With elevated vehicle prices, CPO vehicles have become more attractive to buyers who don’t want to spend new car money but want the peace of mind that comes with warranty protection.
It’s becoming harder than ever to afford a new vehicle. The average American who bought a new car in September signed up for a $738 monthly payment. That’s a record high for consumers to consider when determining if they can afford one.
But that doesn’t mean that life stops just because there’s higher monthly payments, tight inventory, and fewer incentives. Despite these headwinds, consumers still need vehicles, and they’re willing to change their minds for the right opportunity.
As your trusted partner, Cox Automotive is right there alongside you to help navigate changes in the automotive industry, so that you can still drive more engagement with the consumer and continue to deliver more vehicle sales. With that in mind, let’s take a deeper look at what’s shaping up to be big CPO opportunities for 2023!
“ Demand remains robust for certified vehicles as the new market continues to be very supply constrained and CPOs offer the best substitute for consumers.”
– Jonathan Smoke | VP Chief Economist | Cox Automotive
Shoppers Still Need Vehicles
First the good news…shoppers still need vehicles, and there are many reasons that triggered Certified Pre-Owned shoppers to enter the market.
Our 2022 Gfk Content Influence research shows that the top reasons these CPO shoppers entered the market were:
29% – their previous vehicle was deemed unreliable or deemed too expensive to repair?
26% – triggered due to their previous vehicle having high mileage and/or it was older?
These shoppers can’t afford to wait for a better price. They know prices are high, and unfortunately, they can’t delay for that long.
CPO vehicle interest increases, and cross-consideration intensifies
The new car market continues to feelthe impacts of high-inflation and elevated prices, which is also making CPO vehicles more attractive to buyers who don’t want to spend new car money, however, want the peace of mind that comes with warranty protection. And we’re seeing a rising interest for certified vehicles on Autotrader:
Most impressive were the September CPO results:
+17% VDP Visitors Year over Year?
+26% Vehicle Details Page Views Year over Year?
Pencils are up +76% Year over Year?
Something else that should be on our industry’s radar, as interest increases, many shoppers are considering multiple brands and segments to find a vehicle that meets their needs. So getting in front of the CPO buyer, as well as staying side by side with them throughout their car purchase journey, should be a priority.
CPO Car Shoppers are Willing to Change Their Mind
A key thing all OEM’s and Dealers need to be aware of is that even in today’s market conditions, our 2022 Digital Influence research with GFK shows that car shoppers are still willing to change their minds for the right opportunity. You not only need to know if your vehicle is in their consideration set, but also what you’re up against competitively, from brand preference to inventory availability.
It’s a staggering statistic that 80% of CPO buyers bought vehicles that were different than what they originally considered. And just as important to call out, automotive advertising has persuaded them to research vehicles after exposure. Especially on third-party sites, which are valuable in helping shape brand decisions.
40% of CPO customers stated auto ads motivated them
to research a different car than they originally considered
That’s right… 2 out of every 5 CPO customers stated automotive ads motivated them to research a different car than they originally considered. This data should give you an extra incentive as you plan the year ahead to not only stay in front of your target audiences, but put an increased focus on getting in front of new audiences. Because the brand they thought they wanted to purchase, might not end up being the brand they ultimately purchase.
Where the Majority of a CPO Purchasers’ Time is Spent
Although the decision and purchasing timeframes have shortened over time, we now see more time devoted in the exploration phases for a CPO purchaser. Working with a partner to find shoppers further out from purchase, before they’re even giving you an indication that they’re doing anything, will offer the greatest opportunity for influence.
CPO buyers reported they spent the most time trying to find actual vehicles for sale, which should be of no surprise due to tight inventory. Of equal interest is that they are also heavily comparing different models by researching reviews, options, and pictures, as well as researching vehicle pricing.
Here are the Top 4 Activities research shows a CPO buyer spent the most time doing:
Find actual vehicles listed for sale
Compare different models using reviews, options or pictures
Research vehicle pricing
Browse vehicle images
CAMP 360 – Data That Drives
Cox Automotive understands your CPO shoppers. And with your partnership, our data can make your data drive efficient and more informed marketing decisions.
Your marketing partnership follows CPO buyers along the full purchase horizon, every step of the way. We’re seeing half of CPO site visitors 6+ months out from purchase, which is the optimal time to reach and influence them, before they have decided. It’s why you need a first-in-class data partner to help you find those shoppers, to not only get their attention, but keep their attention.
It’s more important than ever for advertisers to be front and center at the critical decision points along the CPO’s car purchasing journey in order to influence consideration and reinforce brand loyalty. Especially as you focus on your marketing strategy for 2023.
Because with the power of your Cox Automotive Marketing Partnership alongside you, our successes, data, audiences and destinations can be yours. Powered by advanced AI learning capabilities and proven by transparent reporting, CAMP 360 utilizes first-party data across the entire customer journey to ensure the right CPO message and content is reaching, and most importantly, resonating with CPO shoppers in the moments that matter most.
Sources:
2022 Gfk Content Influence Study Commissioned by Cox Automotive
2022 Gfk Digital Influence Study Commissioned by Cox Automotive
Autotrader September 2022 Site Metrics
COX Auto BTR based on Drive IQ; Visits = January 2021 – Dec 2021; Sales = January 2021 – Aug 2022
Are you ready for data that drives? To seamlessly integrate content and native advertising within a personalized environment? If so – find out more about a CAMP 360 data-driven marketing partnership by clicking HERE.
The Driving Forces for Automotive Digital Marketing in 2023: Mid-Year Predictions for Navigating the Road Ahead
As summer winds down and the fourth quarter of the year looms on the horizon, it’s hard to believe that in many ways the automotive market is still uncertain. Microchip shortages have now shifted to inflation concerns. Consumer confidence for the road ahead is waning. At Cox Automotive, I have spent the last few months assessing the automotive marketplace to help OEMs better navigate digital marketing decisions, as many begin planning for 2023. With that in mind, here are my top five automotive industry trends to watch while preparing for the year ahead.
Supply and Demand
Let’s be honest, the vehicle supply chain situation is still bad. There are approximately 75 thousand fewer vehicles than 2021 and ~1.5 million fewer than 2020. Right now, the days-supply for new vehicles is around 37 days.?
Continued chip shortages and supply chain problems are leading to low inventory, with up to 85% of car dealers predicting they will never return to pre-pandemic inventory levels.?
Low inventory does not mean car researching has stopped. Actually, we’ve seen quite the opposite.
As the post-Covid world reopens, we will return to car dependency, regardless of whether world events are favorable. Consumers are still shopping for new cars, and we can see the activity on Autotrader and KBB.com. Online shopping visitation for non-luxury vehicles has increased from 3.9 million in 2020 to 5.6 million in 2022.? Consumers are looking at an average of four brands and two car segments. About a quarter of shoppers are very flexible in their purchase behavior, shopping both new /used and luxury/ non-luxury categories.? And we don’t anticipate seeing that trend change much.
Finding the Sweet Spot in Digital Marketing
The good news is we are seeing that buyers are willing to wait for the right vehicle. They understand the current inventory issues, and approximately 85% of those who are likely to postpone are willing to wait 3 or more months for the right vehicle.?
We also know that about half of our site visitors are 6 or more months out from making their vehicle purchase, so OEMs definitely have the opportunity to influence. They also should think of Autotrader and KBB.com as the premiere digital marketing solution to reach and influence car shoppers long before they have made their purchase decision. With Cox Automotive’s DRiVEQ data technology, OEMs can reinforce brand messaging while shoppers are still influenceable.
Vehicle Pre-Order as the New Norm
The past two years have disrupted systems, and long-held instincts about automotive marketing that have guided the industry for years. About one-third of consumers are likely to pre-order their vehicles and expect delivery to take around 10 weeks. And, nearly two-thirds of shoppers believe pre-orders are the new normal for future vehicle purchases.?
As inventory shortages persist, shoppers believe that custom ordering will allow them to get what they want in the future, even if it takes a little longer for their vehicle to arrive. Which has been shown to lead to increased satisfaction and loyalty.
The Rise of Digital Retailing
Recent studies show that 7 in 10 consumers agree that by 2023 most people will prefer to shop for a car online versus visiting a dealership in person.? The fact that this number remains unchanged from 2021 suggests that this is almost definitely becoming our new normal. And it’s not surprising given that automotive digital retailing has proven to deliver a better experience for shoppers and dealers alike.
In 2020, we significantly moved the needle as an industry on improving consumer satisfaction with the car buying process, reaching the highest levels we’ve ever seen. In 2021, we saw an overall dip due to low inventory levels and high prices, but buyers who completed more than half of the process online maintained satisfaction levels that were in line with 2020.?
It’s interesting to note that when we talk to dealers, fewer than 2 in 10 believe that OEMs will create online sales channels that completely bypass the dealership network. In fact, most believe that dealers will remain an important part of process of buying a car.
Almost half of dealers see a future where their on-site inventory is greatly reduced and they start functioning more like experience centers or showrooms that deliver vehicles to consumers from a distribution center for OEMs.? Ultimately, what happens with this trend will be predicated in part on what consumers demand, Whatever the outcome, automotive digital marketing will need to adapt along with it.
Electrify Your Digital Marketing
It’s no secret, rising oil prices are increasing consumers’ consideration of electric vehicle and hybrid vehicles. Affordability and fuel efficiency are becoming more important to shoppers, and we’re seeing an increase in search habits, based on these features.?
This massive growth in electric vehicle (EV) volume will not be possible without shoppers being receptive to EV technology. And it appears as we see consumer shifts in interest, with the top barriers to adoption, a softening over the last three years.?
Another way to make EVs more affordable is through leasing. According to Experian, roughly 1 in 4 EVs acquired in 2021 were leased. But one thing we’ve learned is that leasing penetration varies greatly across EV brands. So while approximately only 17% of all Teslas were leased in 2021, leasing penetration for other OEMs reached nearly 50%. That’s a stark contrast and significantly higher than the average leasing rate of ICE vehicles, which stands at around 27%.
Something else we discovered about EV lessees is that fewer than half (47%) of them were leaning towards leasing when they first started the shopping process – much lower than the typical ICE vehicle lessee, of which approximately 68% leaned towards leasing. Given what we are learning about EV prices, it’s no surprise that those who end up leasing an EV are most often influenced to do so because of the lower monthly lease payment.?
So, What Does This Mean for Automotive Digital Marketing?
Shopping for a new car will never look the same most likely. Data and intelligent marketing strategy is more important than ever. Consumers are still making decisions and considering their options as well as browsing with intent despite economic obstacles.
But as we’ve seen, their behaviors are shifting, and rapidly. However, car shoppers are still impressionable, and you still have the opportunity to influence them with the right message at the right time during the buying process. However, in order to have success in digital marketing, your communication strategy needs to adapt in 2023 to reflect these evolved buyer’s needs and wants. When you do this, closing the gap between OEM campaigns and auto sales becomes possible.
Are you ready for data that drives? To seamlessly integrate content and native advertising within a personalized environment? If so – find out more about a CAMP 360 data-driven marketing partnership by clicking HERE.
Many have heard the phrase “content is king” – a saying coined by Bill Gates nearly 30 years ago. At that time, it was the rise of the Internet that forever changed consumer behaviors and pushed content marketing into the mainstream.
Fast forward to now, and content marketing is once again at the forefront and gaining significant momentum. With the pandemic fueling a shift to e-commerce, many businesses across all industries are rethinking how to most effectively connect with consumers through relevant content. Because the overall goal has always been, and will continue to be, to maximize your content to DRIVE consumer decisions.
What Is Content Marketing?
“ A technique of creating and distributing
valuable, relevant and consistent content to
attract and acquire a clearly defined audience –
with the objective of driving profitable customer action.
– Content Marketing Institute
This is just one definition of many that I’m sure you might have seen before from various sources. But, one theme across all definitions, is that content marketing is about education, not promotion. The keyword here is “valuable”. If the content provided doesn’t add value to a shopper’s journey, then it likely won’t be effective.
There are many advantages to content marketing that work, such as building customer trust and loyalty, improving SEO, increasing your reach to new people and audiences as well as increasing website traffic. And although those main four goals of content marketing have not changed much over the last few years, what HAS changed in the automotive shopper’s journey are the behaviors as well as preferences in how, when and where to maximize your content.
The Stages of the Shopper Journey
The automotive consumer journey contains two important stages. Stage 1 includes: explore, consider, select, and buy. Stage 2 includes that last and final stage in a shopper’s journey: own.
An exceptional automotive content marketing strategy reaches a consumer in all stages of their journey – it accompanies them as a valuable resource in all instances whether they are a shopper in market for a vehicle (in the Explore, Consider, Select, or Buy stage) or an owner (in the Own stage) looking for general car care information. Content marketing allows you to cover all parts of the journey at one time.
When focusing on Stage 1 – the shopping phase – Cox Automotive recently partnered with research experts GFK on our 2022 Content Influence Study. Based on surveys among over 2,000 new vehicle buyers and shoppers, we found that an overwhelming 83% used content marketing sources when researching their upcoming vehicle purchase.
Notably, this percentage is down from 88% in 2021 – likely the result of consumer shopping behaviors starting to normalize as we begin to put the pandemic in our rearview mirror. Regardless, 86% said they plan to use content marketing sources again when researching future vehicle purchases. And this trend is not unique to automotive. In a recent study by Lucidpress, 85% of marketers surveyed report an increase in demand for content among their customers over the last year – giving many businesses good reason to increase their content marketing budgets even more in 2022.
Types of Content Consumers Prefer
It’s no secret, consumers expect personalized interactions, and nearly all of them get frustrated when this doesn’t happen. And automotive buyers are no exception. Yes, content marketing focuses on distributing valuable and relevant content to a reader, but consumers definitely have preferences on what types of content they are willing to view and engage with, as well as what formats they prefer.
To help us better understand where content marketers should invest in 2022, in a recent Cox Automotive study we asked shoppers to tell us what they prefer the most – content that you read or content that you watch. We also asked what type of content marketing sources have the greatest influence over vehicle selection. The results tell us that shoppers today have a higher preference for consuming content through videos that are both engaging as well as interactive.
Find the order of preference listed below in types of content that had the GREATEST influence over vehicle selection in the purchase process:
Consumer ratings & reviews (43%)
Online video reviews from an expert (43%)
Online test drive videos from an expert (41%)
Official expert car ratings & awards (40%)
‘Top lists” of best vehicle models (37%)
Side-by-side comparisons of models (36%)
Articles about vehicles, new tech/features (30%)
BEST PRACTICES: When creating video marketing content, it’s important PRIOR to creating the content to know the needs of your audience and make sure they are addressed from beginning to end. According to our research, consumers aren’t looking for a lot of special effects or entertainment. The main point of your video should be to add value to their journey, and that is accomplished by giving them content which they find informative, simple, informational, and educational.
Keys to Success
The keys to success when it comes to creating and maximizing your content marketing efforts can be placed in 2 categories: those related to process and those related to content.
PROCESS:
Strategy – Have a documented content marketing strategy. The Content Marketing Institute has found that having a documented strategy is highly correlated with success because it will help align your team around common goals, makes it easier to determine which types of content to develop, and it keeps the team focused on documented priorities.
Dedicated Focus on Content – Research shows that having dedicated resources is a common characteristic across companies that are most successful in content marketing. You need a partnership that can help drive deliverables and is responsible for keeping your content up to date.
CONTENT:
Provide Value – Prioritizing consumer information needs over promotional messages is the key. Just remember that it isn’t considered content marketing unless it provides value to your customer.
Stand Out – Part of truly maximizing your content is making sure to differentiate YOUR content from the competition. Your brand has a niche: there are things that distinguish you from the rest of the automotive world in the minds of your audience. Tap into these things every time you create a piece of content.
Customer Journey – Craft content based on stages of the consumer journey. By diversifying your content across each stage of the journey, your experience will be more personalized to your customer.
No matter WHAT type of content marketing you’re focusing on in 2022, make sure to leverage your Cox Automotive Marketing Partnership team to make sure your content is reaching the right shopper, at the right time, with the right message. CAMP 360: it’s more than media, it’s data that drives.
Want to see all the highlight stats from the GFK research that was conducted on content marketing for Cox Automotive? Click HERE for immediate access!
With inventory and market disruptions continuing to tighten the in-market car shopping journey, OEMs in today’s times have additional challenges when it comes to successfully reaching auto shoppers. It’s essential they span the entire digital purchase journey in every stage to inform and engage potential new vehicle shoppers. Our May webinar was packed with advice, insights and useful strategies from Cox Automotive experts on that very topic – how to empower and stay alongside shoppers during the purchase process. If you missed this engaging discussion, you can watch the replay here:
The Cox Automotive Research and Market Intelligence team is excited to announce the latest Digital Influence Study results. I recently had the pleasure of presenting these findings during an AIADA AutoTalk webinar, and here are the top three things you need to know:
1. There is good news on the horizon for OEMs
2022 is showing great potential for rebounds in the automotive industry. While we don’t expect supply constraints to ease until later this year, new vehicle inventory levels are already showing some early signs of recovery. In fact, Cox Automotive’s new vehicle inventory index increased in Q1 for the first time since Q4 of 2020.1 With increased inventory, there is an excellent opportunity to influence new vehicle buyers. According to our study, 74% of new vehicle buyers purchased a different vehicle than they initially considered.2
2. The purchase process has accelerated with shoppers spending less time online
New vehicle shoppers are spending less time in market. In 2019, shoppers spent approximately 100 days in market, and now that number has dropped to 83 days. The time new vehicle shoppers spend on exploration and consideration has accelerated. Still, these two stages account for the bulk of the shopper journey, which includes four stages overall (explore, consider, select buy). In addition, new vehicle shoppers are spending less time online, but it by far remains their top shopping source. In 2019, new vehicle shoppers spent an average of 6 hours 44 minutes online, which has now dropped to 5 hours and 22 minutes.2 For this reason, marketers have less time than ever before to make an impression on buyers.
3. Third-party sites remain highly influential in the new car buyer shopping journey
New vehicle shoppers visit an average of 3.7 websites, and almost 70% of those consumers visited a third-party site during their shopper journey. New vehicle shoppers have expressed that third-party sites and OEM websites provide unique and complementary benefits, listing third-party sites as knowledgeable, trustworthy, reliable, and unbiased. Shoppers pair this information with the help of OEM sites, listing these sites as having specific, up-to-date, and comprehensive information for vehicles.2
In addition to these three key takeaways, it is essential to understand that a well-executed digital strategy makes or breaks your plans. Automotive ads play a more significant role in purchase decisions than ever before, with almost 40% of new vehicle shoppers saying that auto ads were helpful in their decision-making process.2 This is up from just 15% in 2019! As macroeconomic trends continue to influence the shopping journey, relevant and real-time messaging will continue to influence new vehicle shoppers. Being present at the critical decision points across the purchase horizon is key to influencing consideration and reinforcing brand loyalty.
1 Q1 2022 Cox Automotive Dealer Sentiment Index
2 2022 Cox Automotive Digital Influence Study; data is reflective of in-market shoppers who eventually purchased
When it comes time to buy a new car, most of us will spend hours upon hours seeking the best answer to a simultaneously simple and daunting question: Which car should I buy? We’ll seek information and guidance from trustworthy sources – often via Google – to help us find that one special car, truck, SUV or minivan that best meets our needs and wants.
But the information gathering that goes into that decision begins long before those first intent-driven Google searches. Your next car purchase process is in fact being influenced by information being put in front of you today. Through regular content consumption you’re absorbing what’s new, what’s good, what’s popular, what’s hot, what’s safe and, of course, which vehicles took home this year’s Kelley Blue Book Best Buy Awards.
The messenger? Trusted, unbiased editorial content.
Cars and Content: A Symbiotic Relationship
At Autotrader and Kelley Blue Book we create content with three primary aims:
Inform and educate visitors
Attract visitors
Expand brand awareness
As an example, we publish around 300 in-depth vehicle reviews every year. That content serves those first two goals of 1) making our site more useful for our visitors and 2) attracting millions of active car shoppers every month by helping us ranking highly in related Google search results.
But it’s that third goal that’s getting more attention from automakers.
The content we create to maintain and expand our own brand awareness, familiarity and affinity among those not yet in market also drives a lot of that same value for the brands and models we’re out there talking about.
For instance, our coverage of a new model can generate millions of incremental exposures across Apple News, Google Discover, YouTube, TikTok, Facebook, etc. That’s great for us, but there’s also tremendous value for that automaker. Respected editorial content goes places and impacts people in ways marketing typically can’t, and we know it affects eventual buying decisions down the road.
There’s an increasing number of ways automakers can amplify that powerful content and coverage, and our sales and marketing folks are helping more and more of our partners do just that.
The Biggest Audience
With 88% of shoppers using content to research a new vehicle1, editorial makes our sites more useful, valuable, and helpful for these consumers. KBB.com is the leader in organic market share with the best bounce rates, time spent on-site, and pages viewed. This indicates we not only have the largest share of the market, but the most qualified share, as well.2 Autotrader and KBB.com together reach almost 60% of all car buyers and account for more than half of the time car buyer spend on third-party sites.3
As the auto industry faces ongoing supply chain disruptions that push shoppers further out from purchase, editorial content on our sites will continue to evolve as we reach, attract, and engage shoppers across the buying horizon.
1 2020 Nielsen Content Influence Study Commissioned by Cox Automotive
2 Organic Search Traffic Market Trend, January – November 2021
3 2021 Car Buyer Journey Study
For 12 years, the annual Car Buyer Journey Study, conducted by Cox Automotive, has analyzed new and used car buyer survey data to track trends in car shopping behavior over time. In 2021, we found that inventory disruptions have impacted many facets of the new car buying journey. Here’s what our latest study shows.
The chip shortage affected the new car buying process, but shopper satisfaction remains high.
Our 2020 study results found that a record-high number of new car buyers were satisfied with their shopping experience, and 2021 satisfaction levels were nearly as high as the prior year. While in 2020 74% of new car shoppers were highly satisfied with the overall shopping experience, that level dropped slightly to 71% in 2021, with overall satisfaction still higher than pre-pandemic levels. Not surprisingly, purchase experience suffered due to inventory frustrations. In addition, inflated vehicle prices caused declining buyer satisfaction on the price paid and trust in the deal.
So, what motivated car purchases in 2021?
Due to limited inventory, buyers spent less time in market. For new car shoppers, time in market dropped from 95 days in 2020 to 91 days in 2021. Many shoppers expressed that they were making their purchases sooner than expected because they feared missing out on the vehicle they were able to find. So what three factors motivated new car shoppers to move more quickly in 2021?
With GDP growth at the highest since 1984, the strong U.S. economy drove purchases.
Shoppers were driven to purchase a vehicle for safety and convenience factors. Many believe the intrinsic value of ownership currently outweighs the cost.
Buyers were motivated by attractive trade-in offers, which led to the sale of their previous vehicle.
Digital engagement boosted confidence and satisfaction during inventory shortages.
Our 2021 findings revealed that higher digital engagement boosted consumers’ confidence in price and overall satisfaction. Consumers highly engaged in the digital retailing process seem to have weathered the impact of limited inventory, and they were more satisfied with the shopping experience and time commitment. This is likely driven by better vehicle selection and less sticker shock in the digital shopping process. So, what can we learn from this segment of shoppers?
Most digital buyers were more focused during their online search. They spent less time shopping online because they were more concentrated and efficient in their search.
Third-party sites were the most relied upon resource for buyers, with nearly 3 out of 4 depending on third-party sites to support them in their purchase process.
Due to limited inventory, digital retailing was vital for shoppers who felt economic pressure to make a decision quickly.
In 2022, digital engagement will continue to influence brand loyalty.
As the 2021 Cox Automotive Car Buyer Journey Study has shown, economic factors heavily impacted new car shopper satisfaction. For 2022, opportunities remain to rebuild brand loyalty, which eroded due to inventory pressures. OEMs can focus on brand loyalty through:
Leveraging digital media to drive brand messaging to near and in-market shoppers.
Almost 40% of intenders are willing to wait up to six months for the right vehicle, while about 1/3 of intenders were likely to pre-order their vehicles. It’s a very fluid shopping experience that requires brands to stay engaged, as shoppers may act more quickly than they originally intended.
Continuing to transition customers to a more digital experience.
As our study showed, digital users tend to be more brand loyal. Instant Cash Offer was the most used trade-in tool among study participants. This is a strong signal that someone is entering the car buying process and the first digital step they could be taking toward researching new vehicle options.
Partnering with endemic sites that are crucial to the research and shopping experience.
Cox Automotive sites experienced visitor growth in 2021, with a 12% increase in unique visitors and a 17% increase in site visits. With 6 in 10 shoppers relying on Cox Automotive as a part of the car buyer journey, it’s meaningful to leverage your partnership to maintain brand loyalty with your customers.
Statistics and data based on the following sources and studies:
2021 Cox Automotive Car Buyer Journey Study.
Cox Automotive Wave 2 Chip Shortage Research – August 2021
Estimated reading time: 3 minutes
The Cox Automotive Research and Market Intelligence team is excited to announce the latest Digital Influence Study results. I recently had the pleasure of presenting these findings during an AIADA AutoTalk webinar, and here are the top three things you need to know:
1. There is good news on the horizon for OEMs
2022 is showing great potential for rebounds in the automotive industry. While we don’t expect supply constraints to ease until later this year, new vehicle inventory levels are already showing some early signs of recovery. In fact, Cox Automotive’s new vehicle inventory index increased in Q1 for the first time since Q4 of 2020.1 With increased inventory, there is an excellent opportunity to influence new vehicle buyers. According to our study, 74% of new vehicle buyers purchased a different vehicle than they initially considered.2
2. The purchase process has accelerated with shoppers spending less time online
New vehicle shoppers are spending less time in market. In 2019, shoppers spent approximately 100 days in market, and now that number has dropped to 83 days. The time new vehicle shoppers spend on exploration and consideration has accelerated. Still, these two stages account for the bulk of the shopper journey, which includes four stages overall (explore, consider, select buy). In addition, new vehicle shoppers are spending less time online, but it by far remains their top shopping source. In 2019, new vehicle shoppers spent an average of 6 hours 44 minutes online, which has now dropped to 5 hours and 22 minutes.2 For this reason, marketers have less time than ever before to make an impression on buyers.
3. Third-party sites remain highly influential in the new car buyer shopping journey
New vehicle shoppers visit an average of 3.7 websites, and almost 70% of those consumers visited a third-party site during their shopper journey. New vehicle shoppers have expressed that third-party sites and OEM websites provide unique and complementary benefits, listing third-party sites as knowledgeable, trustworthy, reliable, and unbiased. Shoppers pair this information with the help of OEM sites, listing these sites as having specific, up-to-date, and comprehensive information for vehicles.2
In addition to these three key takeaways, it is essential to understand that a well-executed digital strategy makes or breaks your plans. Automotive ads play a more significant role in purchase decisions than ever before, with almost 40% of new vehicle shoppers saying that auto ads were helpful in their decision-making process.2 This is up from just 15% in 2019! As macroeconomic trends continue to influence the shopping journey, relevant and real-time messaging will continue to influence new vehicle shoppers. Being present at the critical decision points across the purchase horizon is key to influencing consideration and reinforcing brand loyalty.
1 Q1 2022 Cox Automotive Dealer Sentiment Index
2 2022 Cox Automotive Digital Influence Study
2021 was wild. Between inventory shortages, changing consumer behaviors, and the ongoing pandemic, the team at Cox Automotive is looking ahead to what’s in store for 2022. Our recent webinar focusing on the year ahead was packed with strategic updates from several Cox Automotive executives from across the business. Here are some of the key takeaways from the event.
From Michelle Krebs, Senior Industry Intelligence Director, Cox Automotive
While the story this year has been the global computer chip shortage and subsequent production cuts, vehicle inventory crunch and ultimately the impact on sales, it’s important to also note the fast rise of electrified vehicle sales as we head into 2022. From an industry trends perspective, the key factors for 2022 will be:
New Vehicle Sales: We anticipate the chip situation will improve progressively throughout 2022. But we expect inventory to continue to be very tight as it will take time to re-fill the pipeline. As a result, prices will stay high. We expect demand to continue to be extremely strong, and economic factors such as credit availability and interest rates support a strong market. So, we are forecasting 2022 sales to come in at 16 million and increase to 16.7 million in 2023.
Electrified Vehicles: While new vehicle sales fell 13% through the end of Q3, electrified sales soared by 60%. Market share is now 10% of the market – double the year before. The bulk of that is hybrids/plug-in hybrids. Our Kelley Blue Book Q3 Brand Watch showed one in four shoppers considered an electrified vehicle – the highest interest we’ve ever seen. We believe that interest and sales will grow especially as more models are introduced. More models will continue to enter the market from more brands – with more than 100 electric models predicted by the end of 2024.
Economic Trends: Demand will be strong. More buyers, many who postponed purchases, will jump back into the market as inventory improves. Prices both new and used will remain high. Consumers recognize they will have to pay higher prices and may have to wait for the vehicle purchase. We’ll likely see more consumers put down deposits – sort of “order” vehicles, and more of the buying process will keep moving online
From Kevin LeSage, Director of Digital Marketing, Autotrader
With the macroeconomic trends in mind, it’s important to consider how to translate these trends into actionable OEM to dealer digital marketing plans for 2022. As Michelle mentioned, the buying process continues to move online. The key to future success is using efficient digital marketing tools to reach the right customer. Here are some key strategies to consider:
Quality audience is key: Accuracy in audience data will be more important than the platform itself. Look for partners that build audiences in real time (by the hour). If your data isn’t in real time or relevant, it creates waste and frustration for consumers being served content that doesn’t make sense for where they are in their journey.
Create long-term customers: It’s more important than ever to understand consumer behavior with a 360-degree, up-to-the-hour view of automotive consumers. With leases being extended and many shoppers willing to wait for inventory to improve, you have to be able to meet the customer where they are in an ever-evolving shopping journey with content that’s relevant and keeps them interested.
Normalize and activate the data you already have: Most OEMs and dealers can start innovating with the data that they already have at their fingertips. Once you can ensure the existing data is normalized, go get new customers into your CRM to keep feeding the data machine. You need really great first-data partners to better understand your customers.
From Scott Markle, Senior Director of Product Management, Cox Automotive
By understanding the economic trends and how that translates into digital marketing strategies, it gives OEMs and dealers a place to start in 2022 tactical planning. The products and partners you choose can make or break the efficacy of your data. Here’s some things to keep in as you look to the future:
Consumer privacy and transparency: Consumer concern around privacy is on the rise, and they are demanding more transparency. With more data regulations on the horizon, it’s important to find partners acutely tuned in to product innovation. You have to build trust with consumers through the value being provided.
First-party consented data: First-party consented data is the new foundation for audience and activation. OEMs and dealers must think about how your partners are collecting data and ensure they are compliant. Ask your partners if they offer a clean room as a way to share data safely. This helps clients unlock more value from data while providing flexibility for custom analysis to create really unique predictive data.
The future is connection: In 2022 and beyond, building a real connection with consumers, based on authentication and persistent identifiers will be the key to success. If you maximize your first-party data, you’ll be able to understand who your consumer truly is and what they truly want. This takes partnerships, like CAMP 360, to build a long-term view of your client and allows you additional data sets.
Want to learn more about how CAMP 360 can help you prepare for 2022 and beyond? Click here.
Estimated reading time: 3 minutes
2021 Path to EV Adoption Study
In addition to the microchip shortage and other industry challenges, there is major buzz around the future of electric vehicles and accelerated adoption rates. Auto manufacturers are launching more EVs, opening more factories, and investing in more battery innovations. In fact, EV market share is predicted to grow nearly seven times by 2030.1 With this current climate in mind, Cox Automotive conducted research in June and July of 2021 with more than 4800 consumers to better understand market perceptions and provide insights to OEMs around barriers to EV purchase.
EV Consideration is Healthy
Nearly 4 in 10 consumers are currently considering an EV for their next vehicle purchase, with Gen Z and Millennials leading the growth in consideration.2 However, when we dive further into asking consumers how certain they are on purchasing an electric vehicle, their intentions wane. Conversion from consideration to sales will be challenging as shoppers are still trying to solidify their decisions based on the purchase barriers holding them back.
Barriers to Adoption
What’s interesting is that the top five barriers to electric vehicle adoption remain consistent when compared to our previous EV study in 2019. The good news is that some of these concerns are decreasing when compared to the previous results. Across consumers, anxiety is lowering around lack of charging stations, battery holding a charge and limited mileage range, as innovations in this segment address these concerns. However, costs including EV price and battery replacement are still high on the list of apprehensions for consumers.
Brand Loyalty and Content Marketing Pave the Path to Purchase
Brand loyalty is crucial to driving electric vehicle adoption. Our research asked respondents how likely they would be to purchase or lease from the same brand if their current brand produced only EVs after 2030. A whopping 84% of considerers said they would likely re-purchase from the same brand, while nearly 50% of Non-Considerers said the same.2 Most current brands have low to moderate brand awareness, as consumers are not savvy on what EVs are available in the marketplace. There is a massive opportunity for brands that want to win in the EV segment to invest in CRM, elevate brand trust, and maintain strong quality for the consumers to stay with the brand. Start introducing consumers to any EV concept vehicles or upcoming EV launches to gear them up for your brand’s future line-up.
Third-Party Online Presence is Key to Future EV Success
Three in four vehicle buyers leverage third-party sites for their research and shopping needs. Autotrader and KBB.com were the top two most visited sites among EV buyers.2This is because one of the most effective ways to reach electric vehicle buyers is through content marketing. Ninety-three percent of EV purchasers consumed content marketing as a part of the research process.2 This type of content can provide objective testimonials for shoppers to better understand the EV ownership experience. Expert and consumer ratings and reviews, articles, and side-by-side comparisons were crucial to guiding consumers to make the best-informed decisions for their EV purchase.
As an industry, we are on the path to widespread EV adoption. While perception and consideration are improving among consumers, it will be crucial for OEMs to strategically focus on marketing initiatives that inform and educate EV shoppers.
Learn more about how CAMP 360 can connect you to EV shoppers.
