Several posts on automotive digital marketing forums have asked the question, "Pandora, Yes or No?" At String we analyze millions of traffic combinations through the power of our predictive analytics platform. Based on the conversions that we see inside the String Dealer Positioning System, our answer is, not surprisingly, "It depends."
As this post will focus on evaluating the decision of the dealership to add or expand their budget with Pandora, based on the "opportunity" in their market, we will need more than just one data set to find our answer. We will be calling on data sets from Google Analytics*, the dealer's sales data, registration data and lastly, the lifestyle categories (demographic and psychographic data) of specific households who registered a specific model.
This will be the first entry in a series of blog posts analyzing advertising decisions in the automotive marketing. If you are curious how effective a particular advertising choice is for your market, pose your question in the comments below. We will include your suggestions in future posts and follow up with a detailed market report for your specific challenge.
String DPS Dealership/Case Study Insight:
BMW Dealership in South Florida, new Pandora advertiser:
Step 1: Gather the research and Set a Goal
As with any reach medium, a spray and pray approach is never going to be as effective as an advertising plan with a strategy behind it. Dealership A did their research and knew ahead of time that they had specific opportunities to grow share of a certain model in the zip codes near their store.
Goal: Increase 3 Series Sales by 30% or more in the most valuable zip codes for our location.
Step 2: target Your audience based on the model you are promoting
Pandora's audience can be segmented and targeted based on lifestyle categories. Know the #1, #2, and #3 lifestyle categories for the households who have recently purchased the model you need to promote. (If your local media representatives and/or the Pandora rep cannot provide you with this information, reach out to String, we can provide you the specific lifestyle categories you should be targeting.)
Step 3: Target only Zip Codes where the most opportunity exists for that model
With any reach medium, it can be tempting to cast a wide net. However, it is wise to consider your current saturation of the zip codes near your store. Pandora allows you to target users who have a household or residence within a specific zip code. As a bonus, your advertising follows them wherever they commute, travel, or wander. Target the users who reside near your store and skew your message to specific model's lifestyle category. If your dealership owns 80% or more of sales for a specific model in a specific zip code, consider skipping the zip code for one with more opportunity. By overlaying the local registration data with your own sales data you will find the areas of your market (inside specifically your primary market area, or area of responsibility) or outside your core zip codes where you have the most opportunity to move that model. For more on model specific targeting, reference String's eBook, Five Ways to Move that Model.
Step 4: tag, Analyze and Repeat
As with any targeted advertising campaign, your ability to analyze the effectiveness of the campaign is based completely on your ability to track and measure several different key metrics. Have your links properly tagged. Look for lift in referral traffic relative to the overall traffic patterns you've been watching in Google Analytics.
For the purposes of this case study we are going to throw around a few statistics as a baseline. "Visitors" are categorized as any session that originated as a Pandora referral and landed on a specific landing page. "Conversion" is (as determined by the dealership, a visit to a map and directions page, a mobile click to call, and any form completion on the dealership web site). As you can see below, the campaign resulted in 574 sessions, a conversion rate of 2.6%, just above average for all types of campaigns, but well above average for a reach driven medium. The combination of traffic had a low bounce rate of 17.4%. It is crucially important to note that this dealer landed the traffic on a model specific landing page.
- Comparatively, referral traffic from BMWusa.com landing on the dealers home page had a slightly lower conversion rate, a lower bounce rate, and, admittedly a much higher inventory engagement rate. This underscores the difference between a reach-driven medium and the behavior of an in-market visitor.
Pandora referral traffic targeting a specific model and a specific geography yielded a 2.6% conversion rate and a low 17.4% bounce rate. Because the traffic was tagged correctly through Google Tag Manager, there was a direct correlation between the launch of the campaign and a spike in the combination of referral traffic landing on a model specific landing page.
Step 5: Wrapping Up
Most importantly, the dealership achieved the goal it set forth for the advertising. They increased 3 Series sales by 7 units or 33%. These increases occurred in battleground zip codes near their store.
Taking into consideration only the model specific goal, the cost per copy (estimated budget $5,000 per campaign) would be $714.29. However, the brand awareness from any reach medium campaign has a spill over effect, so watch for increases in direct and branded traffic over time.
But, you did say, "it depends"
Well, yes, every dealership, every model and every market is different. That is why it is crucial that you are utilizing a platform like the String Dealer Positioning System to help you target your audience and track the effectiveness of your campaigns.
As we mentioned, Step 1, gathering your research is key. There are many lifestyle categories and they vary greatly from dealership to dealership.
As an example. Following is a BMW dealership in a different market (New York, DMA). You'll notice there are three completely different lifestyle categories for the 3-Series registrant in this market, Steadfast Conventionalists (the lifestyle category used to model the South Florida dealer's campaign) does not appear in the top 3 at all.
Also of note, this dealer's prospect households are more spread out and have a higher propensity to consume media in three ways, Online Video, Online Display and Traditional Television.
When dealers are allocating new car budgets, there is a certain element of "reach" to be considered in the media mix. Pandora is a reach medium. Because it is a medium powered by technology and not a location on the AM/FM dial, Pandora also happens to have significant advantages in targeting a specific prospect. Pandora users from desktop and mobile logins have the option to interact with your advertising, so some portions of the Pandora audience are trackable. Just remember these few tips as you execute on your first campaign.
- Taking a "spray and pray" approach to any advertising campaign has a high propensity for waste - employ a strategy
- The reported metrics associated with any reach medium can be highly inflated when viewing vendor provided reporting
- It is important to have the proper tagging in place in order to gauge quantity and quality of the traffic
- Have the necessary steps in place to measure the quantitative and qualitative engagement level of the audience
- Set a specific goal, tie your goal to an increase in specific zip codes and specific models, if possible
- Don't rely soley on Google Analytics*. Utilize sales data to gauge a true ROI for every campaign
Before you consider whether or not a medium is something to just "try out", vet out the data you are reviewing as you make your decision, request a free "backyard report" from String. We can help make your decision a data-driven decision.
Lastly, be cautious in listening to success metrics from the vendor, other dealers, and/or advertising agencies with outdated research. Every market is different and dollars are easy to waste.
We have never received a commission from Pandora for selling their advertising services. But, we are impressed with a handful of their representatives who overdeliver for their dealerships by working with the data sets in our platform to better optimize the dealerships' successes. Kudos to you in particular, Kelly Byrnes, great job helping our dealers in South Florida.
*Note: As the industry's only Google Analytics Certified Partner, we are definitely big, big fans of Google Analytics. We dig into the power of Google Analytics to help sort through layers and layers of relevant web traffic, conversions, events, goals, and most valuable segments. We simply like to take GA further by applying industry specific research and additional data sets which are proprietary to a dealership.
Need some motivation to better utilize Google Analytics for your dealership? Be sure to read our blog post on finding your most valued visitors. Also, check out these "How-To" examples from the String blog: