Whose Audience Is It Anyway?
In this time of economic uncertainty, automobile advertising has undergone a head-to-toe makeover to boost sales and allow the manufacturers to survive. Not surprisingly, this facelift has included revamping advertising strategies in an attempt to reach the most lucrative audience. Some of these changes in tactic, including the use of pixeling in a creative asset and the purchasing of remnant ad space on third-party sites, however, are not having the intended effects.
Who has the most valuable audience for car manufacturers and dealers? You’ve got it: third-party auto sites, whose inventory has been carefully culled and researched to reach the highest possible number of in-market, engaged customers, namely people who are actually shopping for a car.
Lately, though, a few aggressive automobile manufacturers and their ad agencies have begun surreptitiously pixeling, through creative assets, the audiences of their marketing partners—most notably that of third-party auto sites. This allows the advertiser to use an efficiency ad network to deliver ads, retargeting the valuable audience.
Ads are also being placed by efficiency ad networks on other third-party sites, via the purchasing of remnant ad space. While admittedly inexpensive, this practice has few benefits beyond price. The space is cheap because manufacturers have no guarantee of the content beside which their ads are placed, making it extremely unlikely that the ads are targeting an in-market customer.
So the question here is: are these practices ethical or even an effective strategies for the car companies? Our position is that it is neither.
To backtrack slightly, the environment that led auto manufacturers to use efficiency networks was primarily created by two drivers: first, the crushing pressure from the perfect economic storm currently hitting the automobile industry; and, second, ad agencies who measure digital campaigns on a cost-per-action metric.
While the emergence of these tactics has been frustrating to in-market publishers, it is a great catalyst for third-party auto sites and efficiency ad networks alike to take the necessary actions to preserve our industry. Following are some points worth discussing:
- Third-party auto sites using efficiency networks to reach non-endemic markets are at significant risk of cannibalizing the in-market value of their audience. This we know with 100 percent certainty. The question then becomes this: how do you want your audience and your brand marketed?
- For third party auto sites, if this trend continues, this would likely mean a 75 – 90 percent cut in revenue, given the disparity in sell through and rate as advertisers would more likely take the revenue stream from ad networks in lieu of a direct sales channel.
- Auto sites and the ad agencies must accelerate their efforts to find a common language and standard to measure the value of an engaged, in-market audience. The notion that the only way to measure campaign effectiveness is on an opaque, back end cost-per-action basis is outmoded and inefficient.
- This should be an opportunity for all parties to work together with the IAB to laydown standards to help protect all parties – but specifically the third-party auto sites - from this type of audience poaching.
- Automobile manufacturers and their agents must realize that using the services of efficiency ad networks that are surreptitiously pixeling third-party sites is just bad business. The premier third-party auto sites will absolutely survive the current economic storm, and this can be a time to either forge great and valuable partnerships or tear them down. The leading publishers are ready and willing to work with auto companies to deliver creative and powerful solutions but this cannot be accomplished if our valuable market continues to be diluted by efficiency ad networks.
Creativity in promoting the growth of automobile sales will be accomplished through creativity, not through poaching. There is so much potential; ultimately it might take the form of extending better credit terms, making rates variable and available to a wider swath of consumers and innovating to better connect a car-buying audience with car manufacturers via stronger messaging, better ad unit functionality, and increased integration of marketer and publisher content. The possibilities are endless, but only if ads are focused to an in-market audience.
Personally, I am proud of the company I keep, of the people who run the car manufacturers, the agencies they employ, and our fellow third party auto sites. That is why I am confident that the ideas to innovate through the current crisis will yield far greater benefit than reducing the cost per click for the next six months.
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