GOOGLE THINK AUTO 2018: FULL REVIEW

June 21st has come and gone, and yet another Google Think Auto conference is in the books. Moving this hotly anticipated event from September to June was a solid choice by the Google team — can you blame us for thinking that? We live in Edmonton where it’s winter 10 months of the year and we were dying for some warm weather!

The Google auto team did not disappoint this year either. The event, held at the Toronto Centre of the Arts for a second year in a row, started off with a little networking and a candy bar to sweeten everyone up before we all took our seats to hear the latest stats and insights. If you read our summary from a few weeks ago, you already know that the theme of this year’s event was tweaked slightly from the year before where they introduced the three buyer personas: First Time Buyers, Brand Loyalists, and Brand Switchers. This year was all about exceeding customer expectations and channeling new methods to target different buyer mindsets: those not in the mindset, those in the consideration mindset, and finally, those in the buying mindset.

Sabrina Geremia, Managing Director with Google Canada, kicked the day off with a statement about consumer expectations rising across the industry. Canadians are using their mobile devices more than ever, which means our expectations are rising especially when it comes to time — the time it takes to respond, the time it takes to complete a transaction — it’s all about time. We’re now in an age where we will order an Uber and proceed to cancel it because it was going to take 5 minutes too long and there was a closer car nearby. Voice searches and ‘near me’ searches are continuing to rise, and why? We’re all short on time and we want to know the fastest way to get where we need to so we can get what we want in the most efficient way possible. This is something that the automotive industry needs to lean into and, at the risk of being a little too on the nose, they need to lean into it quickly.

For the past 5 years, we’ve all pushing our dealers to “get on board with digital”, and for the most part, they have delivered. Website: check. Mobile experience: check. Search engine marketing: check. Unfortunately, cultivating that digital presence is so much more than simply checking boxes. The industry now needs another shift; to focus more on the consumer experience and to exceed the consumer’s constantly rising expectations.

Exceeding Expectations

This year, Google surveyed 3,000 Canadian car buyers across the country to understand their automotive purchase experience, or journey. The survey highlights where the industry excels, where the shortcomings are, and what may lie down the road. Sean Cunningham from the Google team ran us through their findings, a lot of which should come as no surprise — go grab a coffee and a protein bar, and buckle in for a ton of stats coming your way!

• Why shoppers have higher expectations:
  • Access to more ways to buy or lease a vehicle.
  • They are using more sources.
  • They are considering more models than ever before.
• The purchase cycle has increased from 57 to 62 days, which breaks down into the following three categories:
  • 35 days thinking (up from 33 days in 2017).
  • 17 days researching (up from 15 days in 2017).
  • 10 days buying (up from 9 days in 2017).
• 1 in 3 buyers pause their journey at some point for the following reasons:
  • Too busy.
  • Had a tough time deciding what to buy.
  • They wanted to make sure it was the right decision.
• 59% would consider a new car brand that didn’t exist before (think Tesla and Genesis).
• 3 brands on average are being considered.
• Dealer visits are close to the same as last year, 2.9 on average with 1.6 test drives being completed.
• 84% would rely more on online research to reduce their dealer visits for their next purchase.

“You can have a great website and online presence, but it doesn’t matter if it breaks down at the dealership.” Sean Cunningham

• 1 in every 2 buyers are frustrated with the dealership experience, most common issues were with sales staff and processing time:
  • 18-34 and 35-44 year olds expressed the greatest frustrations (63% and 52% respectively).
• 46% are open to skipping the dealer paperwork and purchasing their vehicle online (vs. 41% in 2017).

We need to look beyond the traditional demographics like targeting Mike, who’s 46, lives in the suburbs, and makes $100k a year, and start focusing more on the buyer personas. Kelly, Mike, and Mohit all want CUVs, and all for different reasons. It’s up to us to be there when those moments arise. Life events, not to mention finding the right value for their investment, have a huge impact on all three buyer personas.

As auto marketers, we place a lot of focus on Day 1 and day 62 of the car buying journey, but what about the 60 days in between? What are consumers most interested in during that time period? Features! Here are the top features in the most recent purchases along with the top research sources and top digital sources specifically:

Rounding out the top 10 for digital resources used for researching a vehicle were: YouTube, editorials, Facebook, blogs, and email. With access to more research sources, dealers need to ensure they are providing relevant content based on what people are actually looking for. Will a stroller fit in the trunk of a CUV? Seems like a simple question, but something that’s more difficult to find an answer to than it should be. Make things easy for consumers, and your dealership will be an easy choice for them.

Evolving to Exceed Expectations

So how do we tie this all in? Identify your most valuable buyers, meaningfully connect with them, and deliver a better car buyer experience. To run us through what that really means, George Tzorzis from the Google team got on stage and broke it down for us. So how do we deliver a better car buyer experience? What does making it easy mean? This can be simplified into three words:

Convenient. Frictionless. Personal.

1. Convenient:
   Save buyers time.
   a. 24% of car buyers who pause are “too busy”.
   b. 68% of car buyers are interested in test driving from home.

Ex. Check out this great example from Genesis: Genesis at Home**

1. Frictionless:
   Remove obstacles.
   a. Make things easy for consumers to find (remember from point 1 — they are busy).
   B. Two main things consumers are looking for — inventory & pricing.

Ex. For a great non-auto example, check out the Hilton Digital Check-In. You can even select your own room right from the app!
Ex. For OEMs jumping on board, start looking into Canvas by Ford, BOOK by Cadillac, and Care by Volvo.

3. Personal:
   Bring connections to life.
   a. The connection needs to be emotional & functional.
   b. What can you do? Well, start by delivering more personalized experiences for your Kellys, Mikes, and Mohits.
   c. Keep these things in mind: identity, intent, and intelligence, and don’t be afraid to use the power of machine learning to get the right message in front of the right people (shameless plug — something Strathcom’s Online Advertising department does exceptionally well).

Video Content for Every Mindset

Next up on the stage was Ashley Hahn. She’s been around the Google circuit for a little while now and always showcases what car dealers can improve upon to get car buyers’ attention on the world’s second largest search engine: YouTube. Ashley started by taking us on a quick trip down memory lane, reminding us of the buyer mindsets.

• 2016 – Thinking, Researching, Buying.
• 2017 – First time buyer, Brand Loyalist, Brand Switcher.
• 2018 – Consideration mindsets – not in the mindset, in the consideration mindset, in the buying mindset.

The question:

What content should I be making?

The answer:

It depends.

*insert eye roll here*

The answer no one wants to hear. There are so many things for car dealers to keep in mind when developing content for their potential buyers, and while she couldn’t touch on them all, she did lay out what can be done to get in front of your target audience.

NOT in the mindset

• What do we need to do? We can start by intercepting their daily browsing behaviour, and compel them to hear us.
• We need to understand what they need from their vehicle, and connect to that need state.
•  Play the long game. A 6+ month investment in brand-building will pay back much more strongly than short-term sales activation.

The stats:

• 94% of car buyers surveyed watch videos on YouTube.
• 95% viewable (vs. 66% industry average).
• 95% audible (meaning they watched with the sound on).

5 main reasons for having a vehicle:

1. My task master: 55% said “necessary for completing chores and getting around.”
2. My partner in crime: 48% said “allows me to explore the world around me and enjoy the ride. It’s less about the destination and more about the journey.”
3. My safety net: 47% said “keeps me, my passengers and those around me safe.”
4. My assistant: 32% said “keeps me connected when I’m driving with the latest technology.”
5. My oasis: 27% said “a place to relax, unwind, or sing at the top of my lungs.”

What to do:

• Strategy: TV & YouTube
  • Building sufficient cross-platform reach and frequency
• Audiences: Broad
  • detailed demographics, affinity
• Products: Reach Vehicles
  • mastheads, google preferred, bumpers
• KPIs: Unique reach, frequency
  • Test unique reach targets, optimize towards 2x/week frequency

In the CONSIDERATION mindset

• What do we need to do? Get in their consideration mindset — and stay there!
• How do we do it? It starts with understanding the content they’re watching as they research, and serve it up proactively.

The stats:

• 2/3 of car buyers watched automotive videos online while researching.
• 97% turned to YouTube (vs. 24% visiting OEM websites and 12% looking to Facebook).
  • What kind of content are they watching?
    • Vehicle deep dives
    • Reviews: 46% watched reviews, whether expert reviews or UGC reviews
    • Comparison videos: 25% watched videos comparing 2 or more vehicles (up 78% YTD)
    • Feature overviews: 22% of videos watched highlighted a particular feature
  • No one is really using paid media for these types of videos, but it’s what people are watching!

What to do:

• Strategy: Always-on researching content
  • Support those in the consideration mindset at every phase
• Audiences: Precise
  • in-market, customer match, similar audiences
• Products: Skippable
  • TrueView, TrueView Discovery
• KPIs: Consideration, search interest
  • Via brand lift

In the BUYING mindset

• What do we need to do? Drive them to action. You know — close the sale.
• How? “Welcome the creative shop guy to the stage.” – Matt Lindley, Unskippable Labs Report

The stats:

• 5 – 35% of ROI is from targeting.
• 50 – 80% of ROI is from creative.
• Battle of the sexes: we are better at telling stories to men than we are to women.

What to do:

• Use TrueView for action.
• Five primary ad types:
  • The explainer
  • Advanced targeting: custom affinities
  • Making your case: information rich stories
  • Upside down ads: tell them at the beginning and see if they stay
  • Length is an opportunity

Tune in to your audience!

The Power of Machine Learning

Up next was Riley Nelko, to run us through the power of machine learning, and the importance of consolidating data. With machine learning, we can predict car buyer needs. Think of how your Netflix screen is completely different from those of your friends or even compared to your significant other. With machine learning, Netflix is able to predict what other shows you might like to watch before you have even thought of it. It knows your needs before you do! We have the ability to do this in the automotive industry too, but there are a few hurdles to overcome such as alignment between tiers, data ownership, differing goals, etc. We need to start doing things differently in auto in order to tap into the true power of machine learning.

“You can do things the way they have always been done, and that will give you a pretty good chance of being mediocre.” Kyle Dubas, GM of the Toronto Maple Leafs

Dealer Innovation

To tie in tier 3 to the day, Matt Growden was up next to talk about dealer innovations. Since this blog is turning into quite the novel, here is another run through of some previously mentioned stats, as well as a few new ones.

• 1 in 2 car buyers were frustrated during a dealer visit (but we already knew this).
  • We’re all offering free coffee when our customers want free wifi.
• What do dealers want help with?
  • Understanding the data and offer training sessions on digital best practises.
• What are the biggest opportunities for dealers?
  • 57% – online advertising.
  • 56% – new ways to connect.
  • 46% – selling cars online.
  • 42% – using video to sell cars.
• What does the future of the industry look like according to Matt?
  • A total of 3 trips to the dealer.
  • Online sales – 46% of car buyers said they are likely/very likely to consider purchasing a vehicle online.
  • Subscriptions – 42% are open to using a vehicle subscription service in the future instead of purchasing or leasing options.
  • Electric sales, hold the service – current EVs have about one tenth of the moving parts in the common internal combustion engine. Remember earlier when we mentioned people had less time than before. Well, they have even less time for going to the service department.
  • Autonomous cars – 2 out of 5 car buyers and half of first time buyers already have said they would be willing to purchase a self-driving vehicle.
  • ‘Over the air’ repairs – in just a few years, major automakers will be rolling out cars that can be updated remotely while parked in your garage or while you’re asleep in bed.
    • Dealerships are going to start looking more like a Genius Bar than Harry’s Used Car Emporium.

So how are dealerships preparing for those changes?

• 9 out of 10 car buyers want dealers to be open on Sunday and to have longer hours.
• 53% said they would be likely/very likely to book service appointment on weekends/late hours.
• 20% said they want faster response times (within 15 mins); 38% within the hour and, if you can’t manage that, 80% said they expect a same day response at the bare minimum.
• 87% of brand loyalists are likely/very likely to purchase/lease again based on the service they receive.

To back up some of those hard hitting stats, two dealerships, Paragon Honda & Koch Ford were brought to the stage for a dealer panel:

• Service department
  • Paragon Honda has introduced overnight service appointments to their dealerships. Customers don’t benefit from getting service from the dealer, dealers are the ones who benefit. Their goal was to make service appointments a frictionless transaction. Using Google Assistant, customers book their appointments right from their car and it will sent over to the Paragon Honda team.
  • Time is the new currency, and they are saving their customers tons of time by not needing to go into the dealership.
  • They’ve done $2.2 million in service business this year so far without customers coming to the dealership.
• Digital retailing
  • The point of adding digital retailing to the website was to give customers the option to do as much or as little of the car buying process online before coming to the dealership.
  • Koch Ford has had this implemented on their website for a few years now and continue to see more and more customers using this service to speed the process up.

“The current business model is dead.  The best redesign of the sales process is elimination.” – Paragon Honda

Measurement Evolution

Next up was Tony Singh to chat about the measurement evolution. In 2017, Google’s goal was to drive people to the dealership and measure this through dealer visits. Here’s how they did:

• In 2017, Google was able to track 2.5 million dealer visits.
• Projections for 2018 are that 7 million dealer visits will be tracked, meaning:
  • a 20% increase in dealer visits recorded
  • a 15% decrease in dealer visit cost

What else did they discover throughout 2017? Canadians want more control of their personal data — 84%, and 76% are happy to exchange data. So if Canadians are happy to exchange data, why aren’t we using more of it to better target and execute media?

Media budgets historically have been dictated from the top down and are not based on the numbers. This method simply won’t work anymore. We need to make data driven decision for our investments and look at performance, brand lift, and what’s going to drive bottom-line growth.

What can we do?

• Consolidate media buying – activate data insights.
• Full review of user/data policies – make them easily accessible.
• Position marketing to drive profits via business outcomes — structure your team for the future.

What Now?

To wrap up the day, who better than Deepak Anand to give us a final insight into all the conference’s information. Deepak is known for his incredibly positive outlook on the industry, and where it needs to go. If you ask him, it’s all sunshine and rainbows! And if you’ve ever seen Deepak present, you know that the previous statement was a complete lie. Although his outlook wasn’t all doom and gloom, he posits that there is an extreme pivot that needs to happen in the industry if it’s going to survive for the next 10 years.

“Cars are freedom.” Although this mentality hasn’t changed with Canadian car buyers, for the first time since 2009 when Deepak joined the Google Auto team, the industry will see a decline in overall sales. What’s changed? Is the Trump – Trudeau relationship and steel tariff the main variable affecting the industry? Or is it maybe that customers are starting to think differently about their car purchase? We know that they aren’t just looking at what the bi-weekly financing payment is anymore, they are looking at the true cost of owning a vehicle; trying to figure out what’s best for them now, especially in light of the access to transit, car-share, and ride-share programs.

We need to start looking at the true value of a car — not just the price tag, but things like gas, insurance, parking, etc.

Deepak’s challenge to the automotive industry:

• Do something different.
• Improve mobile.
• Improve the car buying experience, aspects like…
  1. Online Sales: 46% of car buyers said they are likely/very likely to consider purchasing a vehicle online.
  2. Predict unique car buyer needs (refer back to the top features).
  3. 68% of car buyers are interested in test driving from home.
  4. 2/3 of car buyers watched automotive videos online while researching — so what kind of online content are you creating?
  5. Identify your most valuable buyers, and learn how to meaningfully connect with them in order to deliver a better experience.

Ready for More?

Now that you’ve taken 20 minutes out of your busy day to read this amazing blog, start brainstorming things you want to implement in the dealership. Maybe it’s doing feature highlight videos, perhaps starting with one a week, increasing that to two a week, and so on. Maybe it’s thinking about your service department different, and how you can make that experience more frictionless. Maybe it’s challenging your sales staff to come up with a personal touch that they can add to their customers’ experience. We’re not saying you need to do all these things today, but we all know that major changes need to happen throughout the rest of 2018 if we’re going to grow overall as an industry.

If you’re dying for more stats, and have another hour to kill, here are a few of our previous Think Auto recaps for you to go back to: Think Auto 2017, Think Auto 2016 and Think Auto 2015.

Happy reading!