DETROIT– With dealerships unable to remain open in most areas and consumer behaviors changing drastically, car sales have drastically reduced over the past few months. According to Julie Mynster, automotive executive director of POLK Audience Solutions at IHS Markit, the future of buying cars is not in the lot, but online.
According to the National Association of Automotive Dealers, 80-90% of US car dealers will be transacting online by the end of the year, which is unprecedented.
“We’ve seen necessity drive the change over the past six weeks and moving forward where you had states restricting who could be buying vehicles online, lots of roadblocks in the way of advancing that industry to that e-commerce industry that we’re living with today.”
In a tight market for advertisers, Mynster auto advertisers are pausing their spend and reevaluate their messaging. Brands that are using smart data to determine their messaging and continue spending based on these insights have been successful.
“I think if we look at historical automotive trends, when we saw big recessions in the ‘70s, when we saw the recessions again in 2008,” Mynster says. “The advertisers who have leaned in and spent more and found a compelling and compassionate message have come out as winners.”
Mynster cites Hyundai as a brand that emerged after 2008 as a winner with its Assurance Program that provided relief on the consumer side. She believes that those brands who will be creative and lean into the market by spending more will find similar success in the long run.
IHS Markit is pooling data with TransUnion to help identify the households that will be buying this summer as dealerships begin to open up.
“There’s going to be over 3 million households in the U.S. that have to get a replacement vehicle, their leases are coming to expire and they’re going to need a new vehicle, so working with TransUnion to help identify for our advertisers and those media platforms that these are the households that are going to be buying, make sure they’re in your campaign—it’s going to be critical.”
In order to accelerate the automotive marketplace, Mynster said that we will likely see dealerships and OEM creating frictionless processes for the consumer, such as home deliveries. She also believes that by necessity, there will be a drive in an already-forward movement in data-driven TV.
“Platforms that can identify the appropriate households that will deliver the greatest return for brands will be winners and ones that can prove out the success of that will also be winners.”
This video is part of a series titled Navigating Accelerated Change, presented by Transunion. For more videos, please visit this page.