By Charles Miller
The US is a diverse place, and as a result, we see diversity within Dealer.com data. While we’ve generalized our findings in this post, every dealership’s story about the impact of COVID-19 will be slightly different. You can apply our findings through the lens of your business and your market to help define your digital marketing strategies moving forward.
Impacts of COVID-19
Vehicle sales are down in the COVID-19 timeframe. At the time of writing, Cox Automotive is estimating more than a 60% decline in US vehicle sales compared to the beginning of March. We’ve been working to understand how consumer shopping behaviors are shifting, what this means to the automotive industry and most importantly, what dealers can do about it during this disruption. The data shows there are both short- and long-term opportunities.
Weathering the Storm
As we analyze the impact of COVID-19 on consumer shopping behavior, it has become clear that how we measured success yesterday is not how we should measure success today. Currently, we’re seeing about a 20% decline in website lead volumes, however this isn’t nearly as steep as the forecasted decline in sales. The takeaway here is that consumers are still interested in purchasing vehicles, and they are simply deferring the purchase until later. The April 4th Cox Automotive COVID-19 Consumer Impact Study shows that 61% of consumers are Much Less Likely or Somewhat Less Likely to visit a dealership and 34% of consumers are now delaying the purchase of a vehicle.
The all-important Cost-Per-Lead key performance indicator (KPI) has less business value today than it did yesterday. We need to shift our evaluation of performance upstream and focus more on brand awareness measures like Impressions and Reach, showing in the form of Website Visits and Vehicle Deals Pageviews (VDP). Dealers also should focus efforts on nurturing customer relationships online until consumer confidence returns.
Consumers Are Getting More Social Online
Consumers are going online more during this time, whether it’s to connect with friends and family, to binge watch TV shows, or even to shop for vehicles. OpenVault, which provides industry analytics for broadband operators, is reporting a 33% increase in broadband usage from January to April 3rd. For automotive, we need to understand what this means in the way of consumer focus. Google and Bing, the kings of low funnel, high purchase-intent activity, are reporting 12-15% declines in Automotive related search terms as of late March. Dealer.com data indicates an 18% decline in Visits from forecasted values. Meanwhile, social channels are reporting record highs. Facebook, as one example, has seen more than a 50% increase messaging (group calls are up 70%) and is reporting new record highs for general usage almost daily.
With this influx of traffic and subsequent ad inventory on Facebook, Dealer.com is seeing a 46% decline in CPMs (Cost per Thousand Impressions). Facebook Cost-per-VDP is down 8%. When you’re evaluating how to best target consumers with your brand awareness and COVID-19 relating messaging, take a strong look at social. Now is likely an ideal time to invest advertising dollars into channels like Facebook and YouTube.
Another note on social channels: we need to start playing the long game. No matter what we say in an advertisement, some consumers will delay traveling to your dealership to purchase a vehicle, even if they were on the verge of purchase prior to the pandemic. However, social communication offers dealership staff the chance to engage with consumers and foster a relationship online. These connections are more apt to secure that individual as a customer once the pandemic passes.
- Be as active and relevant as you can, providing videos of inventory and informing them on the actions your taking to ensure their safety.
- Engage with consumers directly. Train your sales staff to operate more effectively in this area or contract social management experts.
To date, Dealer.com Social and Reputation Management services have created almost 6,000 COVID-19-related website pages and 1,000 advertising assets to help dealers inform consumers of the services being offered during this time.
Consumers want to learn about the actions you are taking to safeguard their health as well as what services you’re offering. We’ve seen up to 12% engagement rates with these COVID-19 Advertising assets. COVID-19 website pages have been viewed 156,000 times, and this metric is growing by the day.
Your Digital Retailing Opportunity
How many times have your customers asked when the automotive industry will allow purchasing online? With stay-at-home orders in place, now would be an ideal time to offer a solution like digital retailing to the market. Given the fact that many consumers can’t engage directly with sales staff at your dealership, they are starting to explore Digital Retailing tools. Dealer.com has seen Digital Retail engagement rates grow by 25% since the beginning of March. Despite a general decline in overall website leads, by the end of March we were seeing Digital Retailing Deal and Credit Applications up 13% compared to the end of February and setting all-time highs for the Dealer.com platform.
As you plan your advertising strategy and how to communicate COVID-19 services your dealership is offering, now is the time to inform shoppers of the ability to Finance, Trade-In and Fully purchase a vehicle online. Educate shoppers on how to use these tools while social distancing brings them into focus. Dealers who are effective at educating both their staff and their consumers will see this time as one that accelerates them toward a future where the purchasing, trade and finance processes are handled more efficiently online.
While the nation’s experts are working to understand how long COVID-19 will stay in the headlines, we will continue to evaluate its affects and provide recommendations as more data becomes available.
Reference: Open Vault