Fun in the Funnel

It's odd to think of someone jumping into the wide mouth of a big funnel, swirling around and ultimately coming out of the tapered end.

But that is how the so-called “purchase funnel” works in auto retailing. Rest assured, it's only a concept for illustrative purposes. No human beings actually bang around inside cone-shaped metal objects.

Marketers use funnel diagrams to show how car shoppers start off with a broad range of considerations, progressively narrow their choices as they close in on a decision, and then eventually buy a particular vehicle from a particular dealer.

The graphic model has been around for years. But the activity inside has changed.

That's because the Internet has altered how people shop for cars. Still, “the purchase-funnel model is very much alive,” says John Gray, director-interactive sales for Team Detroit, an ad agency consortium. “How they shop is different, but the decision-making process is the same.”

What's changed most is that consumer behavior no longer necessarily follows a linear direction during the complex nature of car shopping.

“There is a lot of movement within the funnel, and the consumer still goes through all those stages, but not necessarily in a direct path,” says Libby Murad-Patel, director-strategic insights for the Jumpstart Automotive Group, a marketing firm.

Consumers may double back on their Internet research. Or they may rethink their choices after reading online car reviews and social-media dealership ratings. Or they may change their minds about what to buy after seeing a compelling interactive-ad offer.

Or who knows what? That makes it hard for marketers to figure out what resonates the most with consumers during their time in the funnel.

Ironically, when it comes down to it in this age of obsessive digital-ad metric measuring, it's hard to gauge what marketing efforts deserve the most credit for converting a click into a car sale. It could be a radio spot. Or, believe it or not, a newspaper ad.

“There is a big hole as to what's working,” Jason Deal, digital account director at Initiative, a marketing company, says at a J.D. Power Internet conference session called Fallacy of the Click.

“When it comes to what gets a click to a conversion, we tend to focus on the lower part of the funnel,” he says. “We're looking at the last impression. But that is not a great model. We need tools to measure what is going on further up in the process.”

High-in-the-funnel early marketing may deserve more credit than it gets for a sale, “but it's hard to convince a client of that,” Deal says.

Gray agrees last marketing impressions tend to carry the day, deservedly or not. It's like a baseball pitcher who closes the game and gets the win, even though a hurler he relieved may have pitched better.

“We are putting a lot of work into solving the problem,” Gray says of trying to figure out what digital marketing efforts work best — and when.

Adds Michael Keranen, American Honda Motor Co.'s assistant vice president-marketing communications:

“We were concentrating on the lower end of the funnel, on the people who are ready to buy. Now we also are looking at the upper funnel and those messages. It can be difficult but we need to maintain a balance between those upper-funnel messages and the call-to-action stuff at the lower end.”

Social media can sway car shoppers' final decisions, especially if they take to heart what Facebook friends say about a particular vehicle or dealer.

“Social media has a big impact but it is not going to get the credit,” Gray says. “We are seeing the influence of family and friends. Those are major influences of consideration that aren't getting measured.”

That's disconcerting to modern marketers who are what Deal calls “data masochists” in trying to metrically measure ad effectiveness.

“You have all this data, yet you don't have that single nugget that tells you exactly what works,” he says.

But he warns about getting too fixated on metrics. “We look at cost-per-spend and things like that, but then you look at a Pepsi ad campaign and say, ‘Wow, that was cool.’ Content still matters.”