Using Data to Assess the Ad Effectiveness in the Auto Industry

Automobile

Image from: Automobile / Shutterstock

SpockAutomakers want their advertising to be effective but often find themselves torn between trying to build awareness and consideration long-term vs. driving sales right now, today. For the former, they often use Tier I advertising to highlight the features, specifications, and value of a specific model, with the biggest push typically at launch. In contrast, Tier II sales event advertising focuses on the event’s theme, typically presented at the brand level and often feature multiple models. As in “the needs of the many outweigh the needs of the few, or the one” as stated by Spock in one of the Star Trek movies.

Ad Effectiveness – Looking at Norms

HeadlightAmong multiple services, Millward Brown Digital measures digital ad effectiveness. The richness of our experience has allowed us to create ad effectiveness industry standards, part of our MarketNorms® solution, for several industries including automotive. The automotive norms are based on over 400,000 survey responses globally covering nearly 300 different campaigns.

The chart below shows norms for auto advertisements featuring single vehicles compared to those focusing on the brand overall (i.e., typical of sales events). The chart shows the percentage point difference between control and exposed groups for each ad type on several different metrics. The greater the difference, the more successful the ads.

Automotive Global Ad Effectiveness

On most metrics single model ads outperform brand ads. The one exception is “Message Association,” which may be driven by recurring use of brand-level slogans (such as “The Relentless Pursuit of Perfection” or “The Ultimate Driving Machine”) in both brand-level and model-level advertising. And while brand messaging had the edge, results for brand and single-model were very similar.

Behavioral Insights

Crowd of PeopleMillward Brown Digital also gathers and interprets consumer online behavioral data, and from that have a proprietary measure of in-market new vehicle demand. Demand is based on our proprietary in-market automotive shopper data, which are based on unique consumers (i.e., no double-counting), and leverages our patented normalization technology. Shopping behavior is based on lower funnel online activity across 40+ third-party automotive sites.

The chart below shows CY 2012 in-market demand (shopper volumes) market-wide, sales, and conversion (the industry’s calculated success at turning shoppers into buyers). Our demand and conversion results complement the ad effectiveness results:

  • Tier I advertising tends to drive demand (i.e., bring new shoppers to the model being advertised)
  • Tier II ads tend to drive conversion (i.e., not bring new shoppers but stimulate those already in-market to buy). Of course, Tier II ads are typically announcing deals/sales events and those by design help spur conversion as well.
  • Tier II brand advertising spend is often elevated in December—supporting year-end sales pushes—and so are deals. Together those shift the industry’s focus from adding incremental shoppers (demand is already subdued around the holidays) to closing the customers that are already shopping or shopped earlier but did not buy shopping (conversion peaks). That’s one reason sales spike at year-end.

    In-Market Demand, Sales, and Conversion (USA)

    Broad Brush vs. Fine Art

    BrushThe conundrum: long-term, automakers want to build their brands and establish awareness and consideration, but in the short-term drive sales. We’ve seen the tools to do that are often at odds: single-model ads are more effective at driving awareness and favorability; brand ads are less effective on strong on message association and help drive sales in the short-term. So auto executive Spock finds the short-term needs of the many may…or may not…outweigh the long-term needs of the one.

    This analysis looks at norms and industry-level demand data: the logical next step is analyses by specific brands and models, which help reveal the right mix of short-term and long-term tactics for each that optimize spend and sales effectiveness. Requisite next steps to complete that include:

    • Assess ad effectiveness for specifics brand and models, and benchmark against industry norms
    • Gauge the extent to which ads consumers see, but do not click on ads, that eventually drive the desired behaviors (such as site visitation and purchase intent)
    • Understand the consumer path to purchase including where in the process ads and other influences are most effective, and what types of influences (such as TV ads vs. online vs. search vs. sponsorships) satisfy each objective
    • Frame ad effectiveness results within the context of demand and conversion results to connect the how’s and why’s with the what’s and how many’s
    • Leverage Millward Brown Digital industry expertise to interpret results, frame calls to action, and develop specific milestones for success
    About Lincoln Merrihew:
    Lincoln Merrihew is the Vice President of Transportation at Millward Brown Digital. At Millward Brown Digital, Lincoln is responsible for steering the Transportation Team, which encompasses the automotive and travel practices. Before Lincoln joined the Millward Brown Digital team, he worked at TNS Custom leading the Automotive team, and then continued on there to lead business development for 10 different industry verticals. Lincoln's career aspiration is to create game-changing solutions and insights. Connect with Lincoln on LinkedIn.