Happy New Year! Time for the 2020 automotive marketing predictions.

For the first time in several years, dealers face decreasing new car sales numbers and higher average prices. Fortunately, the cloud of confusion surrounding digital marketing seems to be dissipating. 

The industry broke away from the stigma of being slow to adopt new ideas and technology. Remember when the sentiment was that the OEMs and car dealers were behind the times? That has changed. Dealerships are just as sophisticated as any other retail experience today, if not smarter.

The missing link has been a better understanding of both the customer and the effort we put into creating the results we desire. Fancy tools that make an old website into an eCommerce site don’t suddenly change the industry overnight. We’ve all been chasing new products, tools and platforms in search of the magic bullet. Now dealers realize that the magic bullet doesn’t exist in the form of a single application, but rather a seamless process.

Before we begin, let’s quickly review sales results from 2019 to build a foundation for a few of this year’s automotive marketing predictions: 

• Kelley Blue Book reported that the estimated average transaction price for a light vehicle was $38,948 in December 2019. New vehicle prices rose $656 (up 1.7%) from December 2018.
• Year-end estimates are coming in at 17.3 million units delivered for 2019. Cox analysts said fleet sales contributed to the market breaking 17 million units in 2019.
• Edmunds projected 40,415,175 used sales in 2019. Those results are up from the 40.2 million used cars sold in 2018. There were 2.8 million CPO vehicles sold in 2019. This marked the ninth straight year of record certified sales, according to Cox Automotive. 

I’m predicting 2020 will be the 10th year of record CPO sales due to more affordable off-lease vehicles, the increase in new vehicle prices and the need for dealers to show more value in their available inventory. 

1. AUTOMOTIVE MARKETING AUTOMATION MAKES ITS MARK

Dealers will continue to see the benefits of automotive marketing automation and how it changes the way they manage their advertising efforts. Why is automotive marketing automation so important? 

Dealers know they need to move quickly and connect with car shoppers using multiple channels. But, they still struggle with the best way to execute this effort. The question remains, “How do I get my current offers in front of more interested shoppers?” Hand-powered campaigns lack the accuracy, consistency and speed needed to create a competitive advantage.

Marketing automation helps dealers reach more buyers using multiple channels. Why waste valuable time and resources on repetitive tasks when they can be automated?

Enterprise-level digital automotive marketing platforms now can consume massive amounts of data, normalize it and distribute it in real-time. Dealers can now change their campaign distribution strategy instantly. We’re well beyond the days of over-spending ad budgets on just one or two marketing channels.

Dealers will see their marketing portfolio, as a well balanced and diversified investment portfolio, consisting of multiple distribution channels. The result will be campaigns designed to streamline lead generation, customer lifecycle marketing, customer retention/remarketing, and, most importantly, performance/ROI measurement. 

Contributing to the power of automotive marketing automation will be the intelligence available to these platforms. We started hearing about artificial intelligence, data-driven marketing and voice search engine optimization a few years ago. Each item is more connected than ever as the data grows and the platforms learn.

Dealerships learned to rely on intelligent data to help make smart inventory and pricing decisions rather than rely on subjective gut-feelings. Automotive marketing strategies should include a similar process that relies on intelligent data to reallocate ad budgets, manage ad channels, target different competitors, locations and more. 

How will this change the way dealers approach their marketing efforts in 2020? 

• Smarter inventory pricing processes
• A better understanding of the marketing channels that drive results
• Higher accountability standard for the customer follow-up process
• Faster decision-making processes – instead of just observing what’s already happened, the data within these tools will help dealers understand why it’s happening and how to respond proactively

Joe Webb, President of DealerKnows, said, “In 2020, I foresee dealers focusing on two all-important goals. Knowing this will be a used car-dependent market, dealers must be aggressive and progressive with how they acquire units. Utilizing auction technology, used car acquisition software, and trade-in buying tools will be imperative to stocking units that are profitable. Their next focus must be on tightening up their lead processes both online and in-store and holding teams accountable in a scalable way. The entire follow-up ecosystem will be more text and video reliant than email and phone heavy, and improving communication with customers through monitoring services will start showing measurable CX value.”   

Another excellent example of how intelligent automation helps dealers speed up their efforts while saving them money is Tru Images. Mark Agor, President of Tru Images, said, “Our software makes your photographer more efficient by finding duplicates in your new vehicle inventory. When you shoot one vehicle, Tru Images uploads the images to other exact matching vehicles in your inventory automatically.”

Think of automotive marketing automation as the ultimate solution for efficiency and effectiveness. 

2. VOICE SEARCH WILL INFLUENCE DEALERSHIP CONTENT MARKETING

Why will voice search continue to be so important?

• 50% of all searches will be via voice by 2020
• 55% of all US homes will own a smart speaker by 2022
• 72% of smart speaker owners use theirs in daily routines
• Voice shopping is expected to jump to $40 billion in 2022, up from $2 billion
• Global smart speaker shipments, between Q1 2018 and Q2 2019, almost tripled, up 9.36 million units to 26.1 million units
• Google Assistant has 2,000 “actions,” Alexa has 30,000 “skills,” 

How will these factors influence marketing efforts? Automotive marketing solutions should include a greater emphasis on the following activities.

• Optimized GMB profiles
• Consistent name, address and phone records in your local citations
• Content structured around your primary location 

As the actions and skills libraries continue to expand, so will their ability to help understand your behaviors and interests (just like YouTube’s ability to serve up similar videos that you’ve previously watched, commented on, subscribed to and liked). 

Brands that understand this concept will seize the opportunity to create more valuable content that is better optimized for voice search and that drives better relationships and brand loyalty. 

3. STAND-ALONE SEO FINALLY FINDS ITS NICHE

I’ve said it for years, “As long as search engines still exist, there will be a need to optimize the search experience“. Just “doing SEO” merely to rank for a list of keywords that either doesn’t register any search volume or relate to the primary page topic is a waste of money and time.

The way in which automotive SEO is executed has matured. How dealers approach it needs to as well. Automotive SEO:

• Is rarely integrated with the rest of the marketing efforts
• Lacks dynamic content published to multiple marketing channels 
• Requires a technical SEO approach that prepares it to be indexed and ranked properly

Every dealer has multiple pages in their website navigation that don’t need to be there. You could delete those pages from existence, and it wouldn’t impact your sales efforts. (Plus, it’ll also help the remaining, higher-priority pages.)

I challenge you to find those pages and get rid of them if you can’t answer ‘yes’ to each of these questions:

• Does it get a consistent stream of traffic from multiple marketing channels? (Organic, paid, email and social media)
• Do you use the page in your outbound marketing efforts? (Email, social media and links within blogs) 
• Has anyone updated the page content in the past six months? 
• Do you have a content strategy that helps the page match specific intent? 
• Do you measure a specific goal or event that contributes to new sales opportunities – not just behavioral metrics?
• Does the structure prepare the page for Knowledge Panels, Featured Snippets and People Also Ask sections? 

4. AUTOMOTIVE CONFERENCES GET SHAKEN UP

The time has come for automotive conferences to get shaken up and change. This segment of the industry has gone through more phases than an emotional teenager. 

Let’s face it, it’s hard for conference organizers to find quality keynote speakers year after year that will draw a crowd and deliver quality messages. 

A tighter sales market will also impact the attendance numbers. Dealers will continue to stay home; vendors will reconsider their participation as well. I’m seeing fewer dealers at the conferences. We’re also limiting the number of events that Dealer Teamwork participates in as the audiences continue to thin.

The opportunity for more specific events exists. Influential leaders like Shawn Hays, GM of CMA’s Colonial Chevrolet, see the light. He’s identified an audience and works towards delivering a focused message that doesn’t try to solve every problem – just a particular set of issues for the audience. 

Shawn thinks about this problem differently. “Today’s dealership manager is ill-equipped to lead other professionals. Half of our industry doesn’t know how to be a successful, balanced person. The conference game is competitive and tired. The speakers are all saying the same exact thing every single time. The reality is, the people going to these events see it as just getting out of work for a few days.” 

Shawn wanted to create a different approach with a new automotive conference for the industry. “The industry is failing to support the next generation of leaders. Many people have a hard time with their marriage, raising their kids and simply understanding the people they’re managing,” said Shawn. He also added, “Industry conferences have focused on teaching people how to sell cars. It’s not about how to sell cars; it’s about teaching them to live a balanced life to be successful. We’re devoting our efforts towards personal growth and development. We want to help change lives!”

5. GMB RAISES THE STAKES! 

If you haven’t been paying attention to the power hidden within your Google My Business (GMB) profile, take notice. Your GMB profile is about to become even more powerful, and you need to understand what it can do for your dealership.

A couple of years ago, I predicted that organic results would eventually display less than 10 results. That has started to happen. The fewest results I have seen for a branded search are six organic links. 

The next wave of these changes will involve Google My Business profile listings. I predict this important online element will introduce more new features. These features will increase shoppers’ ability to access relevant information, answer more questions and connect with specific sections of the website. Expect to see new automotive marketing solutions that focus on optimizing GMB via marketing automation. This will improve marketing processes, impact local SEO results and ultimately the shopping experience.

The GMB profile may also take on a different form altogether. Desktop users may see a horizontal shape that includes the ability to add more robust information within the profile. Want more bells and whistles? Select from a list of upgrade items to improve your local listings and add them to your GMB profile via a paid feature menu. Your GMB profile will turn into the ultimate local landing page.

These changes will also impact zero-click search results. Over 50% of current searches already result in the user not clicking on anything. Why? Google does an excellent job of scraping massive amounts of content and serving it up on page one. 

Imagine seeing those same features within a GMB profile. That may become a reality as Google gives businesses more opportunities to publish relevant content. GMB Posts was an early indicator of additional features. Products & Services just moved out of the beta stage and is available to all businesses. Could new versions of Featured snippets, Knowledge panels and People also ask sections deliver more rich content within a GMB profile? 

Brian Pasch, CEO & Founder of PCG Companies, is also extremely bullish on the importance of GMB profiles. “The best first dollar of marketing should be towards claiming, merchandising, and optimizing your GMB,” said Brian.  

6. CARVANA CONTINUES TO GRAB MARKET SHARE

Regardless of your personal opinion of the company, Carvana’s growth has been incredible. Their market-grabbing strategy and ability to execute are respectable on all levels. The company is positioned well and its growth will continue in 2020 at a healthy pace. 

Dealers should pay more attention to their tactics and the results they’re creating. For the sake of this conversation, I’m not concerned with the company’s financials or their stock price. This is about the decisions made to improve the car buying process, acquire inventory more efficiently and sell vehicles faster for a higher profit. 

Carvana will continue to move into more markets. They now have dealerships located in 148 US markets. As this number grows, dealers will be forced to compete against another competitor offering next-day delivery service as a competitive advantage. How will dealers fight against Carvana’s brilliant attempt to build market share?

Their aggressive efforts are getting car shoppers’ attention. They’re buying consumer vehicles at an astonishing pace. In the first quarter of 2019 alone, they purchased 232% more cars than the prior year during the same period. 40% of their vehicles sold were acquired by customers vs. through auction of other purchase channels. Their ability to purchase more customer vehicles, recondition them faster and cheaper, and ultimately retail those vehicles quicker for higher grosses is making it harder for dealers to compete.  

Operational excellence is also impressive. Their gross profit per unit increased to an amount any used car manager would be envious of: $3,175 per unit, up from $2,173 per year over year.

How does Carvana do it? They’re paying attention to basic operational principles. It’s a formula everyone knows they need to follow. Easier said than done.

• Days to sale decreased from 66 to 61
• Increase loan monetization
• Deeper penetration of vehicle service contracts & gap-waiver protection

How are you prepared to improve your dealership’s inventory health and increase accountability for your used car operations? 

Jasen Rice, Founder of LotPop, predicts that dealers will be forced to look closer at several common issues preventing dealers from moving more units. “Many dealers face an uphill battle in 2020 trying to market their inventory without changing the way they approach their merchandising,” said Jasen. “Dealers aren’t paying attention to their price buckets, their acquisition costs, and recon time. Some of them aren’t aware of how their aging percentage is impacting their results. Our LotPop inventory health audit helps dealers see the problems they face. Making these changes is the first step in letting their marketing efforts do what it should be doing – drive more sales opportunities. It’s hard to market aged vehicles that are priced wrong and have weak merchandising efforts!” 

7. VENDOR CONSOLIDATION WILL ACCELERATE

In 2020, automotive marketing agencies will experience massive changes. Contributing to this will be growing numbers of dealers who are looking for effective marketing automation solutions. Unfortunately, many vendors don’t have modern solutions available. Dealers are looking for efficient methods of managing their marketing processes.

Agencies without the ability to support dealers will have a difficult time competing. Proprietary technology is a necessity for these companies to promote their business models. Expect to see more vendor consolidation as they explore new revenue alternatives this year.

Sean Stapleton, CEO and Co-founder of Dealer Teamwork, also predicts the agency world will be turned upside-down with Google Chrome’s decision to eliminate support for third-party cookies. “This will impact everyone involved with programmatic marketing and the entire digital media industry. New first-party data strategies will become critical and identifying audiences will be more difficult. Google may eventually introduce their own first-party data solutions as well. Automotive agencies and even the OEMs will be forced to find new solutions.” 

Laurie Foster, Founding Partner of Foster Strategies Group, also shared her 2020 automotive prognostications. 

“I see the gaps in the Leadership becoming a chasm, widening by the day. For some, this year will be an extreme version of ‘The Year of Living Dangerously’ while for others, I see ‘The Year of Focus, Recalibration, and Leadership’ at work.

We have had years of good increases. But the margins are not the same. While some still celebrate antiquated KPIs skimming things like ‘Unit Count,’ others will look more carefully than ever at expense controls, team performance, and leadership models.

Plenty will go into the new year drunk on their past successes without looking at stabilizing and building for a future full of inevitable change.

Some will continue to talk about their ‘years in the business,’ and some will work to ensure they are bringing relevant, meaningful, and demonstrable value to a rapidly changing marketplace.

Some will be noisy, thumping on their chests as they merely ride the last waves of an economic upturn. Others will realize they need to redouble their efforts to strengthen their teams, their community presence, their business objectives. They will look back to the devastation brought on 10 years ago and vow never to be an innocent bystander when the waves return.

Some, like the proverbial frog in the boiling water, will become more vulnerable to shifts in the market as they continue their commitment to doing things ‘the way they have always done them.’ And they fail to realize that the soothing warm waters are now at a rolling boil.

Others have seen the aftermath of the Titanic. They are learning it is time to step aside from ego and ‘what was’ and steer their ship towards ‘what can be’ inside a world of more competition, reduced customer loyalty, and margin compression. They will calibrate their teams to win on the field that now exists, not the one that is now sinking to the ocean floor.

Egos will no longer be rewarded, valued, recognized. Pride in the work of those who are insightful students who demand more than ever of themselves and their leaders will become an appreciated category of leadership in automotive.

All of this applies to retailers and vendors alike. A short burst of success has tricked many into thinking they control their future position in the market. Others will become more diligent, collaborative, and demanding of exemplary output as they seek to attain and retain sustainable greatness.

The difference between those who hold titles and those who are viewed as Leaders will become more apparent. In an era of unprecedented levels of employment, massive gravitation towards progressive, thoughtful Leaders will make it harder, if not impossible, for dealers and vendors who fail to deliver on offering employee-focused companies.

The gap is already there. You may or may not see it. By the end of 2020, the chasm between the old and new will be painfully visible to all.”  

8. TIKTOK OPENS UP MORE VIDEO OPPORTUNITIES

TikTok is the new subculture that nobody truly understands, yet plenty of people are on the platform.

What is it?

Think of it as a newer, more sophisticated version of Vine. Online video sharing has matured to include music, filters and other interactive features that drive engagement.

How does TikTok work?

Creators can add background tracks and effects. Viewers can like videos and comments, can add sound effects, can add videos to their favorites list, and can download videos as well.

What are the opportunities for automotive marketing on TikTok? 

Besides being creative, using quick edits and native platform features, you need to get views to hit the “For Your Page.” How? More video plays, followers, hashtag usage, favorites, sequential videos (part I, II, III), and other engagement factors that trigger the algorithm and unlock your exposure.

There are over 1.5 billion active users worldwide already. These numbers put TikTok ahead of LinkedIn, Twitter, Pinterest, and Snapchat as one of the most active social media networks in the world. Plus, it was Apple’s most downloaded app for 2019. Only 4% of US marketers use the platform currently. I see this increasing three-fold in 2020.

User growth, compared to the most popular social media platforms, is incredible. Instagram needed six years to reach 500 million users; Facebook needed four years. It took TikTok three years.

I expect to see large brands using their newly released ad platforms. We can also expect to see a new wave of bright automotive marketing personalities flexing their creative chops on this platform as well. 

Not familiar yet? TikTok appears to be one of the freshest ways for marketers to reach younger audiences. 

• 61% of TikTok users are between 16 and 24
• 56% of users are male; 44% are female
• Average daily usages: 52 minutes
• 90% of users visit the app multiple times per day
• 1 billion videos viewed daily

Users will grow, and that will open up more opportunities to advertisers. 

One automotive-related profile that caught my eye is @mechaniclink. This creator is a mechanic who shares his daily workload from either a repair shop or a dealership. He’s quick, witty, has a ton of fast cuts, and knows what he’s doing. Unfortunately, whoever runs the marketing at his company probably has no idea the number of service-related videos he created. (Or the number of followers, videos plays, and comments he gets with each video.) 

The short-form, digestible content game just leveled up. Have you checked out TikTok yet? 

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Thank you for reading this year’s edition of automotive marketing predictions, and here’s to another happy, healthy, and prosperous year for everyone in this glorious industry of ours. 

Resources & references:

https://mediaroom.kbb.com/2020-01-03-Average-New-Vehicle-Prices-Up-Nearly-2-Year-Over-Year-in-December-2019-According-to-Kelley-Blue-Book

https://www.bloomberg.com/news/articles/2019-11-01/honda-and-hyundai-stage-big-comeback-month-auto-sales-update

https://www.autoremarketing.com/trends/current-estimate-2019-used-car-sales-40-point-4-million

https://www.autoremarketing.com/trends/used-vehicle-sales-dealers-expected-continue-growth

https://www.thinkwithgoogle.com/marketing-resources/experience-design/tierless-automotive-marketing-approach/

https://www.autoremarketing.com/trends/cpo-car-sales-reach-9th-straight-record-year