Three Ways the Mobile Tsunami will Affect Dealerships

There are many technological trends impacting general and automotive-specific digital marketing in 2012. IT companies around the country will embrace technologies like HTML5, IPV6 and cloud processing, but for car dealers and their digital marketing vendors, by far the most important technological change taking place in 2012 is the rising popularity of mobile devices and smartphones in the United States.

Here are some stats that may shock you:

• By August of 2012, 25 percent of all dealer website traffic will be from mobile devices.

• 70 percent of all mobile searches on Google result in consumer action within one hour (Source: Yusuf Mehdi, Microsoft, 2010).

• The average person takes 26 hours to report a lost wallet. It takes them 68 minutes to report a lost phone (Source: Unisys).

• Mobile coupons get 10 times the redemption rate of mail- or newspaper-distributed coupons (Source: Borrell Associates, 2010 Local Mobile Advertising & Promotions Forecast).

• 4.2 billion people worldwide use a toothbrush (Source: MMA forum Asia 2010); there were 5.9 billion mobile subscriptions worldwide in 2011 (Source: International Telecommunications Union).

The growth of mobile traffic to dealership websites is astounding. In January 2009, most dealer websites averaged less than one mobile visit a day. In January 2010, about 3 percent of a dealer’s website traffic was from a mobile device. In January 2011, about 10 percent of a dealer’s website traffic was from a mobile device.

In January 2012, almost 20 percent of a dealer’s website traffic was mobile. By the end of 2013, dealers will get as much traffic from mobile devices as from desktop computers.

Right now, most dealers have a mobile website, but few of them have any idea how effective or dysfunctional their mobile websites are. In fact, less than a quarter of the dealers I meet at 20 groups or digital conferences know even roughly how much mobile traffic their websites get, and practically none of them actually have a mobile marketing strategy.

What I’ve learned is that almost no dealers have a marketing strategy for the platform that will be the principal medium for customers interacting with their dealership 18 months from now.  Mobile will be the biggest technological disruption over the next two years. A small number of dealers are actually embracing it and riding the wave, and the rest are missing the boat and will drown in the mobile tsunami.

The coming mobile transformation will impact dealerships in at least three important ways: 1) acquisition marketing, 2) in-store or en-route marketing to customers who are “showrooming” for a deal, and 3) fixed operations marketing. Let’s examine them one at a time.

Acquisition Marketing
Mobile’s biggest advertising disruption will be in local search which is, coincidentally, every car dealers’ online marketplace. There are a couple important reasons that mobile paid search advertising is such a huge opportunity for shrewd car dealers. First, according to a study by Flurry, a mobile analytics company, 23 percent of consumer media time is spent on a mobile device, while only one percent of advertising is spent on mobile. Compare that to desktop Internet. Sixteen percent of ad spend goes to desktop, which accounts for 22 percent of a consumer’s media time. Now contrast that to print media, which gets 29 percent of the ad spend and only six percent of consumer time. This is an enormous opportunity for dealers to pay pennies on the dollar for valuable advertising, since there is so little competition for those consumers.

Additionally, because of the form factor of a smartphone, a Google ad appearing on an iPhone gets almost half of the space “above the fold” on the iPhone screen. These advantages for aggressive dealers may be fleeting, perhaps only lasting another couple years until the whole industry wakes up to mobile, but they are there right now. A third advantage that dealers who fully embrace mobile advertising will have is in their effectiveness. Mobile campaigns have different conversions (calls, not lead forms), which means that they need to have different landing pages optimized for the appropriate conversion type. Dealers cannot use traditional landing pages effectively for mobile campaigns. Another reason (besides segregating the landing pages) to split your mobile ad campaigns from your desktop campaigns is to measure ROI. Tying phone leads to keywords is important in desktop campaigns, but it is paramount for mobile. If you can’t directly tie your mobile ad phone leads to your keywords and campaigns, you really have no valuable marketing metrics for your mobile ad spend.

In-Store/En-Route Marketing
All traditional brick-and-mortar retailers are struggling with “showrooming,” the consumer practice of research shopping at a retail store but then going online to purchase the product from a competing website. Showrooming has become even more powerful with the development of price-checking apps like Amazon’s “Price Check.” Dealers will experience this more and more. Even if you’ve got a customer reviewing the numbers in your showroom, they can still price shop your competitors (and vice versa). Does your sales team have a strategy for these scenarios?

Fixed Operations Marketing
If there’s one part of a dealership that’s going to be turned upside down by mobile, it’s the service department. Have you used your iPhone or Android phone to Google “30,000-mile checkup” in your market? Does your dealership appear at the top of Google when you do this? If not, should you buy those keywords? When a consumer clicks on a service-related ad, do they land on a mobile-optimized landing page featuring that service, along with a compelling, targeted offer? Can they schedule an appointment with their phone, click-to-call or -text, or save a mobile coupon? Does your service team snap photos of any damaged parts to text to your customers, so they can understand the problem? Some dealers have already successfully implemented processes like these and dramatically increased their RO conversion rates and dollars per RO.

Make it your mission in 2012 to mobilize your dealership and drown your competitors in the mobile tsunami.

Vol. 9, Issue 6