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How auto advertisers can use digital to drive results, from first click to the showroom

XAXIS AUTOMINDS IN PARTNERSHIP WITH

HOW TO STEER THE AUTO INDUSTRY TO ONLINE SUCCESS

THE AUTO INDUSTRY IS AN ENDURING EUROPEAN SUCCESS STORY.

EUROPE’S AUTOMOTIVE BRANDS — SIGNIFIERS OF HISTORY, QUALITY, PRESTIGE, AND RELIABILITY.

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INTRODUCTION

It provides jobs for 12 million people and accounts for 4% of the continent’s GDP. It’s also one of Europe’s most successful export sectors, with 80% of growth coming from foreign markets [1].

What’s more, Europe’s automotive brands — signifiers of history, quality, prestige, and reliability — have been key to its success domestically and in major export markets such as China. The combined value of the world’s top 10 automotive brands is $214 billion [2].

In this paper, we discuss the challenges facing the European automotive industry and how auto makers can use programmatic digital advertising to capitalise on the power of their brands, and use digital advertising to achieve their marketing goals and drive results.

We also introduce Autominds, a collaborative research project conducted by Xaxis and Kantar TNS. Surveying over 9,000 automotive consumers in three countries (UK, Germany and Italy), our Autominds work shares a unique insight into the mindsets, emotions, and buying triggers of six key audience segments in the automotive market. It promises to help auto brands achieve higher conversions across relevant key performance indicators (KPIs).

With the latest technologies and data-led thinking, you can hone the effectiveness of your digital marketing to help drive the performance you are looking for, whether it be brand awareness or equity, the volume of leads or visits to the car lots, while simultaneously reducing the cost of acquisition and increasing conversion rates.

Sources:1. European Commission Growth Sectors, Automotive Industry https://ec.europa.eu/growth/sectors/automotive_en2. Auto 100 & Tyres 10 2016, Brand Finance, October 2016.

Source: Auto 100 & Tyres 10 2016, Brand Finance, October 2016.

The auto industry provides jobs for 12 million people.

80%growth comes from foreign markets.

It accounts for 4% of Europe’s GDP.

12 Million 4 %

THE CHALLENGE OF THE CAUTIOUS CONSUMER

In the first half of 2017, the number of cars sold in Europe increased by 4.6% [1]. By value, the EU is the world’s biggest exporter of motor vehicles [2]. But despite this strong headline growth, the industry faces well-publicised innovation and changes that will affect its existing business models, such as the rise of automated cars, affordable car services like Uber, and the switch to electric vehicles.

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THE EVOLVING AUTO INDUSTRY

Sources:1. Europe’s H1 sales hit post-crisis high; rebound may be losing momentum, Automotive News Europe Monthly Magazine, 6 August 2017. 2. International trade in motor vehicles, Eurostat, June 2017. 3. The Effect of Ride-Sharing on the Auto Industry, Dr. Anthony Hughes, Moody’s Corporation, 2017.4. Rethinking Transportation 2020-2030, James Arbib & Tony Seba, 2 May 2017, RethinkX. 5. UK to follow France in banning petrol and diesel cars by 2040 – going all electric, Fred Lambert, 25 July 2017, Electrek.6. Auto Sales Slowdown Continues In July, Jim Henry, 29 July 2017, Forbes.7. US July auto sales miss estimates as pent-up demand slackens, 2 August 2016, Reuters.8. Eurozone growth tipped to inch down in August, 5 September 2017, Paul McClean, Financial Times.9. Apple driverless car project killed by lack of direction, say employees, 24 August 2017, Jimi Beckwith, AutoCar. 10. Google reportedly shelves plans for its own self-driving car, 13 December 2016, Matt Burgess, Wired.

THE ACCELERATING EVOLUTION OF THE AUTOMOTIVE MARKET According to a recent report, even factoring in the accelerated depreciation of shared cars used by drivers for services such as Uber and Lyft [3], the rise of ride-sharing will result in a 70% drop in demand for new vehicles [4] by 2030. Most major European markets plan to phase out the internal combustion engine by 2040 at the latest [5]. And the move to automated vehicles will open the sector to well-funded, and highly innovative competitors.

There is also a risk that the focus on this medium- to long-term disruption will distract from challenges that are far closer to hand.

In 2017, car sales in the US fell by 2% compared to the previous year [6]. One likely explanation for this, is that the previous high sales figures were the result of deferred demand, built up during the post-2007 downturn [7]. In this scenario, we should expect European sales — currently buoyed by the Eurozone recovery, with GPD expected to rise by 2.1% in 2017 [8] — to fall, once pent- up demand among EU consumers has been met.

FUTURE OPPORTUNITY, PRESENT CHALLENGE

Fundamentally, the development of new technologies such as driverless cars and high-performance electric vehicles is exciting and creates a buzz around the automotive industry. But it also presents two challenges to today’s industry leaders.

The first is well known: competition by new entrants with different, potentially disruptive skill sets (although reports that both Apple and Google have scaled back their driverless car ambitions is testimony to just how technically complex automotive design really is [9], [10]).

The second challenge is far closer at hand. The media is feeding consumers a diet of stories about various wonder technologies just over the horizon. The risk is that this prompts consumers to decide, either consciously or subconsciously, to defer planned vehicle purchases.

2 %704.6increase of cars sold across Europe in 2017.

drop in demand for new vehicles by 2030 as a result of ride-sharing.

% %decrease in car sales in the US.

THE FRAGMENTED AUDIENCE

In the analogue world, reaching the right segment for any given car model was relatively simple. There were a finite number of publications and it was possible to map the desired consumer audiences to each newspaper or magazine with a high degree of accuracy.

This is no longer the case. On any given day, an average millennial consumer now spends more than twice as long reading online media and listening to online audio as he or she does consuming traditional media [1].

Nor is this trend confined to millennials. According to Pew, US print circulation fell by 8% in 2016 [2]. During the same period the audience for high performing news sites, with 10 million unique visitors per month, grew by 12% [3]. At the same time as they moved online, consumers have also split their attention across many devices. The average adult now does around half of their internet browsing on a mobile device [4].

According to Accenture, 80% of car buyers conduct all but their final-stage research — when they visit a show room — online [5]. A study by Autotrader confirmed this finding, with the average buyer doing 59% of research into a new car purchase online [6].

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AUDIENCE FRAGMENTATION

Sources:1. The State of Play Of Global Media Consumption, Canela PR & Brands2Life, 2016. 2. Newspapers Fact Sheet, 1 June 2017, Pew Center.3. Digital News Fact Sheet, 7 August 2017, Pew Center. 4. Statistics on consumer mobile usage and adoption to inform your mobile marketing strategy mobile site design and app development, 1 March 2017, Dave Chaffey, Smart Insights. 5. Car Buyers Want Better Digital Experience, Most Ready to Complete Entire Process Online, Accenture Study Finds, Accenture, 16 April 2015.6. 2016 Car Buyer Journey, Autotrader.

WHERE TO OPTIMISE TODAY’S MARKETING MODEL

It is possible to reach automotive audiences by concentrating advertising budget on automotive publishers and premium publishers that appeal to the right demographic. But there are limitations built in with this model.

The most obvious limitation is that it’s expensive. Concentrating on premium inventory means that budgets don’t go as far as they could do if engagement is efficiently spread across a broader digital footprint, in the way that’s possible when working with a specialist in programmatic advertising. Engaging this way also sacrifices depth: even auto-enthusiasts will spend much of their online time on other sites — why not reach them there, too? Finally, it makes it more difficult to address the audience across the entire sales journey.

80% OF CAR BUYERS CONDUCT ALL BUT THEIR FINAL-STAGE RESEARCH ONLINE.

8 %audience growth in 2016 for high-performing news sites.

Print circulation down by 8%.

of research into new car purchases is conducted online.

59 12 %%

Source: Car Buyers Want Better Digital Experience, Most Ready to Complete Entire Process Online, Accenture Study Finds, Accenture, 16 April 2015.

OUTCOME-BASED PROGRAMMATIC ADVERTISING

Programmatic advertising involves the automated buying of digital advertising inventory according to tightly defined criteria. Often this is done in real time. Driven by AI, machine-learning and a sophisticated layer of data-science, programmatic makes it possible to precisely define an audience based on brand segmentation, and then to address that audience across the whole of its digital footprint at scale.

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ACHIEVING OUTCOMES

XAXIS MAKES MARKETING SPEND ACCOUNTABLE

OUR CLIENTS BENEFIT FROM INTELLIGENT, DATA-LED PROGRAMMATIC ADVERTISING.

AT XAXIS WE PLAN AND DESIGN CAMPAIGNS THAT HIT OUR CLIENTS’ AGREED KPIs.

USING PROGRAMMATIC TO OPTIMISE YOUR AD SPEND AND DRIVE ATTRIBUTION

Modern programmatic advertising is about much more than simply efficient media-buying. Our specialists apply their expertise, data, algorithms, technology and media investments to create campaign strategies built around achieving clients’ set goals and KPIs.

In the pre-launch phase of a campaign, our programmatic experts will work with a client to build a strategy leveraging our tools and experience to help achieve the desired results.

We strive to reach customers (current and potential) across their whole online journey and at every stage of the sales pipeline. This both deepens and prolongs engagement.

Given the importance of accountability and attribution of marketing investment, we also help track, analyse and report on the results of a campaign.

Sources:1. The State of Play Of Global Media Consumption, Canela PR & Brands2Life, 2016. 2. Newspapers Fact Sheet, 1 June 2017, Pew Center.3. Digital News Fact Sheet, 7 August 2017, Pew Center. 4. Statistics on consumer mobile usage and adoption to inform your mobile marketing strategy mobile site design and app development, 1 March 2017, Dave Chaffey, Smart Insights. 5. Car Buyers Want Better Digital Experience, Most Ready to Complete Entire Process Online, Accenture Study Finds, Accenture, 16 April 2015.6. 2016 Car Buyer Journey, Autotrader.

Xaxis is outcome-driven. Through our expertise, insights and technology, we help our clients achieve their set goals and KPIs.

TechnologyInsightsExpertise

XAXIS AUTOMINDS: CARS, CONSUMERS, AND THE SCIENCE OF EMOTION-BASED ADVERTISING

One challenge for car advertisers and media planners is to efficiently address the optimum online audience in a way that not only maximises viewable impressions, but also engages consumers in the right place, at the right time, with content that will delight, entertain, and convert. To find a way to do this more effectively, Xaxis partnered with market-research specialists Kantar TNS to produce insights piece, ‘Autominds’: a deeper, more nuanced, understanding of the emotional motivators of car buyers.

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THE POWER OF EMOTION

AUTOMINDS AND THE UTILITY OF EMOTIONAL MINDSETS

Up to 95% of the decision-making process in any purchase takes place in the consumer’s subconscious mind [1]. According to a study of data held by the Institute of Practitioners in Advertising (IPA), adverts which appealed to consumers’ emotions were twice as effective as ads that sold on rational benefits alone [2].

Xaxis worked with market-research specialists Kantar TNS to analyse the emotional drivers behind consumer automotive purchasing intentions in three countries: UK, Germany and Italy. Researchers surveyed 3,000 consumers in each market. They used advanced projective techniques to gather information on consumers’ subconscious and emotional reactions to brands, and on important aspects of brand personality.

The insights uncovered by the Autominds project showed that auto consumers can be segmented into six audience groups, based on their emotional mindset and motivations. We were then able to match each audience group with the auto brands that they are most likely to own today, as well as those brands that they aspire to own in the future. The research also garnered important insights on the best way to engage with each segment.

Sources:1. The Subconscious Mind of the Consumer (And How To Reach It), Gerald Zalt-man, Harvard Business School, 13 January 2003.2. Brand Immortality: How Brands Can Live Long and Prosper, Hamish Pringle, Peter Field, Kogan, 2008.

of the decision- making process takes place in the consumer’s mind.

Emotive ads are twice as effective when compared to ads sold on rational benefits alone.

There are six different types of Autominds. Click here for more details.

UP TO 95% OF THE DECISION-MAKING PROCESS IN ANY PURCHASE TAKES PLACE IN THE CONSUMER’S SUBCONSCIOUS MIND.

“

”GERALD ZALTMAN,

HARVARD BUSINESS SCHOOL.

952 %X

LEVERAGING AUTOMINDS, INSIGHTS FOR YOUR BRAND

As well as identifying the emotional needs underlying brand preference, the Autominds research also gives auto brands insights they can use to design and optimise their messaging. Understanding what triggers emotional connection with a brand means you can emphasise those elements of your brand personality that best speak to this need state.

Emotions and mindsets are a highly effective tool that brands can use, in conjunction with more traditional segmentation models, to increase the precision with which brands can leverage programmatic advertising to drive specific outcomes. Using the research, automotive marketers can expect to see a significant impact in key conversion metrics, such as the number of test drives generated by a campaign.

Finally, by understanding the foundation of a consumer’s emotional connection to a brand and that customer’s current mindset, it’s possible to say with a high degree of accuracy how brand-loyal a customer is, and to which other brands they may be susceptible.

Using this information, you can choose carefully whether you want to target brand loyalists or those that tend to switch, and tailor your message and promotion precisely to each group’s triggers. Recent research by Yahoo found that ads served to customers who are emotionally receptive are 40% more effective [1].

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XAXIS & KANTAR TNS METHODOLOGY

ONE OF THE BEST WAYS TO INCREASE THE RECEPTIVITY OF BRAND-AMBIVALENT CONSUMERS IS WITH TARGETED BRAND-AWARENESS CONTENT.

Sources:1. Emotional context could make digital ads 40% more effective, Paul Hardcastle, Yahoo, March 2017. 2. Brand success in an era of Digital Darwinism, Jacques Bughin, McKinsey Quarterly, February 2015.

One of the best ways to increase the receptivity of brand-ambivalent consumers is with targeted brand-awareness content. A study by McKinsey, found that companies with a high level of digital capability, including the ability to raise brand awareness online, converted awareness to sales 2.5 times as often as their competitors [2].

40By understanding the foundation of a consumer’s emotional connection to a brand and that customer’s current mindset, it’s possible to say how brand-loyal a customer is.

Recent research by Yahoo found that ads served to customers who are emotionally receptive are 40% more effective.

%

Source: Brand success in an era of Digital Darwinism, Jacques Bughin, McKinsey Quarterly, February 2015.

AUTOMINDS PROFILES: THE EMOTIONAL MINDSETS OF CAR BUYERS

1. The Methodical Mind

Members of this segment see themselves as intelligent, methodical, and in control. Marketing content aimed at Methodicals needs to reinforce this self-perception.

2. The Sophisticated Mind

This group is motivated by a need for status and to publicly reaffirm its freedom, independence, and its own aspirational lifestyle.

3. The Practical Mind

For this segment, driving is about fun and independence, not just for themselves but also for their family. Their identity is strongly anchored in their role as the lynchpin of their family.

4. The Responsible Mind

Consumers in this segment need to feel reassured that they are making the right decision, not just for themselves but also for their family.

5. The Free-Spirited Mind

Free-spirited drivers’ emotive need state is to perceive themselves as free, uninhibited, and independent. Their car should contribute to and support this self-image.

6. The Thrill-Seeking Mind

Thrill-seeker drivers need to feel excited and bold. Driving should give them a sense of energy, adventure, and purpose in their lives.

The Xaxis and Kantar TNS research and insights revealed some interesting and at times surprising things about the mental state, aspirations, and emotional needs of current car buyers. This research can be layered on top of demographic and behaviour profiles to define a high-converting audience, as the foundation for an outcomes-based campaign.

Based on need states, the research uncovered the following six audience segments and their split across the UK market.(To find out more about the Mindsets splits in Italy, click here. For Germany, click here)

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EMOTIVE MINDSETS

The Thrill-Seeking Mind

The Sophisticated Mind

The Methodical MindAUTOMINDS UK MARKET SPLIT

The Responsible Mind

The Practical Mind

The Free-Spirited Mind

19%

19%

18%

21%

10%

13%

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AUTOMINDS AND THE EMOTIVE MINDSETS

THE METHODICAL MIND

Emotional mindset: needs to feel intelligent and well-informed, motivated by safety

How they use their car: short leisure trips

Interests:

Car type:

Brand affinities:

THE SOPHISTICATED MIND

Emotional mindset: needs to feel in charge and superior

How they use their car: for essential trips

Interests:

Car type:

Brand affinities:

THE PRACTICAL MIND

Emotional mindset: Practical drivers are motivated by family and the need to feel essential to their family

How they use their car: for leisure trips with their partner and children

Interests:

Car type:

Brand affinities:

Emotional mindset: careful and cautious, this segment needs to feel they’re making the responsible choice for their family

How they use their car: for short leisure trips

Interests:

Car type:

Brand affinities:

THE RESPONSIBLE MIND

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AUTOMINDS AND THE EMOTIVE MINDSETS

Emotional mindset: affirmation of their status as fun, thrill-seeking, and independent

How they use their car: for short leisure trips. Driving makes them feel free and independent

Interests:

Car type:

Brand affinities:

THE FREE-SPIRITED MIND THE THRILL-SEEKING MINDEmotional mindset: the thrill seeker needs to feel bold and energized

How they use their car: for day-to-day transport but also for leisure

Interests:

Car type:

Brand affinities:

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CONCLUSION

THE SCIENCE OF EMOTION AND OUTCOME-BASED ADVERTISING

Through the power of programmatic advertising, car makers can run highly efficient campaigns, capitalising on the value of their brands. This allows them to surface their message efficiently to defined audiences at a scale that would be far more difficult to reach when relying solely on the more traditional advertising methods.

At Xaxis, we make sure that we drive campaign results, based on the agreed goals with the aim of achieving outcomes, which is a win-win for everyone.

HOW TO BOOK YOUR NEXT CAMPAIGN

To find out more about the Autominds research and how Xaxis can help you achieve results for you

and your brand, email us at xaxemeamarketing@xaxis.com

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PREMIUM AUTOMOTIVE BRAND

JAGUAR LAND ROVER In 2015, working together, Mindshare and Xaxis helped Jaguar Land Rover improve its cost per acquisition by 65%.

Challenge The media plan leaned heavily on 50 premium publishers, competing based on last-touch (last exposure before conversion) attribution. Mindshare and Xaxis felt that by centralising media-buying in a single, programmatic way, they could improve segmenting and targeting, reduce wastage, and increase both performance and transparency levels in terms of reporting results.

Strategy Xaxis felt it could deliver greater transparency, control and efficiency for Jaguar Land Rover by taking an audience-first approach and media-buying. Centralised within the [m] insights data management platform (DMP), Xaxis and Mindshare worked together to develop a plan that integrated a range of high quality data and inventory sources. Oracle Data Cloud provided advanced multi-touch attribution.

ResultsThe new platform delivered 100% guaranteed viewability, stronger performance throughout the funnel than JLR’s media achieved in 2015, and significantly higher conversion rates.

A premium auto brand came to Xaxis with the goal of increasing brand awareness and purchase intent among relevant audiences.

ChallengeThe client wanted to reach 35 to 54 year-olds on YouTube. Success was defined as a view-through rate (VTR) of higher than 24%, the brand’s previous performance benchmark.

StrategyXaxis developed a plan based on an in-depth and detailed understanding of the brand’s consumers, which was used to build customised and scaled look-alike audiences. Users were targeted based on online behaviours showing intent to purchase and on predictive factors, which made it possible to address consumers in the early stages of the sales pipeline.

ResultsThe campaign’s average VTR was increased by nearly 20%, easily beating the previous benchmark and the industry average.

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XAXIS AUTO CASE STUDIES

WORKING TOGETHER, MINDSHARE AND XAXIS HELPED JAGUAR LAND ROVER IMPROVE ITS COST PER ACQUISITION BY 65%.

+ 20%

VTR reached

with XAXIS

“

”Average

VTR

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