Mobile Isn’t a Device, it’s a Mindset

Verve’s regional Vice President, Michael May, attended the J.D. Power and Associates Automotive Marketing Roundtable conference last week in Las Vegas, NV. As one of the keystone events for the automotive marketing community, Michael captured some great insights and made some keen observations that we thought you would find interesting.

If there was one central theme this year, it is the concept that mobile is not about the device itself; it’s about the shift in the consumer mindset that mobile devices have created in our culture. This of course has resulted in a shift in consumer behavior, and it is paramount for auto manufacturers to recognize this shift, and the role that mobile is now playing in the purchase funnel, as they engage in media planning for 2013.

Mobile was a major focus of the conversation at this year’s marketing roundtable; J.D. Power and Associates even released the results of a new mobile-focused study to drive this point home for auto marketers in attendance, as well as those monitoring from afar back in Motor City. Most compelling was the statistic that almost 60% of auto intenders are looking at their smartphone while they are on a dealer’s lot! Talk about an untapped opportunity for dealers to engage with consumers and tip the needle from consideration to purchase.

All this said, it was no surprise that while themes of years past were focused on in-market auto sites, search, or social media; this year’s roundtable was heavily concentrated on addressing the challenges and opportunities in mobile, reaching the ever expanding Hispanic audience, harnessing the power of “big data”, and leveraging video.

It was refreshing to hear CMO’s and key agency personnel discuss mobile and how as an industry we must all get better at learning how to integrate mobile in the overall marketing mix. Many of the panelists admitted however that as an industry, automotive tends to be late adopters as many companies are “just dipping their toes in mobile.” Other remarks from speakers at the roundtable concurred that mobile search is still playing a bigger role than display, and creating content is the larger challenge compared to engaging in mobile advertising efforts.

While most of us marketers acknowledge that mobile is a critical part of our communications, auto clients, and especially their agencies, are still reluctant to shift large budgets to mobile. There is a lot of work the industry needs to do in order to shift spending in the coming year. That first hurdle is getting over the fear of the unknown and committing to testing and learning by using dollars traditionally allocated to TV, radio, print or digital. Understanding the fragmentation of media has made this decision extremely tough for media planners. We all must trust that mobile can increase brand recall and reinforce calls-to-action administered through those other advertising mediums because mobile is so personal. The proof is in consumer behavior – for example, mobile usage increases 48% during TV commercial breaks. If we can encourage TV-heavy auto advertisers to test mobile during the prime time TV day part; we are confident the results will work in their favor.

The auto industry is growing too, which presents even more of a reason for auto marketers to embrace mobile. J.D. Power is increasing their 2012 projection of U.S. light vehicle sales to 14.4 million units up from 14 million earlier this year. We must be relentless in helping client partners whether, on the agency side or brand side, craft solid precision-based mobile strategies that tie back to achieving real business objectives. Don Butler, VP Cadillac Marketing, said it best – “Digital media is giving Cadillac the opportunity to tell its story in markets where its market share makes buying TV ads inefficient”.

Per J.D. Power, the auto industry will have 271 product choices in 2013 and 76 of those will be new and redesigned models competing for about 500,000 incremental sales. Auto brands can’t continue to blanket DMAs and consider that enough to sway the competition. Location-based mobile activation is absolutely the best direct strategy available because of the precision that geo-targeting allows.

Additional observations include two groups of buyers that are driving the auto industry – Millennials and lower credit customers. A full 43% of Millennials are using their smartphones during the auto shopping process. The under-20 audience is growing 30% and the 20-30 audience is growing at 17%. This younger buyer, as well as the lower credit buyer, are taking longer-term loans and 48+ month financing and represent 30% of all sales. Low credit score customers are buying compacts and profitable pickups more than any other vehicle category. In addition, the auto industry collapse in 2009 is impacting the price of used cars. Since sales were so low a few years ago, used auto prices are climbing due to short supply and the values are helping many people get better trade in value for their new purchase.

As Millennials become more financially stable, mobile auto marketing is certain to accelerate. Auto marketers must be ready. At Verve, our team is here to guide our partners and make sure mobile is successful for their brands. Some have already embraced mobile including Acura, Kia and Mini. These auto brands are already capitalizing on the future by redesigning their mobile experience. Tom Salkowsky, Head of Mini Marketing said, “that of any media, Mini does mobile best.” The Mini brand image is all about quality over quantity, and in the end, we agree that same principle can be applied to mobile. Quality mobile marketing is all about precision and being tact, knowing when and where to be when it matters most to the customer.

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