The New Autos Attraction: Is Buying ‘Audience’…Also Buying ‘Buyers’?

[The following is part of a continuing stream in the MindOnMedia[Sales] ‘Keep it Real’ Sales Series. In it, we ask the questions we see no one else asking, without necessarily taking sides on any one position.]

Earlier this year, we at MoM[S] took a decidedly more measured tone than many on the emergence/importance of DSPs and the entire ‘Auction’ process, in a ClickZ article by Hollis Thomases. I am afraid that I may also be doing that here, distilling our views down further, into an area I have long specialized in: Autos advertising.

I will state here, as I did on ClickZ, that the shiny new area of buying audiences through auction-based bidding, does address PART of the advertising equation. It does not, in any way, address the ENTIRE equation, as I see in far too many cases being made, that this is so.

To start with, what IS the value of the new levels of targeting [& efficiency] for Autos ‘In-Market Buyers’? Reaching these buyers after all, IS the holy grail for OEMs, DAs and Tier III dealers alike. And they are all in turn being chased by these new targeting systems/services that are being proferred out there.

In following, all those new systems/services are in turn using oceans worth of ‘quant’-style mathematics & algorithms that were first seen on Wall Street with Muni bonds back in the ’90s, to imply some kind of amazing superiority. While that sounds good, where can that also lead? [Just look at LTCM for an idea of just how “successful” that venture was.]

Sure, from my days on the ‘Endemic’ side of online Autos advertising, the CPMs and overall cost structures for many online ad programs seem to be coming down in a lot of cases.

But…what? What am I getting at? Are more cars being sold? Um, no; not since 2008, really. Are ad budgets from the OEMs coming down? Not the last time I checked. And note this is going on concurrently at the exact same time as these new “efficient” products [DSPs, RTB, auctioning] started to gain traction, ironically enough.

So: This means that more & more “efficient” ads are being bought [with more & more placed in front of that “targeted audience”] for lower cost-per-unit than perhaps at any time in history.

Great…but is this “effective”? Is anybody even asking that question? Is getting more & more targeted ads, in front of an ever-more targeted audience, even at a lower cost-per-unit, actually making a difference?

Maybe. But what it can also mean, is that behind the breathless hype about RTB being a be-all/end-all savior, the question of “efficiencies” has been distilled down to a very narrow set of parameters, and a lot of people have done a very good job of getting everybody else to focus on just that isolated, suspended point in the air.

[Note: I saw one beloved fellow who sat on a stage, and told an entire audience they were ‘idiots’ for not using what basically was the very service HIS company was selling. Nice guy. Misguided I would say, but very lovable. Kidding.]

I would argue that by taking the judgement part out of the equation [exactly as what happened at LTCM, it should be noted…], that maybe now you have LESS efficacy, rather than more.

Now despite this, like with WalMart, merely weeding the costs out may end up all that matters here, rendering my argument here totally void. That could happen, and the market will decide that.

In the end, you still have a very simple equation, which seems to be lost in the shuffle right now: Telling a story about your car, talking about good reasons [you – whoever that may be] should want to buy it, trying to draw interest from the person who might be engaged with the message, and then telling everyone how/where to buy it.

To reverse the question [something that I do quite often, you may have noticed by now]: has the Advertising/Cost per Vehicle ratio changed? Last time I saw…not really. It seems to be between the same $400-1,000 per vehicle range – depending on your market area – that it’s been in now, for quite some time.

Now, none of this is to say that the new ‘Bidding’, DSP or RTB processes are inherently bad. But sorry…as of now, they have little or NO context. None.

And worse, the Ad agencies that really SHOULD be both creating that context AND advising their clients on just what that framework/context actually is, aren’t really doing it. Not that I see. And even if a few are, it is entirely lost in the breathless hype out there right now.

So now OK, let’s not forget about our friends out there who are fortunate enough to have rising CPMs over the last few years [thru the RTB process or otherwise.] Isn’t that actually a worse scenario? With total vehicle sales Y/Y dropping from 17M down to 10.5 or 11M or so, have you provided more value here?

All of this new quant- or hyper-targeting then, is really just an after-the-fact analysis, writ large. It is BT 2.0 as far as I’m concerned. Not really that interesting gang; hate to break the news to you.

No, what WOULD be interesting? If that hyper-targeting wasn’t reactive…but pro-active. Being able to identify and actually influence people who maybe weren’t even thinking or interested in buying a car…into buying a car. THAT would be something.

Pay attention to what I’m saying here, as currently I myself work with a firm that offers Auction/RTB offerings. This is about starting a dialogue on a framework for whats really being offered out there for sale…and what’s actually being bought.

I kind of look at this with a kind of ‘Great Equalizer’ viewpoint I guess: That is, as more ad “efficiency” is found, the harder it becomes to actually “reach”…and sway…that potential Autos buyer, merely because you hit them as a “target.”

It is paradoxical, and it just may be true. Just ask the geniuses doing basicaly the same thing at LTCM…or were doing it at LTCM, anyway.

Sorry, brilliant math/ad-serving/targeting guys. Advertising just ain’t that easy. And it never will be.


~ by MindOnMediaSales on July 17, 2011.

3 Responses to “The New Autos Attraction: Is Buying ‘Audience’…Also Buying ‘Buyers’?”

  1. Interesting that, in 2014…I found an article that in my mind, seems very close to what I was largely trying to get to in this post, at the time it was written. I can’t say whether its author, Uwe Hook, would agree with that assertion, but I like his work here enough to link to it.

    Very good reading –

  2. Great article by Rob Graham on a very similar wavelength, over on ClickZ. Nice to know my offerings here are not very far afield from people like Rob who also lecture at places like Harvard –

  3. Interesting to see, that just hours after this was published, comes this AutoNews article, about how Groupon bombed on its first New Car outing. This was something that was totally predictable, I might add –

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