Auto Dealership Marketing: 5 Reasons to Add CTV to the Mix

Auto Dealership Marketing: 5 Reasons to Add CTV to the Mix
By Stephanie Nerby, VP, Marketing
March 20, 2023

Website with stellar customer experience? ✅

Search engine optimization? ✅

Engaging social media presence? ✅

These are all table stakes digital marketing strategies for automotive dealerships today. What are many car dealership marketing campaigns still missing?

CTV advertising. 

Quotes reading: "71M auto intenders live in a streaming household" and "79% of audiences in the market for a car watch ad-supported video content"

Plus, a new study by the Video Advertising Bureau (VAB) found that TV carries the most influence of all media throughout the car buying process. 

  • Millennials were 2X as likely to become aware of their local car dealership via TV (56% percent) than the next leading channel, online search (26%)

  • 40% of millennials cited TV as their primary motivator for taking a test drive

If that’s not enough to convince auto dealers to get on board, here are five more compelling reasons to add CTV to the auto dealership marketing mix.

1. Reach extension—beyond linear TV

Connected TV should play an integral part in any auto dealership marketing mix because it allows dealerships to reach an incremental audience. This is especially true for cord-cutters and cord-nevers who do not subscribe to traditional cable or satellite TV.

eMarketer predicts there will be nearly 81 million cord-cutting households in the U.S. by 2026, while pay TV subscriptions like cable and satellite are expected to hit a new low of only 54 million households. 

On the other hand, Digital TV Research reports 86% of American households will have at least one streaming subscription by 2027 (averaging 4.37 subscriptions per home). 

Due to the rise of streaming TV (and the decline of linear), broadcast TV doesn’t always deliver the local impressions car dealerships need. CTV (and other over-the-top streaming video advertising) provides access to additional publishers when local TV impressions aren’t enough.

Related content: The local programmatic market—OTT and digital reach extension channels

2. Hyper-local targeting (forget restrictive DMAs)

CTV advertising relies on devices to target and optimize campaigns. Auto dealers can drill down to specific geographic targets with ease and precision. That’s just not possible in traditional ad buying based on DMAs and demographics. 

Advertising on CTV allows dealership advertisers to reach exactly the audiences they want to reach, regardless of DMA. In fact, CTV advertisers can even target beyond the specific zip code, right down to the targeted household.

For example, one of our clients was a local business with services areas covering multiple DMAs across Wisconsin, Iowa, Illinois, and Indiana. To reach potential customers in these service areas on linear TV, they would need a multi-station, multi-DMA campaign — and the budget would have to include at least three or four local TV stations.

But with CTV advertising, the business was able to identify their target audience in specific geographies outside the station DMA, in the specific zip codes where the company offers services. Over the course of 10 months, this client company: 

  • Reached nearly 3M people

  • Averaged 720K impressions per month

  • Increased unique conversion rate by 463% (.08% to .45%) 

The client’s target audience lived across several linear DMAs.

Map of Chicago IL and Madison WI area

CTV targeting at the zip code level allowed the client to reach prospects across DMAs.

Map showing DMAs in Wisconsin, Iowa, Illinois and Indiana

Related content: Hyper-local CTV campaign generates serious holiday sales for CBD skincare brand

3. Segmentation and personalization

Not all potential customers are alike. Data-driven CTV advertising allows dealers to segment target audiences to provide personalized content and remain relevant with car buyers.

For example, savvy marketing strategies might segment audiences around:

  1. Demographics: These include factors such as age, gender, income, and education level. For example, the dealership could create separate segments for young professionals, families, and retirees.

  2. Interests: Segmentation based on their interests and behaviors, such as outdoor activities, technology, and entertainment. These can include outdoor enthusiasts, tech-savvy individuals, and entertainment lovers.

  3. Purchase intent: Advertisers can tie together various signals to understand the likelihood that an audience is in the market for a new car. This usually involves using data from past purchases, online behavior, and other signals. Segments may include individuals who are actively in the market for a new vehicle vs. those who are just starting to consider purchasing a new vehicle.

John DeMarco, SVP at Experian Automotive, explains that to enable this segmentation, most dealerships will need to work with a data partner to layer third-party data onto the dealership’s first-party CRM data:

“...while dealers know their current customers, third-party data from a trusted provider offers additional insights into customer lifestyles and preferences, which enables more informed and powerful marketing strategies.”

Once the dealership has created these segments, it can tailor its CTV advertising content to each segment, providing a more personalized experience for each customer. The dealer may choose to showcase the features of a new vehicle that are of interest to outdoor enthusiasts — or highlight financing options that are ideal for young professionals.

Related content:The top 5 CTV targeting options you need to know

4. Cross-device campaigns for the whole buyer’s journey

“Post-pandemic auto buyers expect options for how and when they buy a car,” explains Rosie O’Meara, CRO at GroundTruth, in Automotive News. “For auto marketers, this means adjusting marketing strategies to reach shoppers with the right message at every step of the research and buying process.” 

Combining CTV advertising with other over-the-top (OTT) advertising efforts allows dealerships to meet their audiences with relevant content at each step of the journey to buying a car. 

Advertisers can connect the user’s journey across device screens and deliver sequential messaging. In other words, dealers can adjust the message and device based on the stage. For example, a campaign could:

  1. Start by generating awareness of the car dealership on CTV. 

  2. Offer vehicle-specific messaging on mobile devices as buyers show interest.

  3. Offer personalized incentives and promotions on laptops where buyers are doing more in-depth research.

Cross-device campaigns not only enhance the buyer’s experience — they also increase campaign performance. A recent study looked at 30 second-ads across multiple channels (YouTube only, Facebook Only, and YouTube/Facebook + TV) and found a 15% lift in purchase intent when ads aired on TV + digital compared to digital alone.

"The truth is that TV and digital work together very well," explains Sean Cunningham, president and CEO of the VAB. "TV has done a good job of fueling digital, which does an especially good job with dealer offerings. But too much of the attribution for success has been assumed to be digital. Now we're seeing more awareness that it was the wrong division of labor."

5. Accurate measurement—including footfall traffic

CTV advertising allows auto dealers to more accurately measure the effectiveness of campaigns at all stages of the buyer’s journey.

High-level metrics provide information on whether ads are reaching and resonating with the target audience. These include:

  • Impressions

  • Video completion rate

  • Cost per completed view (CPCV)

  • Brand impact

But CTV also gives automotive dealers accurate information lower-level metrics, like:

  • Website conversions; including test drives and requests for more information

  • Footfall attribution

  • Customer acquisition cost (CAC)

  • Return on ad spend (ROAS)

One of the most useful CTV metrics for auto dealerships is footfall attribution. With footfall attribution, you can see how many ad viewers subsequently visited a dealership location to take a test drive or make a purchase. 

“Understanding incremental visitation to dealerships can provide critical insights into not only post-ad exposure, but also how those campaigns impact car sales,” explains O’Meara

“Those same insights then can help auto marketers lower acquisition costs by improving targeting tactics and segmenting audiences, based on past purchases, and determine which consumers are in the market for a car now. For auto marketers that are investing in connected TV, post-campaign visitation insights can improve video-ad performance and target reach.”

Related content: CTV Measurement: 8 CTV Metrics Linear Advertisers Love

Ready to take CTV advertising for a test drive?

Whether you’re an auto advertiser or a broadcast station serving them, CTV should be an integral part of your dealership marketing mix. Thankfully, it’s fast and easy to get up and running with Madhive. Get in touch to learn how.

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