18 Feb Does Formal Attribution Exist in Automotive Marketing?
I had an interesting conversation with a client today regarding attribution of sales in regards to marketing efforts. We all know dealerships want to attribute sales to a marketing effort in order to determine a return on their marketing investment. I do feel based on KPI’s and sales reports dealers can get an idea of whether or not a marketing campaign is providing a “healthy,” return, or if it simply is not working for them.
My definition of ROI is simple, as I learned studying Finance in college, divide your net profit by your net assets, and you have your return. If I invest $1,000 in Apple stock, and 6 months later it is worth $1,500, I can cash out with a $500 return on my investment. That is a true return on my investment. If I place a $100 wager that the NY Jets will beat the Patriots, and the odds are 5:1 in favor of the Patriots and the Jets win, I get $500 back, or a $400 return on my investment. That is a true return on my investment.
I believe this formula does not exist in the automotive marketing world. If you ask someone, hey what made you by that Mercedes after all? How often is their response going to be, because of a direct-mail flyer I got, because of a commercial I saw, or I loved their radio jingle, or I clicked on a display ad. Never. Buying a car is a complicated process, which typically involves months of research. Remember, buying a car is the second most expensive purchase the average consumer will make besides a new house. Also it is important to remember consumers do not typically react immediately. A successful campaign touches a consumer many times over a long period of time, typically 3-6 months, in order to truly be effective. Frequency and repetition is critical.
As an employee of a vendor, I believe our campaign helps influence consumers to purchase from our clients we advertise for, and helps drive quality traffic to our dealerships website, so they can shop their online inventory. We then use RL Polk’s sales reporting, to verify how many consumers that we touched purchased a vehicle at the dealership. Does this mean we are taking full attribution? Of course not, as marketers, we understand several media influence a consumers decision to ultimately purchase from that dealership. Not only that, but once the consumer walks through the front door, there are a tremendous amount of variable’s that ultimately influence that consumers decision to purchase a vehicle at that dealership. Was the salesmen friendly? Would they match the competitors offer? Do they have the right color? Do I have good enough credit? Are the online reviews negative? The list goes-on and on.
Even if the consumer submitted a lead through AutoTrader, or walked in with a direct-mail piece, or mentioned an advertisement they saw or heard, in my opinion that does not mean that media was the only reason they bought a car. I am writing this post to remind dealerships all over the country, do not let your vendors take ownership of your sales. You sell the cars not them. Use analytics and sales reporting to determine if the campaign worked, and if the KPI’s are there, great you found a strong vendor! But remember, no one media sold the car, your sales person sold that car. Vendors taking credit for sales, and dealers giving them credit for sales creates an unhealthy relationship between vendors and dealers. We are partners helping each other grow our businesses.
I would love to hear from dealers/agencies or anyone who would like to chime in in regards to formal attribution, and their opinions. Thoughts/opinions are welcome here!
Senior Account Manager at CityTwist | Automotive Marketing Expert | Google Analytics Expert |