David Tully

THE vehicle-buying landscape has changed so much that dealers need to consider spending as much on their internet presence as they do on their showrooms, according to an analysis of digital marketing by Google.

The startling proposition that dealers should spend millions of dollars on on their internet presence and social media activities simply reflects the way buyers are now researching cars and finding dealers, Google executive David Tully said.

Speaking at the annual convention of the Australian Automotive Dealer Association (AADA), Mr Tully said research showed that buyers can use the internet hundreds of times during a three-month vehicle-buying campaign before stepping into a dealership.

“Deloitte says 77 per cent of people who walk into your dealership have been to your website first. That’s often the first way we meet customers today,” he said.

“And so I have a question for you: are we investing as much in our websites as we are in our physical dealerships?”

Mr Tully said the old days when people used to go to the dealer’s showroom at the start of their buying campaigns were gone. They used to visit five or six times. Now they visit once.
“I know many of you are making improvements to your dealerships, investing large sums of money to create state-of-the-art facilities. I’m not saying that’s a bad idea. That’s a great idea. It’s a great experience for the customer,” he said.

“But the challenge is that, if our virtual dealership isn’t up to par, and our websites are not answering our customers’ questions, then they are never going to see your bricks and mortar stores.”

Mr Tully said the number one source of information for intending car buyers was now internet search, which is used by 92 per cent of buyers.

Next is online video, which “has come out of nowhere” to be second, while the dealer’s website is the third most-referred to source of information.

“That means your website is the main way you engage with customers today.”

He said it was crucial websites carried the sort of information buyers wanted, and he said this was another area where buyer behavior had changed rapidly in recent years.

He said talking about cars in the old-fashioned way – horsepower and styling – does not impress so many buyers these days. Now they care more about the practicalities, particularly those under 35.

Mr Tully said one customer told researchers, “I don’t care about specifications. They mean nothing to me. What I care about is how many shopping bags will it fit in the boot? That is what they are going to use it for”.

Mr Tully said dealers needed to upgrade their online presence not so much because other dealers are doing it but because consumers are becoming used to easy-to-use, informative websites in other industries.

“Customers are not just comparing us with other auto companies, they are comparing us with every other business they interact with, whether that’s a supermarket or an airline or whoever it might be,” he said.

He said the airline websites were a good example, where consumers can book a flight by navigating through all the variables like destination, time, stopovers, seat class all with just a few clicks.

The whole idea about investing in online channels is to make it as easy as possible for customers to find out what they want to know.

“Customers are choosing to visit online first. That means you can win them online first,” he said.

“When was the last time we opened our websites and walked through them as a customer would. When was the last time we opened our mobile website on a normal 3G connection like our customers would and see if it is even loading fast enough for them not to give up and go somewhere else?”

Mr Tully said digital research had also shown that dealers’ advertising efforts were not keeping up with the move by customers to use the internet more and more during their search.

Customers have moved their search efforts online, but dealers’ advertising has not yet followed.

“The question to ask about marketing strategies is where do we play and where aren’t we playing. And those must align with our customers’ behavior today.”

Mr Tully said there was an imbalance between where customers were looking for information and where dealers were advertising.

He said dealers were still spending a considerable amount of their marketing budget on print and TV advertising while customers were spending more and more of their time on the internet.

“We are overinvesting in traditional media in 2016?

“Why are these marketing budgets like this? Is this because this is what we have always done? Or is because of a lack of understanding of the digital landscape?

“You can see that our customers are spending much of their time online, but our media doesn’t line up with this.

“Don’t get me wrong, I’m not saying stop doing print and TV, but let’s talk about all the things TV can do for you. Are you getting the same results from print and TV today as you did five years ago?”

Mr Tully said dealers should analyse their online data carefully because online activity is becoming more and more important for customers.

“One of the challenges of digital is that there is so much data it is hard to tell what will impact the business and what will drive the bottom line. If you are wondering where to start, I would suggest four simple metrics.

1. How many people are coming to my website?

2. How much time are they spending on my website?

3. How many online leads am I generating?

4. How many phone calls am I generating from online?

“And for those who are awkward about digital, think what else you can learn from a website.

“When customers visit, where do they spend their time, what type of content are they engaging in, what type of devices are they coming in on, what part of our advertising caught their attention?

“What all of this will do is give you a deeper understanding of what customers want.”

He said it was crucial to incorporate these digital metrics into the usual business evaluation systems, just as financial metrics are incorporated.

By Ian Porter

David Tully