Recent OLIVER research threw up some thought-provoking results for marketers in the automotive space.
1,000 customers were asked which sector’s brands they felt most detached from. 31% named the automotive industry.
This was the fourth-poorest score in the survey, and placed the automotive sector alongside some pretty dubious company, with the notoriously acquisition-focused utilities industry faring only slightly worse at 32%.
Conversely, retail brands received negative feedback from only 8% of respondents – not the cleanest comparison, perhaps, but we’ve done our homework, and have found that the automotive sector is indeed lagging behind.
So in this new series on the OLIVER blog, we’ll be evaluating how well car brands are adapting to the modern marketplace, and proposing solutions and strategies for the future of automotive marketing. To get us started, a market overview: what are the big questions that automotive brands need to answer in their marketing strategies?
What’s Happening to Car Ownership?
In 2015, the car industry saw the highest ever gross sales of vehicles; but this doesn’t tell the full story.
Although total annual new vehicle registrations are on the rise, a comparatively smaller chunk of the population is taking to the road.
We can also see that car owners are ageing, with an increasing proportion of pensioners having their own private vehicles, versus a broadly flat percentage of working age Britons.
So while car owners are increasing in total, this trend is being driven by pensioners. Millennials meanwhile, are a declining car buying group.
This tallies with US data showing that young people are becoming increasingly disillusioned with cars: fewer licences issued to ages 18-34, and fewer cars purchased by teens and young adults.
Finally, car ownership is being steadily eclipsed by car possession: PCP (‘personal contract purchase’) now dominates the market, accounting for 59% of all new cars retailed in the UK in the year leading up to July 2015.
So what does this mean for marketers?
Is the car still cool?
It’s often presumed that the cost of insurance is putting young people off driving; but this can’t account for a sharp 80% fall amongst under-30s by 80% in the decade 2000-2010.
In truth, plenty of under-30s have ample spending power, and PCP deals have made it easier than ever to take ownership of a new vehicle.
So what’s really behind this decline?
The thing is, the car used to sell itself: to young people as a symbol of freedom and a sign of coming-of-age, to men as a symbol of strength and power, and to the moneyed classes as an outward symbol of wealth.
But what can be said of these values in the age of the anti-gentrification protest and ‘dads don’t babysit’?
And if teenagers can be famous on Instagram, does physical freedom still matter?
Brands need to adapt to changing societal values; and broadly speaking, automotive brands are not. You can see this in their broadcast advertising – rich on scenery, paintwork and pistons, but little on how easy it is to lift a child’s car seat out of the back, or why you should shell out £3,000 on a PCP deposit when you could go travelling instead.
As for the millennials…
Are Car Brands Getting Digital Right?
The traditional marketing ‘funnel’ has exploded into a multichannel maze of points to purchase – and the car industry is a case in point.
Google traced a single consumer as she researched and bought a new family car. They recorded 900 digital touchpoints before she completed a transaction.
Significantly, manufactures and brands only owned 21% of these interactions. Content has been king for years now, and yet car brands are failing to own the digital journeys taken by their prospective customers.
Social media tells an equally concerning story. We reviewed the 20 most-recent Tweets the UK’s 10 biggest car brands…
Half of all content was focused on showcasing a brand, whilst only a third honed in on practical product benefits.
Translation: car brands clearly think the car is still cool. Flooding their social networks with brand-led content, they’re cultivating an online presence which serves devoted fans rather than winning over new ones.
And regarding the 16% of the pie chart dedicated to racing: Formula 1 gets 4-5m viewers per race, and the UK has 30m drivers. So at a first glance, it looks like car brands are performing well here – until you realise that 64% of racing fans are men, whereas women lead 85% of car purchasing decisions.
So how can car brands start marketing more effectively?
We’ll cover that in more detail later in this series, but for now, our top three takeaways for automotive marketers are:
1) car owners are getting older – possibly because no-one is marketing to young people
2) cars might not be cool anymore. Don’t expect them to sell themselves
3) content is king.
The last one shouldn’t really be a top takeaway in 2016, but with sectors such as the retail industry having proven just how important this is, it’s clear that car brands need to make up some ground.
This is the first in the new OLIVER series on automotive marketing. Click here to read the next instalment: “Is the Car Still Cool?”
[3, 5] http://www.theguardian.com/