Industry News

Why Being The ESPN of Automotive Isn’t A Good Thing



Have you ever paid attention to how something new and different seemingly comes out of nowhere and suddenly disrupts everything overnight? For businesses it can feel like a sucker punch.

Here are some quick historic examples. The introduction of the telephone to homes and businesses demolished the need for telegraphs. The television quickly disrupted radio listenership. The internet killed the need for most people to read newspapers. Email significantly impacted the postal system. Online movie streaming knocked businesses like Blockbuster into extinction. And now, the continuous evolution of smartphones and apps is turning multiple industries on their heads.

Everyone of those disruptors can be viewed as an overnight success. Or, were they?

The telegraph took nearly 60 years to invent. The telephone took about 35 years to come around. The television took over 20 years to get into the first living rooms. The internet has been slowly developed since the 1960s. It’s chronicled that email first began 40 years ago, and smartphones are over a decade old.

What all seemed to be overnight successes actually took quite a while to engineer, scale, and gain traction. When each finally reached a tipping point they seemed to spread like wildfire. The problem for the entities they disrupted was those competitors probably didn’t take them very seriously. In addition, they didn’t plan for the possible change until it was too late. They lacked foresight, creative thinking, and strategic thinking.

That brings us to the massive sports giant ESPN and the incredibly valuable lesson that can be learned from them. The lesson is: Don’t underestimate the power of technology and how one thing can disrupt everything. Even if you don’t see the impact right now, what may only be a small insignificant spark can become a raging fire if unattended and not planned for.

ESPN recently laid off around 100 people. What’s significant about it, in a company of thousands, was many of them were popular on-air personalities with big contracts that had no idea the layoff was coming.

The reasons are varied but many conclude the layoffs were a result of two reasons. Around 2012 ESPN spent billions of dollars scooping up contracts for the broadcast rights to many popular leagues like the NFL, NBA, and college football. It appeared to be an awesome investment at the time. Cable subscriber levels were incredibly strong and the financial gain projected to be even stronger.

Around the same time there was an emerging trend called cord cutters – people who decided to cut cable to stream their video content online. At the time, the technology was a little clunky to easily cut the cable cord but it was still possible and a few hundred thousand households gave it a shot. What was a small number of early adopters has now turned into a big problem.

Fast forward to 2017 and that little cord cutting spark is massive. Media companies like ESPN failed to see what something small with unbridled potential to grow could do. What was a few hundred thousand attempting to do something 5 years ago is now over 12,000,000 people who have figured it out. Technology evolved and so did the masses.

It’s currently estimated ESPN is losing billions of dollars in revenue from the mass exodus of the cord cutting population while still having to pay for massive contracts that aren’t going away any time soon.  Even worse, the bleeding isn’t expected to end immediately. It will take a massive strategic change to get back on track.

Cord cutters happened quickly but they certainly didn’t happen overnight either. The signs were there from the beginning years ago. Many just failed to acknowledge them and plan accordingly for the worst case scenario.

So what does it mean for automotive marketers? For decades, dealerships have been able to rely primarily on several key channels to drive traffic: print media, radio, television, and direct mail as well as some digital sources sprinkled in. Today they all still work but each one is facing challenges as well. The question is, what will happen when one or all of them are no longer effective at reaching who you need to reach efficiently and cost effectively?

What’s the plan once that happens? It’s not a matter of if change will happen, it’s a matter of when change will happen. How prepared will you be? Will you have seen the signs and explored ways to evolve as well? Or, will you do like ESPN and ignore them and be blindsided with your guard down when the tipping point occurs?

The invention of new technology can appear to massively disrupt the world overnight. Those with the foresight to be aware of emerging trends early and plan for how they can drastically change everything will have a leg up on overcoming the challenge. There’s usually plenty of time to do it if you know what to look for. And, if you think not doing it isn’t a big deal, just ask ESPN what the consequences can be.







The Most Expensive, Common Mistake in Advertising & How to Avoid It

Raise your hand if you love wasting as much money as possible. We don’t mean if you like to spend money. We mean just throwing it frivolously out the window.

What about time? Let’s see that hand go up if you love wasting hours and hours of time with not much to show for it.

Just one more. Raise your hand if it drives you bonkers when your advertising doesn’t perform like you expect it to.

If you didn’t raise your hand for the first two and did raise it for the last one, this is specifically for you. It’s about the most impactful thing you can do to stop wasting thousands of dollars and dozens of hours every month on the most common mistake advertisers make.

So what’s the big thought? It’s definitely not earth shaking. In fact, it’s been around for a really long time. The problem is, it’s just not practiced effectively by most media companies and advertisers.

To setup the point, let’s first start with a question almost everyone has heard and maybe even over-contemplated.

If a tree falls in a forest and no-one is around to hear it, does it make a sound?

We all have our thoughts on the tree but what in the world has it got to do with advertising? The answer is absolutely everything. 

Similar to the tree, if your advertising message is deployed and no one is there to see or hear it does it make an impact? The answer is simple. No. The message was irrelevant because no one was there to receive it.

With irrelevance in mind, the most common and expensive mistake in advertising relates to audience and not understanding who your audience is and how to reach them. If you don’t know who to communicate with and how to get in touch with them, everything else in your advertising campaign is essentially worthless. Quick note, focusing on obscure demographics like adults 35 – 54 is not understanding an audience. The same goes for more focused audience identification tactics like equity mining, predictive analytics, and garage predictors. They’re all guesses. Some are more educated than others but still guesses.

Without identifying and targeting the right audience openly looking for what you offer, it doesn’t matter how creative your message is. It doesn’t matter if you have the greatest offer ever. It doesn’t matter if you structured and negotiated the most strategic and valuable media buy possible. The fact of the matter is, almost nobody that you really needed to see and hear your message received it.

Sure, if you saturate a market there’s a chance you’re going to reach some of your intended audience. However, how much did you spend to do it? What were the results? Do you know if the advertising worked or were results just coincidental with favorable market conditions or a push by the manufacturer? Also, is a saturation strategy highly sustainable financially or are you ultimately going to have more losses than wins? Can you maintain that when marketing conditions aren’t as favorable?

See if this sounds familiar. You need more sales. You get your ad agency, media buyer, or local media rep on the phone. Everyone goes to work establishing a media plan. You spend time crunching numbers and information such as demographics, audience size, reach, frequency, time slots, ratings points, cost per spot, cost per piece for direct mail, zip codes and geography, keywords, cost per click etc. The list goes on and on. You move on to developing creative messaging, tirelessly slaving over the best offers and incentives. 

The campaign starts and the excitement is high. Then, crickets. You chalk it up to time and give it another day for it to really sink in. Still crickets. After a few days some people come rolling in but nothing to write home about. Then, more crickets. What happens? After days and weeks of the same results repeating themselves someone finally says, “Well, it didn’t get the results we wanted but it’s an investment in branding.” For some dealerships, the cycle continues on and on month after month. You switch vendors and media. You increase budgets. You decrease budgets. But ultimately, just more of the same.

The problem is, the strategies and campaigns failed because a key step was missed from the beginning. The right audience was never identified and reached. Thousands and thousands of dollars were spent. Dozens and dozens of man hours were utilized to ultimately say, “I guess people know we’re here.” But, knowing you’re there without buying anything doesn’t keep the lights on and money in the bank to pay everyone.

Advertising without understanding who your audience is and how to reach them is like winking at someone in the dark. You know you’re doing it but they have no idea. 

When you precisely know your audience, understand how to reach them, and identify what they want to hear in order to buy from you… that’s essentially money in the bank. The question is, are you willing to depart from the status quo to figure it out? Otherwise, you’re left with not many sales and a lot of good looking messages that the right people never saw.

Evolution to Revolution: The Rise of Data-Driven Marketing

Over the past 25 years, digital technology has transformed dealership marketing from mass media into the age of personalized experiences. What was once “nice to have” is now the must-have way to engage customers.

The digital evolution has become a revolution. Marketers are using digital tools to reach prospects with pinpoint accuracy, replacing old-fashion shotgun mass market advertising with digital tools offering laser sharp accuracy.


Data-Driven Marketing: The rules of engagement are written in code

A glance in the rear view mirror shows this amazing transition. Back in the day, newspaper print ads and inserts, radio, TV, billboards, and direct mail ruled.

In the 1990’s, the internet and emergence of digital advertising flipped the industry upside down with the first targeted communications. Email, instant messaging, websites and microsites offered consumers easier access to information and sales promotions.

During the 2000’s, PPC ads, blogs, RSS feeds, podcasts, SMS marketing and banner ads provided even more opportunity to attract car shoppers with information and promotions. Dealers also began embracing database marketing and equity mining.

An even bigger data picture

Since 2010, rich media ads, dynamic paid search advertising, webinars, Twitter, Facebook and other social media technology have become essential marketing channels. Also, advancements in cookie mapping, geolocation, and mobile apps have allowed dealers to target with pinpoint accuracy and tailor messaging to engage anonymous shoppers more directly.

Take it one step further and now personally identifiable information (PII) and available 3rd party data can be layered for the ultimate targeted experience. Through strategic, data-driven marketing, dealers can get the right prospects exactly the right vehicles, promotions and pricing at the right time. Often leading to bigger returns on their advertising investment.

The steady shift to data-driven marketing has revolutionized every aspect of dealer communications with car shoppers. Dealers can now address prospects with customized communications, on their terms. Mass marketing is being replaced with customized targeted marketing messages that are highly relevant based on the stage of a shoppers journey.

Car buyers simply aren’t responding to the same-old spray and pray mass media messaging. They now expect to be recognized, sold, and retained with communications tailored just for them and their unique needs. The forward thinking dealerships doing well today but looking ahead to the future are recognizing these prolific changes. The dealerships who aren’t are quickly getting left behind.