Why Abolishing Tier 2 As We Know it Might Actually Help Automotive Brands Sell More Cars
It's that time of the year again.
The time when automotive companies are gearing up for their year end
sales events. Their final burst of
'traffic driving' advertising, known as 'Tier 2'... the 'call to action' to 'buy now' because of 'special deals'.
Tier 2 advertising is a time honored
automotive convention that has become part of American culture, and considered
an essential piece of the three-tiered communications architecture that
includes brand advertising for Tier 1, and dealer advertising for Tier 3.
During the course of the year, most
automotive brands will spend between 20% and 50% of their total advertising
budgets in support of Tier 2 messages. That's roughly $4.5 BILLION per
year!
But is Tier 2 a vestige of the past? Is
it $4.5 billion wasted? Can it be that Tier 2 messages deliver questionable
traffic ROI, and worse, likely deliver zero 'ROB'...return on brand,
as these messages are rarely differentiated? There is data that suggests
that this is so.
First, let’s look at the messages and
intended audiences for automotive sales events.
Boiling down the hoopla, the messages invariably focus around being ‘a
good time to buy’ because of the ‘great deals’, and are targeted to an audience
who is ready to buy.
All evidence suggests that the
intended message and audience is completely out of synch with the way people
are actually buying cars. McKinsey, CNW, Polk, and Gfk have all documented a similar
6-9 month path to purchase. Buyers begin
with a short list of brands to which they add and subtract as they progress. And
they listen less and less to automotive companies and more and more to third
parties (experts, third party websites and social media peers) as they get
closer to purchase.
And if that is the case, they would
likely Google ‘best time to buy a car’ and multiple sources will all confirm
that it is always the last few days of the month or quarter, with even better
deals at the model or calendar year end.
Similarly, a ‘best car deals’ search
will yield very specific information about the available deals from virtually every manufacturer.
So, sales events might actually be a
case of spending $4.5 billion to tell an audience who has stopped listening to
you something that they already know!
So what is the answer? It appears to be time for a complete
revamping of the automotive communications architecture. One in which the objective is to get on, stay on and get added to as many lists as possible throughout the process. One which abolishes ‘tiers’, and instead, matches
intended audience behavior to desired result; One in which brands stop spending
money on generic, readily available information, and instead focus on behaviors
that deliver unique branded experiences and sharable content.
What might this look like?
- Re-channel tier 1 & tier 2 media dollars in two directions: high profile media and events that will consistently showcase brand virtues to a broad audience and state of art digital and analytics platforms
- Leverage 3rd party sites to intercept in-market shoppers
- Develop sharable brand accentuating content that will seed earned media (traditional and social) to reach in-market audiences with engaging news and product information.
So what’s stopping this from happening? Probably
inertia and a desire not to rock the boat.
Manufacturers will tell you that dealers love sales events. Dealers will tell you that they get traffic
when the sales events run. Of course
these events run at precisely the same times that 3rd parties are saying
are the best times to buy, and no one has ever served up an alternative.
My experience calling on car dealers
tells me that they are reasonable business people who will take a leap of faith
on a well thought out plan, particularly if it has the potential to raise the
brand profile, and increase the value of their franchise. So the onus is on manufacturers to package
all available purchase process insights to make the argument, and ask the
dealers to take this leap of faith by reassuring them that they will actually be
seeing more shoppers and a gaining a higher share of voice through budget reallocations and stronger earned media. And the manufacturer with the guts to do this will be setting the new rules for
category, while reaping the rewards a renewed brand desire and dealership
traffic.
