The Marketing Corner: Automotive Industry Update
It’s probably a fair statement to say that Americans have an obsession with cars. Both males and females have had a fond affection that transcended age. Prior to the “great recession,” consumers were purchasing new vehicles every few years.
Recent trends are showing an uptick in new vehicles purchases. It’s no secret that if Warren Buffet jumps into an industry, there is usually a pot of gold at the end of the rainbow.
As we watch the automotive industry transform itself, we find that it is also revamping its advertising practices and spending. Digital is becoming increasing important. Successful manufacturers have decoded the DNA of this medium (digital) in order to generate the best results. This increased spending in digital has been to the detriment of local newspapers and radio stations. Local TV may soon see erosion in spending in favor of digital investments.
Consumers today are empowered, and in many cases, more knowledgeable than the typical sales representative at a dealership. One fourth of the U.S. populations are now Millennials. Many in this group have intentions to purchase a new car. However, unlike their Generation X or Baby Boomer parent, this group has been slower to purchase a car. Much of this stems from a few facts about Millennials:
- Unemployment; jobless rate is twice the national average
- Living at home longer
- Tend to live life digitally via social media outlets, etc.
- Less smitten with cars
Programmatic impact on digital purchases is proving more efficient and offering deeper scale. Data driven purchases are allowing for more segmentation and capturing the motivated consumer; hence, eliminating waste.
As the automotive industry continues to experience consolidation, trends continue to see digital spending increasing at the expense of traditional media. Online is more cost efficient and allows for hyper-local targeting.
The automotive industry will have to crack the Millennial DNA in order to convert this consumer into a buyer. What worked for Boomers and Generation X will not have the same impact on Millennials. As long as dealerships/manufacturers follow this consumer’s media behavior, strive to be authentic and transparent, one can put itself ahead of the game by building a long-term relationship with this aloof audience.
Adele Lassere is a marketing/advertising consultant with 20+ years experience, freelance writer and author of “Elements of Buying” (self-help advertising guide); available at Amazon.com. Adele was listed as Black Enterprise’s 2011 Top Execs in Marketing & Advertising and Black Enterprise’s 2013 Top Women Executives in Advertising & Marketing. Contact: [email protected]