Tag Archives: JD Power

JD Power Roundtable: Social Media is Key for Ford

All accounts from last week’s JD Power’s Automotive Roundtable in Las Vegas suggest that Ford Group VP Jim Farley laid out a really compelling picture of how a major manufacturer looks at its opportunities in digital, and especially, social media.

Alex Snyder, in Dealer Refresh, quotes Farley as saying that TV gets 50 percent of its budget; Digital gets 25 percent; “Experimental” gets 15 percent; and Paper/Magazines get 10 percent. All of Ford’s advertising is now derived from things learned in social media, said Farley.

“Social media is such a strong influence on Ford that it actually plays a huge role in product and aftermarket development,” noted Farley, according to Snyder’s account of the talk. “Their advertising strategy is simply to ‘get people talking about us, not us talking about us.’”

JD Power: Auto Dealers Rapidly Adding Social, Mobile Media

JD Power, at its annual Automotive Roundtable in Las Vegas last week, laid out a convincing case that Internet and mobile marketing has made major headway among local auto dealers. While digital media comprised just seven percent of all auto spending in 2008, JD Power projects that it will jump to 22 percent by 2011.

“More creative methods of marketing will need to be demonstrated, requiring more effort than ever seen in the past,” said the researcher, which noted that 19 percent of online auto shoppers first log on to dealer sites, 41 percent go to manufacturer Web sites, and 40 percent visit third-party automotive sites.

Mobile is likely to be a big part of the boom in digital marketing for autos. The most useful mobile features include ad listings, payment calculators, maps and directions and dealer contact information. JD Power advises dealers to ask shoppers whether the email is for a mobile device so it can extend mobile-only offers.

Social media is also a major component. By integrating user-generated content and capturing “real-world” consumer opinions, marketers can improve their brand’s credibility among consumers. Strong digital content often spurs discussion among social media users, which can achieve a widely expansive reach among the target audience. Social media networking Web sites, such as Facebook, have greater reach among new-vehicle prospects than online search engines or portals-such as Google and Yahoo.

“Social media is now shaping customer expectations in any and every way,” said JD Power VP and GM Chance Parker, in a statement. “Listening to social media is increasingly on people’s radar screens and people are scrambling to understand it. It’s not enough simply to count the buzz, it is important to understand what that buzz really means to your brand.”

JD Power Roundtable: Mobile Catching On for Auto Shopping

At JD Power’s Automotive Internet Roundtable in Las Vegas this week, several speakers said that they believe mobile search and services are an increasingly important part of auto marketing –assertions backed up by JD Power research showing that 18 percent of auto shoppers use mobile during the car buying process, up from 15 percent in 2007.The same research said that mobile use was especially strong for luxury brands such as Land Rover, Mercedes and Jaguar.

Mike Sage from Universal City Nissan said he’s incorporated mobile into his marketing mix, and now has 600 txt messages flowing back and forth between dealer and customer every month, including text, video and click to call. “It doesn’t replace the Web site, but it is another source of information,” he said.

Sharon Knitter, the longtime Tribune Internet executive who now runs the mobile program for Cars.com, said the company launched mobile in 2007 with the twin goals of extending the cars.com brand, and to deliver “best of” content.

The mobile site gets four million page views per month, and is growing 10-15 percent per month. People are using the site when they are out shopping, she said. “They used to see a new model, and then have to go home to look it up” on the computer. Now, 39 percent call right from the lot; and 40 percent use click to call. Mobile is also used by dealers to send information to customers. “They say ‘give me your cell number’ and send them information right there.”

JD Power Internet Roundtable: Auto Dealers in Tough Times

JD Power’s Annual Automotive Internet Roundtable is being held in Las Vegas, amidst an industry that is being especially hard hit by the credit industry. Indeed, a bunch of dealers at breakfast this morning estimated that “90-95 percent” of their sales are made on credit, and not many are going through right now. Sales themselves have shifted dramatically with gas prices, with cars – especially low margin compacts – now outselling high margin pickup trucks by a substantial amount.

JD Power VP Gene Cameron put a positive light on the situation. “It is a good thing when a tribe gathers when there is stress in the culture. We have some stress, don’t we?”

The tough times could augur well for the more efficient marketing power of the Internet, and mobile. Or it could go the other way, as many dealers still think of the Internet mostly in terms of lead buying – and not always very good ones at that. One dealer told me he is cutting back his leads, and finding newspapers and TV more attractive again – especially as other dealers drop out, since he gets more attention with less clutter, and can negotiate better deals.

JD Power itself has concluded that dealers are “reining in” online spending, in line with other cutbacks. But certainly, the Internet is not just going away. In fact, its growth marches on. Every sign here is that the Internet – an umbrella term for third party sites, portals, OEM (manufacturer) sites, paid search and lead providers and email – is now an entrenched part of the auto ecosystem.

Most importantly, JD Power says that the use of the Internet in car shopping has hit 75 percent of all shoppers – the biggest leap ever, with a 5 percent boost from 2007.”Finding the right vehicle is more important than the right price,” notes Cameron. Mobile also grew this year, with 18 percent now using mobile to look up auto information in some form – especially for luxury brands.

The bigger question for the 800 dealers and OEMs registered for this event is: what works on the Internet? Ratings and reviews are generally cited. JD Power says that 63 percent of car shoppers are accessing vehicle ratings, and 38 percent are checking out dealer ratings. What doesn’t work, however, are request for quotes, whose use among shoppers are down from 31 percent in 2007 to 28 percent.

“The system is broken and shoppers know it,” says Cameron. According to JD Power’s stats, 50 percent don’t want to be contacted, and 29 percent say that the information they get is not accurate.

Alternatives to lead submissions are emerging. Cobalt’s Dealix CEO Anna Zornosa says its Dealer Select platform adds phone numbers and other pertinent information to let shoppers make their own connection.” A certain type of new car buyer likes that approach,” she says, noting that the 30 percent who submit RFQs, may be in the minority but they aren’t peanuts. “It represents another channel.”

“Whatever you do – shopping or browsing – you devalue other activities,” she points out.

Cars.com, meanwhile, continues to deemphasize leads and focus more on content. “A lead is sold 3-4 times,” says CEO Mitch Golub. But with cars.com’s site for new cars, a lead is ‘sold’ only once. “The business model needs to sort themselves out,” he says. He especially expressed interest in mobile, noting that 30 percent of visitors to cars.com’s mobile site are new to the company.

Autotrader.com has traditionally staked out a position as leading advocate against paid leads. “The biggest thing people want is inventory,” says CEO Chip Perry something borne out by JD Power stats.

It never changes. “In 1998, 80 percent of people picked up the phone or visited,” says Perry. “In 2008, 80 percent of people pick up the phone, do email or visit,” he says. “That doesn’t argue for pay per click or pay per call. It argues for a subscription based model.”

But on the dealer and OEM side, there is more confidence in leads, via search, as part of the solution. GM has enlisted 6,000 dealers with Cobalt for “trickle down paid search” coming from the OEM and dealer association level to dealers. Toyota has done the same in partnership with Doubleclick. “Same store leads are up significantly,” notes GM VP Ed Vogt.

JD Power: Auto Dealers, Dissatisfied, Ramp Up on Leads

Auto dealers have ramped up their use of online lead providers, according to a new Dealer Satisfaction study by J.D. Power, which was conducted in May and June with 4,141 respondents. They’ve gone from using an average of 5.6 lead providers in 2006 to 6.8 in 2008. In addition, more than half the dealers in the study said they subscribe to a lead notification program, which alerts dealers to an incoming lead via cell phone voice or text messages.

The jump in used car lead services suggests an underlying dissatisfaction with the quality and quantity of leads, says JD Power. On a scale of 1-1000, dealer satisfaction with leads is down to 581 from 613 in 2007.

Third party auto sites such as Cars.com are relying more on advertising. They are deemphasizing leads in favor of providing richer information that attracts car buyers. Their feeling is that there is a limited number of consumers willing to fill out lead cards, and that many leads are being sold over and over again and become stale. Many third party sites, however, say that their value is still judged by the number of leads they produce.