leverage third-party data for their advertising.
Like the rest of the e-commerce world, dealerships now find themselves needing to pivot to first-party data strategies.
Creating a more personalized
First-party data is now essential to deliver more relevant and
personalized marketing to digital-first consumers — and better understand and
serve their needs. Consumers today are much more digital-centric in their
behaviors than they were even just a few years ago, so understanding them
cannot be understated in importance.
Furthermore, in today’s increasingly unpredictable business
climate, delivering an even more personalized customer experience is a basic
requirement your customers expect. Consumers gravitate toward dealerships that
pay attention to — and anticipate — their specific wants and needs.
A dealership’s first-party
customer data has the potential to be a treasure trove of audience insights
that can be uniquely segmented to strategically target customers with
customized messaging. Dealers can make use of this data to reach customers on
any outbound marketing channel, For example, dealers can identify higher
mileage vehicles and offer those customers a special trade-in credit to get
them into a new model.
“Don’t I already have this data in my current systems?"
By now, you hopefully
understand the importance of your first-party data and have an idea of how you
can utilize it. One question that
remains: where do you manage this invaluable information?
Your DMS or CRM may come to mind. However, in analyzing hundreds of these
dealership data sources, we’ve found that they are filled with inaccurate
and/or outdated customer information. At times, as many as 50% of those
customer records were affected.
To top it off, using this
unreliable customer data leads to a significant waste of your marketing spend,
either from incorrect customer contact information or reaching out with
In addition, CRM systems do
not typically offer the flexibility and customization dealers look for when
creating audience segments for their marketing. A robust CDP can help you target
customers more effectively, and even automate the outreach - saving you time
Capitalize on first-party data with a Customer Data Platform
To put your first-party data
to work for you, a CRM or DMS isn’t the answer. A Customer Data Platform (CDP)
is. A first-class CDP will:
Combining a CDP with a robust
marketing platform allows you to efficiently put first-party data to work. You
can then easily target customers with digital advertising, social media, email,
direct mail, or text — in addition to outreach lists for a BDC.
When dealers can clean and
take action on their first-party data, it offers limitless marketing
opportunities. It also leads to improvements in metrics like costs per
conversion and reductions in ad waste.
The future of automotive marketing will be reliant on ultra-targeted marketing
with your secure first-party data. It’s going to be essential to compete in
crowded markets. Dealers that start today are going to have a leg up on their
Aaron Sheeks is the president of PureCars, an Atlanta-based leading provider of digital marketing technology and services for automotive dealers. Aaron is a former U.S. Naval Officer and prior to joining PureCars, served as the CEO of The AutoMiner, acquired by PureCars in early 2023. He has a proven track record of building successful sales and support teams while working hand-in-hand with top dealer groups across the country on their retail processes. He holds a MBA from Trident International University.