AUTO TRENDS INDUSTRY. Innovative strategies for segmenting and targeting auto audiences
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1 AUTO INDUSTRY TRENDS Innovative strategies for segmenting and targeting auto audiences
2 Table of Contents 1 Segmenting Your Market: One Brand, Many Audiences Competitive Activation: Targeting Unique Audiences 3 The Electric Revolution: A Tesla Spotlight
3 Introduction Car buying reached record peaks in 016, but after sales plunged 4.7% in April of this year experts believe the pendulum may be swinging back in the other direction. According to the Wall Street Journal, car sales are down this year, and even the previously dominant SUV sales have flattened. Nevertheless, the industry maintains sparks of opportunity. Companies like Ford and GM are investing heavily in technology innovation, while the sale of electric and hybrid vehicles increased by 74% year-on- year, and brands like Tesla drive powerful public interest surrounding their Model 3. As auto brands tighten their belts, it s more crucial to increase pipeline and sales especially through digital channels. The buying cycle is long, and almost all car research begins on a screen, whether through search engines, websites or advertisements. This report uses real data from brands like Honda, Toyota and Mazda to break down tactics for advanced segmentation, competitive analysis and audience activation. Learn how to identify unique attributes of your audience and target high-value segments before the competition. We will also spotlight Tesla, and the science behind their PR success.
4 1 Segmenting Your Market: One Brand, Many Audiences
5 Toyota Audience: Three Levels of Intent The most fundamental phases of the car-buying cycle can be broken into three buckets: research, intent and ownership. In the chart below, we see that although these groups are all part of the Toyota audience, they each have distinct characteristics. While it s valuable for Toyota to understand their customers, studying their pre-purchase audience can help them speak to aspirational buyers more effectively. The data below indicates that although Researchers and Intenders will appreciate the practicality of their Toyotas after they become Owners, until then they want a car that expresses their personality, has extra horsepower and sports plenty of extra features. These elements should come through clearly in campaigns targeted to a younger pre-purchase audience. Toyota Audience Segments Researchers Intenders Owners Description People who research Toyota cars and models People who seek out a local Toyota dealership People who own or lease a Toyota car Age Skew the youngest, between older Millenials and Gen X (aged 5-44) Wider range of age groups, between 5-54 Variety of ages, but skew older, with year olds over-indexing the most Attitude Indexes* I d pay extra for an engine with more horsepower +3% +4% +1% My car should express my personality +15% +11% -6% The technologies offered in a car s dashboard influences my decision to buy +9% +10% -5% *Based on likelihood to agree (+3% = 3% more likely than average to agree with the statement) Segments built using Hitwise AudienceView, pulled over 4 weeks ending 8/19/017.
6 Honda Seekers: Segmenting by Class Even after you segment by purchase intent, lumping the Toyota audience or Honda audience together is far too broad. The differences between someone interested in a Honda Fit versus a Honda Odyssey are vast. Segmenting by both make (Honda, Toyota) and class (hatchback, SUV) provides valuable insights for better segmentation, ad strategy and creative. In the example below, we see how varied Honda Seekers are, depending on which class of car they are interested in. Based on the Mini-Van insights, Honda might tailor their Honda Odyssey ad campaigns towards Millennial moms, and depict them buckling in a female toddler in the back seat. Or they might pursue promotional partnerships with Cars.com or KBB, which Mini-Van seekers are more likely to visit than Hatchback or SUV audiences. Surprisingly, Mini-Van seekers skew younger than those interested in Hatchbacks & SUVs Honda Seekers By Automotive Class Hatchback SUV Mini-Van Largest Age Group years old years old 5 34 years old Marriage (likelihood to be married) Less likely (-1%) More likely (+9%) More likely (+7%) Children (most likely gender Male child (+15%) Male child (+13%) Female child (+14%) and age of children in household) Under years (+9%) 3-5 years (+13%) Under years (+31%) Top 3 Auto Websites 1. US News Car Rankings. Edmunds 3. Carfax 1. US News Car Rankings. Edmunds 3. Cars.com 1. Cars.com. Kelly Blue Book 3. CarGurus Mini-van seekers are more likely to use a more unique set of auto websites for research, like Cars.com, Kelly Blue Book and CarGurus Hatchback and SUV audiences are more likely to have a male child at home, while Mini-Van audiences are 31% more likely to have a female child under the age of Segments built using Hitwise AudienceView based on people searching for Honda hatchback models, Honda SUV models, and Honda mini-van models. Audience profile pulled over 4 weeks ending 8/19/017.
7 Competitive Activation: Targeting Unique Audiences
8 Mazda 3 vs. Chevy Cruze Competitive Audience Analysis The reality is, your customers will not be deciding between two models of the same brand (for example, the Mazda CX-9 and the Mazda 3). Instead, they would weigh the Mazda 3 against a car of a similar class and price range, like the Chevy Cruze. Consumers seeking a Mazda 3 or a Chevy Cruze are behaviorally quite similar, but demographic and life stage data paints a picture of two distinctive audiences, which could be targeted with unique ad campaigns: Mazda 3 Seekers Chevy Cruze Seekers Demographics Largest Group Age Gender 5 34 years old Male years old Female Life Stage - Overlap Index Getting Married New Parents Home Buyers +130% +11% +15% +47% +96% +161% Mazda could launch an ad campaign targeted to Millennial men who are in a relationship, engaged to be married, or parents of young children frame the Mazda 3 as the perfect car for new beginnings. A reliable (yet classy) car for a new family. Chevrolet might launch a commercial targeted to Gen X women, or their husbands (a gift idea). It could depict a series of milestones: a child on their first day of school, a family home being purchased, and a Chevy Cruze presented as a gift in the driveway of their new home a car just for mom. Segments built using Hitwise AudienceView based on people searching for variations of mazda 3 and people searching for variations of chevy cruze. Audience profile pulled over 4 weeks ending 8/19/017.
9 Future Mercedes Buyers Reaching the Soon-to-Be Luxury Audience The car-buying cycle is long and the period between awareness and purchase can span many years. The marketing cycle for luxury cars stretches even longer: a successful luxury brand must plant seeds of aspiration very early in a consumer s life. Reaching the right consumers in this pre-luxury state (and sowing seeds of desire with the right audience) can be difficult to do in a strategic, cost-effective way. Let s explore how a brand like Mercedes might do just that. If we measure the crossover between the young College Millennial life stage segment and several competing luxury auto brand audiences, Mercedes emerges with the highest audience overlap: Audience Overlap Index College Millennials & Luxury Auto Audiences College Millennial Index Mercedes may have a smaller US presence than the others, but College Millennials are already engaging with Mercedes more relative to other luxury brands: they are researching Mercedes models, visiting Mercedes.com and even leasing their cars. If Mercedes wants to take advantage of this edge they have with this age group where should they begin? 1) Build a desired segment Based on real, targetable segments we can layer a unique audience for Mercedes to reach: Life Stage: College Millennials Automotive Make: Mercedes Automotive Class: Luxury The first two segments are a given. The Luxury segment was added to cast a wider net. Ideally the pre-luxury audience is interested in Mercedes cars, but expressing a more general interest in other luxury automobiles at an early age also provides an opportunity to poach future customers from the likes of BMW or Porsche by nurturing this relationship early. Segments based on Hitwise Auto segments (Mercedes, BMW, Lexus and Audi) and LifeStage segment (College Millennials). Learn more about how to activate these and other audience segments here. Audience cross-tabulation pulled ove r 4 weeks ending 8/19/017.
10 ) Understand the Audience Profiling this unique pre-luxury segment reveals that many of them are actually older Millennials (not 18- year-old college students at 4-year universities), and slightly more female: Mostly older Millennials (5-34 year olds) 51% Female 49% Male About 50/50 male and female 15% more likely to be Hispanic 0% more likely to be Asian 4% less likely to be Caucasian 14% more likely to choose a car on the basis of looks 13% more likely to drive faster than normal traffic 13% more likely to choose methods of transportation that are friendlier to the environment 39% more likely to be career ambitious 3) Craft the Campaign Now Mercedes has the ideal pre-luxury segment, and knows a lot about them next they might build a series of creative display campaigns based on what they know: Speak to both genders: This group is split nearly 50/50, so Mercedes might want to create separate campaigns tailored to both men and women. Diversity of audience: This segment is more likely than average to be Hispanic or Asian, so incorporating a diversity of representation in their creative is important. Focus on flashy: The pre-luxury audience cares deeply about appearances, ambition and (of course) having a fast car. Mercedes should ensure the visual creative depicts their cars with headturning levels of sleekness and horsepower. Eco-friendly: They are Millennials, after all. Mercedes might consider creating a display campaign to promote their upcoming electric concept car, the compact EQ brand, to this segment. That way they will sow seeds of interest amongst a Millennial audience who is likely to become the main target market for the Mercedes EQ in the future. Segment based on combination of Hitwise Auto segments, Luxury Auto segment and College Millennial LifeStage segment. Learn more about how to activate these audiences here. Audience profile pulled over 4 weeks ending 8/19/017.
11 3 The Electric Revolution: Tesla Spotlight
12 The Model 3 Release A PR Strategy To Follow While the rest of the auto industry struggles, electric and hybrid vehicles have taken off, with fully electric cars increasing sales by a whopping 134% year-on-year. Nearly every auto maker is playing catch-up and producing their own EV line, but currently Tesla dominates the market. They account for approximately 4 out of 10 electric vehicle sales in the US and recently eclipsed GM and Ford in market valuation, making Telsa the most valuable American car company in the world. What is the secret behind their momentum? It constitutes a unique blend of innovation, branding, and PR strategy, spearheaded by their prominent CEO, Elon Musk. Since it was publicly announced in 016, the Model 3 has been showered with publicity. This year, Tesla s roll-out of the first several car models was expertly crafted to build coverage, interest and anticipation over the entire month of July. As searches for Tesla soared, they appeared to pull search share away from other EV players like the Hyundai Ioniq. Electric Vehicle Searches % % % 0.005% 0.000% % July nd Elon Musk announces approval of Tesla production on Twitter July 7th First Tesla 3 Model Produced July 8th Handover party of first 30 cars % % % 6/1/17 6/7/17 6/11/17 6/15/17 6/19/17 6/3/17 6/7/17 7/1/17 7/5/17 7/9/17 7/13/17 7/17/17 7/1/17 7/5/17 7/9/17 8//17 8/6/17 8/10/17 8/14/17 8/18/17 tesla model 3 bmx i3 chevy volt hyundai ioniq nissan leaf smart car chevy bolt Searches for top electric vehicles pulled using Hitwise Intelligence from 6/3/017 8/18/017.
13 These peaks of interest in the Model 3 over the month of July were mirrored on several auto industry websites, like Car and Driver. Below we break down a play-by-play timeline of the Model 3 subpage rank on caranddriver.com over the course of July. Article Ranking First Model 3 Produced: Production announcement of first vehicle leads to boost in traffic to the Model 3 product subpage on Car and Driver. Week ending July 8th Page Rank Rank Article carandriver.com/flipbook/born-in-the-usa... carandriver.com/tesla/model-3 carandriver.com/photo-gallery/018-mustang... carandriver.com/reviews/017-honda-civic... carandriver.com/photo-gallery/sleeker Next two weeks: Relatively quiet on the PR front. Model 3 page slowly falls in rank and share. Week ending July 15th Page Rank 5 Week ending July nd 15 Handover Party: First 30 cars are given to their new owners during an illustrious Handover Party, and the subpage jumps back up to second place in Car and Driver. Week ending July 9th Page Rank Sub-domain traffic share for caranddriver.com pulled using Hitwise Article Tracker, over 4 individual weeks ending 7/9/17.
14 All this hype is great but does it translate to widespread purchase intent for the Model 3? Perhaps not. During the week when the first Model 3 vehicles were released, searches for tesla model 3 drove a lot of traffic to technology publications like the Verge and Wired, and less relative share to its own website compared to other electric vehicle brands. Meanwhile, other EV brands pull a higher share of search traffic to their own websites, as well as comparison sites like Edmunds, imotors or Car and Driver, suggesting more potent signs of purchase intent. Tesla has captured public attention, but the burden still remains to convert enough interested researchers to make up for the steep financial investment it s made in the Model 3. Downstream Traffic tesla 3 Search Downstream Traffic hyundai ioniq Search 1 Tesla Motors 0.80% 1 Hyundai Motor America 36.38% The Verge 8.57% dealers.car.com 10.39% 3 Electrek 7.1% 3 Edmunds 9.66% 4 Wired 4.76% 4 YouTube 6.56% 5 The Business Insider 4.54% 5 Car and Driver 5.5% Downstream Traffic nissan leaf Search Downstream Traffic chevy bolt Search 1 Nissan USA 41.36% 1 Chevrolet 37.44% YouTube 5.96% imotors 4.58% 3 Choose Nissan 3.86% 3 gmauthority.com 4.4% 4 Twitter 3.06% 4 Electrek 4.00% 5 Car and Driver.4% 5 Car and Driver 3.94% Downstream search clicks (website traffic) from search terms tesla model 3 hyundai ioniq nissan leaf and chevy bolt pulled over the week ending 7/9/17.
15 Top Take-Aways 1 Segment your own audience by buying phase, car class and behavior: Slice and dice your own audience in myriad ways in order to understand their attributes and path to purchase: researchers vs. intenders, sedan vs. SUV seekers what makes each of these customers tick? Where do they research online? How can you speak to them better, and reach them earlier? Profile the audience attributes of competing car models to find new targeting opportunities: Compare the audience composition of two competing car models in order to identify characteristics that are unique to your audience. Look for a group that is more engaged with your car model than your competitor s. Identify unique segments to target, rather than activating the same canned Auto segments that your competitors are likely using. 3 Leverage the power of anticipation and plant seeds of desire in future customers: Like Tesla, auto brands have the opportunity to stoke early desire amongst future customers before they are ready to buy; use an overlap analysis to identify segments that are unique to your brand, ideally those who are young and aspirational. This can be a particularly powerful strategy for electric vehicles, where it s crucial to fight for mindshare early.
16 Want to target unique auto audiences like the ones you saw in this report? Click here for a free demo: LET S TALK For more information visit us at:
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