Fickle Auto Buyers Pose New Challenges to Advertisers
A fundamental change has taken place in the US, car market over the past 20 years. What used to a necessary purchase for most people' has now become one that is almost completely discretionary as vehicle quality has improved dramatically and most homes now have more vehicles than drivers. Advertising in this type of market poses never-before-faced challenges to both manufacturers and dealers.
Thus far, the answer for manufacturers seems to be more brands and more models. There are more than 300 distinctive brands on the market and 70+ new models arriving in their dealers' showrooms. Incentive advertising continues apace.
Franchise dealers, on the other hand, are scrambling in all directions, trying to develop a strategy for a market that had no rhythm or certainty to it. Many dealers abandoned "old" media for a variety of new outlets, but results proved hard to measure. In a market such as this, it is good then to review how consumers decide on a given product and how they use the media to get there.
An easy way to understand this process is to consider the concept of "The Purchase Funnel," a decision-making process that consumers go through wherein product selections are slowly narrowed down to a final few options. CNW Marketing Research Inc. is a leader in understanding and explaining this phenomenon.
Each year, CNW briefs all the major auto manufacturers and the advertising agencies on its latest findings. As a general rule, they have found the following to be the norm, though there are both brand and regional variations:
- New-and used-vehicle buyers take anywhere from six to eight months to make up their mind.
- Different media play different educational and motivational roles over the course of the process.
- Would-be buyers rely heavily on their own previous ownership experiences - and those of their friends and relatives.
- On what they see on television and read in newspapers and magazines.
As consumers become more serious in their intentions, narrowing the list of possible models, certain media become increasingly important as information sources. These include the Internet (for features analysis) and newspaper advertising (for availability and pricing). It is important to note that fully 97 percent of all eventual vehicle buyers cite newspaper advertising as an important source of availability and pricing information.
About two months out from the final decision, new-vehicle buyers typically have narrowed their choice to two or three models and are deciding on what dealership to buy from. They rely heavily on newspaper ads, information from salespeople and their Internet investigations to make this decision. Information gathered from the dealership Web site, the manufacturer's Web site and high-visibility, third-party Web sites such as Kelley Blue Book are important at this time as well.
In the last phase of the cycle, beginning about two weeks from the purchase decision, typical new-and-used-vehicle buyers spend most of their time scouring newspaper ads to find the best deal and who has it.
Franchise and independent dealers, and those dealers involved in their dealer advertising associations, should bear these media usage realities in mind when constructing their advertising strategy, remembering which stages of the purchase decision they must target with their advertising - which media to use for particular messages, and what media work best in delivering the "closer" message.
New-and-used-vehicle buyers take anywhere from six to eight months to make up their mind and different media play different educational and motivational roles over the course of this decision-making process. In the earliest stages, would-be buyers rely heavily on their previous-vehicle ownership experience, the experiences of their friends and relatives, and on what they see on television and read in newspapers and magazines.