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Woman driving car, dangling car keys out the window and smiling

How Automotive Marketers Should Address Pent-Up Consumer Demand

The American auto market has always been driven by emotional purchases: you see a car that you love; you drive it off the lot the same day. Cars have long held an intimate place in the American imagination, aided by a media industry that loves auto—just think of iconic cars like the 1961 Ferrari 250 GT SWB California Spyder from Ferris Bueller’s Day Off, James Bond’s 1964 Aston Martin DB5, or the 1966 Ford Thunderbird from Thelma & Louise.

Consumers aren’t used to waiting to bring home their new wheels—but that’s exactly what they have to do these days, thanks to a global semiconductor shortage that’s upended not just the supply chain, but also the auto retail model that’s existed for over 50 years in the US.

The good news? Auto consumers aren’t going away. According to J.D. Power, there may be as many as five million consumers sitting on the sidelines waiting to buy a vehicle when demand constraints ease up. As such, the current auto landscape is characterized by pent-up demand: consumers are waiting for just the right moment to make their next big purchase.

These circumstances raise two big questions for auto marketers: First, how do you advertise for products that are in dwindling supply? And second, how can dealers and brands prepare to meet pent-up consumer demand once the supply chain returns to pre-pandemic levels—which, according to analysts at LMC, likely won’t occur until 2023?

The way automotive brands approach these questions will define their business for years to come. To that end, let’s dig into what auto advertisers can do to best situate their brands right now, and how they can prepare to meet pent-up consumer demand once the landscape stabilizes.

Automotive Marketing in the Current Landscape

First things first: even though dealers and brands may not have the product supply they’re used to, cutting back on advertising is a short-term solution that will likely hurt you in the long run. Once the supply chain stabilizes, consumers will want to spend, and brands who’ve cultivated brand recognition and loyalty throughout the disruption will reap the benefits.

The next question, of course, is how to market in the current automotive retail climate. Business as usual won’t cut it, because today’s consumer looks a lot different than the consumer of just a few years ago.

1. Market for Brand Loyalty

Since 2020, economic crises including the COVID-19 pandemic, major supply chain disruption, and inflation have piled up, leading to an increasingly stressed consumer base. According to a recent study from the American Psychological Association, almost three-fourths of U.S. adults report feeling overwhelmed by the number of crises facing the world today.

The psychological impact of chronic stress means many consumers don’t have the same cognitive resources for decision-making. Stressed consumers tend to prefer consistency over novelty and want simple answers to complex questions. In a crowded marketplace where consumers have a huge array of options, dealers and brands must ask themselves how to cut through the noise and foster brand loyalty.

One surefire tactic? Lead with brand values. Today’s consumers want to know what causes and core beliefs they’re supporting when they buy from a certain company. Gen Z and millennials in particular want to support brands who do more than just sell goods and services—they want to build relationships with companies that are making a difference in the world. 

Be wary, however, of coming across as inauthentic. Consumers today have sensitive B.S. radars—if you choose to focus on brand values in your marketing, it’s essential your messaging aligns with your actions behind the scenes.

2. Embrace Digital Marketing

The second thing dealers and brands can do to better advertise in the current auto retail market is to leverage digital marketing to its fullest potential. The stats speak for themselves here:

  • 70% of consumers prefer to shop online instead of going to a dealership.
  • E-commerce sales for auto and parts are forecasted to grow more than 30% in 2022, making auto the fifth-largest category in US e-commerce sales.
  • Automotive digital ad spending is expected to continue its steady climb (after a dip in 2020) up to 19 billion in 2023.

Of course, while digital interaction is increasingly important for auto consumers, that doesn’t mean dealers and brands should leave the physical world behind. Research shows consumers want the convenience of a digital-first experience, but they don’t want to let go of the personal touch that comes with working with a dealer in-store. Enter the next challenge for auto advertisers: bridging the digital-physical divide and making the hybrid consumer journey as seamless as possible. 

Fortunately, there are existing resources and solutions that can help automotive advertisers achieve that seamless consumer experience…

Preparing to Market to Pent-Up Consumer Demand

Now that we’ve covered how dealers and brands can market to consumers while disruption in the auto space endures, let’s look ahead to the fun stuff: meeting pent-up consumer demand once the supply chain stabilizes. The winning strategy here? Prepare, prepare, prepare.

Two must-haves for auto campaigns once the supply chain stabilizes: personalization and scale. Personalization is quickly becoming the norm, with 52% of consumers expecting personalized offers. In order to earn those jubilant post-economic disruption dollars, auto marketers will need to be able to:

  1. Know their consumers on a granular level
  2. Be able to reach them at specific moments, in specific places, and on specific devices
  3. Create individualized customer experiences at scale

Dealers and brands who prepare their tech and partnerships now will be able to meet pent-up consumer demand once the marketplace stabilizes. An automated, data-driven approach to digital marketing will be critical for building and reaching high-quality automotive audiences. When evaluating where to invest, two solutions should be top-of-mind: first-party data and automation.

Solution 1: First-Party Data

To create a personalized, stress-free car buying experience, you have to know your audience. And with third-party cookies on their way out, marketers will need to set up new systems for gathering information about their customers and meeting them in their moment.  

For auto dealers and brands, first-party data offers an avenue for providing personalization at scale. The right Customer Data Platform (CDP), for example, can collect and unify first-party data from multiple sources—including CRM, website, and ads—to build a single, coherent, and complete view of each customer. Marketers can then use the collective data to create targeted and personalized marketing campaigns that enable 1:1 communication with consumers.

Solution 2: Automation

If first-party data is the wheels that enable marketers to connect with consumers, advertising automation tools are the engines that allow marketers to use that data effectively. 

Personalization strategies are inherently nuanced, and achieving them at scale requires a level of flexibility and efficiency that is nearly impossible to achieve manually. The fragmented and complex marketing media landscape means advertisers are often slowed down by trying to cobble together holistic campaigns with disparate platforms, channels, and point solutions. Then, once campaigns are live, many marketers are tasked with manually stitching together data from multiple sources, which both wastes valuable time and can lead to human error, compromising the ability to glean any holistic insights.

Case in point? According to a recent Advertiser Perceptions report, marketing professionals use an average of nine platforms per campaign. That’s a significant number of disparate analytic sets to deal with! 

Reporting automation integrates data from many different sources, empowering marketers to view and pull reports from one place. Similarly, workflow automation empowers media professionals to use one system for all the tasks in their workflow, such as planning, negotiating, buying, reporting, analytics, optimizations, and even billing. These tools streamline the entire advertising process for media buyers—similar to how marketers seek to streamline the buying journey for customers—freeing up time for them to tackle the nuances of personalization.

Even more, advertising automation tools like dynamic creative optimization can build thousands of digital ads that vary in real-time for product-based retargeting, creative personalization, audience segmentation, and customer journey enhancement. This takes some of the pressure off auto marketers who are tasked with creating top-tier content for all the vehicle- and VIN-specific campaigns they want to run.

Finally, automated omnichannel platforms break down the silos that have come to characterize the marketing landscape and allow auto marketers to embrace a well-rounded marketing investment. These platforms make it easy for advertisers to test and learn on channels like streaming audio, connected TV, and OTT. 

Meeting Pent-Up Consumer Demand for Auto – In Summary

Whew! That’s a lot for automotive marketers to think about and prepare for. The good news is that despite economic disruption—or perhaps even because of it—the time is ripe for auto dealers and brands to chart lucrative new paths for themselves. 

Those who take this opportunity to further define and promote their brand values and forge genuine relationships with their audiences will find themselves well-positioned to earn their business—whether those audiences decide to purchase now or wait until the supply chain stabilizes. And investing in digital, first-party data, and automation will put dealers and brands at the forefront of advertising innovation, pushing the boundaries of what personalization can look like at scale. 

All in all? Vin Diesel said it best in the Fast and the Furious 9: “I choose to make my own fate.” In the face of supply chain disruption, economic crises, and a stressed consumer base, brands who choose to take the wheel now—pun very much intended—will be frontrunners in the years to come.

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