The rules of the game are changing. Cookies are being phased out, social commerce has exploded and consumers want more control over how their data is used online. While consumer behavior, customer experience and measurement will continue to provide the foundations that inform future advertising budget decisions, it’s the “how” that will change. Understanding the impact of these changes could be critical to ensuring your ad strategy remains profitable.
Truly getting a sense of which channels are performing and which are not is the persisting challenge on the minds of local advertisers. And when evolving customer demands and data limitations are brought into the mix, ad spend decisions get all the more challenging. Which media channels are really driving sales? Is it the traditional avenues like TV, radio and direct mail, or should you invest in running more targeted digital ads through platforms like Facebook and Instagram? Understanding the impacts of the rapidly changing digital landscape is important to be able to make quick and strategic shifts to future-proof your business.
Here are three important marketing tactics transforming the way local businesses find, engage and measure success, with real-world ad examples from the automotive industry.
1. Drive short-term sales with brand advertising
To illustrate the effect that a consumer’s emotions can have on motivating a purchase, consider this: When was the last time you bought a new product that you’d never heard of, touched or tried, simply because of the price? Probably never. However, when was the last time you bought a product at a premium price because the ad was so good? I’ll admit, I bought that $42 can opener from an Instagram ad that probably cost $1 to make. That’s the power of brand marketing.
When marketers are looking to drive short-term sales, they tend to focus on lower-funnel strategies, such as direct response (DR) campaigns that often feature product and price. While DR campaigns are often necessary, it can be a missed opportunity not to combine them with the broader message of the brand story. In fact, in a recent study, 94% of campaigns that ran brand advertising on Facebook and Instagram saw an increase in conversions against their DR campaigns.
Here’s an example of brand advertising at work: An auto dealership, Webb Chevrolet in Oak Lawn, Ill., was pouring 100% of its ad budget into transactional marketing, running ads with messaging focused purely on price and inventory.
Working with its agency Sincro, the dealership decided to test the effectiveness of brand advertising and reallocated 50% of the budget to run ads that told the brand’s story. Webb Chevrolet used the other 50% of the budget to continue running its transactional ads. The results: 49% more impressions at a 40% lower cost-per-impression (CPM), 29% lower cost per website visit and an 11x return on ad spend.
2. Implement conversational commerce to connect with customers
Now that you’ve captured the interest of your customer with a compelling brand story, let’s look at the next stage of the funnel—customer engagement. While the idea of direct messaging is not a new concept, brands in the digital space are only starting to realize its immense value. If you’re a local business looking to enter the new age of online customer engagement, it’s time to get familiar with the term: “conversational commerce,” otherwise known as “c-commerce.”
If you walked into a store and a representative immediately asked you to fill out a form with your name, email and phone number, you’d probably run the other way, right? So, why should it be any different online?
In today’s fast-paced, always-on digital world, creating a frictionless, convenient path to purchase wins the sale. In fact, in a Facebook study, 58% of people surveyed said they consider convenience alongside price when deciding where to shop, and 69% said being able to message a business helps them feel more confident about the brand. To meet evolving customer expectations, brands are now relying on messaging apps like Facebook Messenger, WhatsApp and Instagram Direct to meet customers where it’s convenient for them, easing the path to purchase.
Here’s an example: Kevin Frye, the marketing director for Jeff Wyler Automotive Family, was looking to increase dealership appointments. With Facebook research showing that 65% of people surveyed in the U.S. feel more confident messaging a business than filling out a form on a website, Frye decided to adapt his customer engagement strategy and remove all the forms on his dealerships’ websites.
By going formless and pivoting to a direct messaging model where his in-house team responded to customers via chat during business hours, he was able to increase dealership appointments from 25% to 59%. That’s the power of conversational commerce.
3. Rethink measurement in a cookieless future
The prevalence of ad blockers, regulations like CCPA and GDPR, and updates to how user information is collected on iOS and Android platforms all mean one thing—we must rethink how we measure our advertising and marketing success and ensure we’re respecting the choices people make around privacy.
A flexible and proactive approach to updating practices around data collection is a must when optimizing marketing spend. Without rethinking your approach, you will be left trying to make sense of incomplete and inaccurate datasets to inform your marketing decisions.
In a recent webinar on navigating change in the auto industry, Allyson Witherspoon, VP and CMO for Nissan U.S., said it best, “You have to understand the measurement tools and the expectations we’ve had in the past are going to be different and they need to evolve.”
So, how do you transform your business to honor the choices people make about their privacy while still gathering meaningful insights to better serve your customers? The answer lies in Marketing Mix Modeling (MMM).
MMM is a statistical analysis tool that has long been used by advertisers to understand how marketing tactics impact sales, and it has proven to be effective in producing accurate insights about traditional media. The best part? The model is also optimized for modern solutions that don’t rely on user-level engagements, such as impressions and clicks. Rather, it takes aggregate data from internal databases and third-party sources to help marketers understand which channels are driving results.
To understand how it works, let’s look at this example from Bayside Mitsubishi. In March 2021, the auto dealer was allocating a big portion of its budget into traditional marketing channels that weren’t generating the returns that a dealership like Mitsubishi needed. Working with its agency Fountain Forward, Bayside implemented an MMM approach that looked at the auto dealer’s marketing mix holistically—rather than at each siloed channel—so that the company could make a confident decision on where to reallocate budget.
Bayside Mitsubishi shifted media spend from direct mail and radio to Facebook and Google Ads, which reduced its overall marketing budget by 23%. As a result, the dealership increased new sales by 55% in a matter of months. The dealership set six consecutive monthly sales records for new vehicles and Bayside Mitsubishi has now gained the title as the No. 1 Mitsubishi dealer in Houston.
Marketing and advertising have always been a game of adapting and evolving. Testing, exploring and measuring digital advertising has long served as the foundation for driving strong results—and it will continue to do so, with some strategic pivots.
In a world that’s inundated with brands vying for customer attention, it’s important to remember this: The brand that thrives in the future is the one that focuses on emotional connection through branding, creates a frictionless customer experience through conversational commerce and implements new measurement tools that champion privacy-first methods.
