Online Auto Marketing’s Crossroads: Either Collaborate or Compete

The ability to research and buy products online has visibly altered the retail landscape, forever changing the customer’s path to purchase. This has had an equally large effect on the automotive industry, albeit one that is less visible to the untrained eye.

Customers have abandoned the traditional sales funnel in automotive as well, and they now embark on a journey where brands are added and subtracted to the consideration set throughout, sometimes right up to moment of purchase.

This behavior touches every level of marketing in the industry, and is creating a ripple effect that could upset decades-old systems and institutions. The traditional sales funnel no longer holds, so traditional structures like the 3-tiered marketing system of manufacturer, dealer association and dealer may be obsolete.

Customers have changed, and it’s time for marketers to use new technology with a new strategic intent. Rather than rely on old models, it’s time for the tiers to realize they must either collaborate or risk competing with each other.

Online technology provides greater predictive capabilities and data modeling, allowing marketers to identify potential customers as they move along their online research and purchase journey. This is crucial, because new customer behavior means there is always an opportunity for a brand to work its way into the consideration set.

Traditionally, manufacturers would invest in massively scaled national branding campaigns, dealer association budgets were devoted to driving traffic and the individual dealer was responsible for the one-on-one customer relationship.

But with the technology employed by companies such as PointRoll, the manufacturer can get just as close, if not closer, to customers. It is now possible that the manufacturer knows the customer better than the dealer does.

This fundamentally changes roles and responsibilities. While dealers and manufacturers have always depended upon each other in some ways, technology has created an environment that demands dealers work closely with the manufacturer to accomplish much more on a micro level.

While dealers are used to customizing a sales pitch to work for their local market, the online customer journey has focused the marketing spotlight even tighter on the individual. Dealers may have customers’ real names and home mailing addresses, but online data and technology provide insights in real time, something dealers often don’t have and don’t always have the pockets to purchase.

Fully leveraging this era of one-to-one digital marketing requires something else that is sometimes missing in the auto-marketing ecosystem, and that’s trust. Collaboration requires close contact and communication, but today’s system is built around anachronistic practices and organizations in place largely to serve individual needs, rather than contribute to a holistic brand experience.

Is it time to rethink, repurpose or even reject the tiers, replacing them with something more holistic? For instance, is the role played by the dealer association, as it currently exists, even necessary in an age of instant information, constant consideration and pricing transparency? In all likelihood, a new era requires new organizations to service the collaborative efforts.

If things remain the same, these one-to-one marketing tactics suddenly force the traditional tiers into a competitive model, with real-time competition for media and corresponding messaging. Suddenly, dealer and manufacturer are trying to outbid each other on inventory to reach the same customer. It simply doesn’t work.

How the industry will move forward remains to be seen. Technology has made many marketing departments smarter and more efficient, but it has not led them to do things differently.

It all goes back to looking at the customer behavior and building systems that are tier-agnostic to match the right content with the right context at the right time, all in service of a consistent brand experience.

As long as those three items are hit, it doesn’t matter which tier is responsible.

Cindy Scott is a principal at Brand Traction, an automotive marketing consultancy.