On today’s show, we welcome back Jeff Brown, Chief Revenue Officer at Force Marketing. Jeff discussed the big takeaways from Digital Dealer and how to incorporate dynamic video into your dealership’s marketing strategy.
Jim Fitzpatrick: Hi everyone. Jim Fitzpatrick. Thanks so much for joining me on another edition of CBT News. I’m so happy to have back in the studio Mr. Jeff Brown, who is the Chief Revenue Officer at Force Marketing. Welcome back to the show, Jeff.
Jeff Brown: Thanks Jim. Glad to be back.
Jim Fitzpatrick: Sure. Last time you were in you were heading out to Digital Dealer.
Jeff Brown: Yes, indeed. It was a great trip.
Jim Fitzpatrick: Yeah. Talk to us about what was taking place out there? And then you were also hosting a panel which was the who’s who in Digital Marketing out there, with Google and Oracle and Facebook as well.
Jeff Brown: Yeah, we were at Digital Dealer in Vegas, which, as you know, happens every year. Lots of dealers, lots of vendors. Good keynote conversations and breakout sessions, and I was fortunate enough to get to moderate a really robust panel with Julio Gonzalez, the head of automotive for Google, speaking specifically on the opportunities with YouTube.
Jim Fitzpatrick: Wow, that is big.
Jeff Brown: Adam Pavkov from Facebook and everything that they have going on on their platform, and then Tim Dare from Oracle. So, we had a really meaningful, dynamic discussion with dealer involvement, and it was fun.
Jim Fitzpatrick: Yeah, that’s fantastic. So, what were some of the takeaways?
Jeff Brown: There were a lot, and let me break these down linearly between the three and I’ll start with YouTube. The biggest takeaway, I think, for the dealers, and you heard an “aha” moment out in the crowd, was the fact that YouTube reaches 92% of in-market shoppers. These are folks that have displayed, ready to buy behavior from about 30 different data ingested points.
Jim Fitzpatrick: Okay. 92%.
Jeff Brown: 92%.
Jim Fitzpatrick: Man.
Jeff Brown: Now, juxtapose that with this fact, which is really the key takeaway for YouTube. I asked Julio on stage, I said, “Julio, what percentage of dealers are doing a great job with the video strategy against this platform?”
Jim Fitzpatrick: Right.
Jeff Brown: Would you believe me if I told you that it was less than 3%?
Jim Fitzpatrick: Oh my gosh, talk about opportunity.
Jeff Brown: When we spoke last time, I mentioned a very real blue ocean opportunity, and a lot of times you hear people throw blue ocean around.
Jim Fitzpatrick: Yeah.
Jeff Brown: And it’s a buzzword, and it doesn’t really mean anything.
Jim Fitzpatrick: Sure.
Jeff Brown: But when you think about 92% of in-market shoppers anywhere, and only 3% of the dealers-
Jim Fitzpatrick: That’s a crime.
Jeff Brown: … deciding to talk to them, it’s a crime-
Jim Fitzpatrick: That’s crazy.
Jeff Brown: … but it’s also an opportunity. Let’s confess our sins, and let’s start selling cars on that platform because it’s meaningful. Another key point is, YouTube now has the opportunity to help track in-store visits. Their geo location opportunity allows us to now start to optimize the campaigns well past the click. So, now, we can start to optimize by cost per dealership arrival, and that’s a big deal. Specifically, when you think about the fact that a customer’s going to shop at 1.5 to 1.7 dealerships.
Jeff Brown: So, if we can start optimizing campaigns around allowing the dealer to get belly to belly with the customer, that’s a meaningful innovation out of that platform.
Jim Fitzpatrick: Yeah, that’s huge. That’s huge. I understand there’s a lot of discussion around OTT and CTV, while a digital dealer. Talk to us a little bit about that. How did you incorporate that into your presentation?
Jeff Brown: It’s interesting. If you looked at the program, it was probably 50% CTV and OTT-
Jim Fitzpatrick: Really?
Jeff Brown: It was. And while we see that as a huge opportunity, we also see a building block opportunity, first, around YouTube, as I mentioned, but then also Facebook. So, before I get into CTV and OTT, let me also circle back on some of the meaningful facts and meaningful takeaways for the dealers that came from Adam Pavkov from Facebook.
Jim Fitzpatrick: Sure, please do.
Jeff Brown: I mentioned YouTube reaching 92% of in-market audiences. Well, Facebook is reaching 87% of in-market audiences, and Facebook also has around 3% of dealers actively engaging a video strategy on the platform. So, now, we’ve got serial crimes-
Jim Fitzpatrick: Serial crimes.
Jeff Brown: … but we also have significant opportunities around those two channels. And as you think about other innovations with Facebook, the opportunities right now with Facebook Messenger are significant. There’s a stat that says, “58% of consumers are more comfortable communicating with the business in a Messenger-like capacity than they are in traditional phone calls, form fills, or chats.” So, as we think about Oracle, and if data is the new oil, which we’ve seen printed in the Wall Street Journal-
Jim Fitzpatrick: It is.
Jeff Brown: … then is marketing dialogue, is it the new gas? Is it the new gold? There’s also a huge buzzword out there right now around digital retailing with a lot of people trying to figure this out.
Jim Fitzpatrick: That’s right.
Jeff Brown: And Jim, going back to your original question around CTV and OTT, there’s a few key points that I think the dealers need to understand. And one is, CTV and OTT are no longer in a nascent period of streaming. Critical mass has now been reached, so it’s Tom for the dealers to put some critical attention to this opportunity as they hedge against their traditional budgets that they’re spending so that they know that they’re in position to reach the right audience at the right time. And as they think about buying this new opportunity, the people that buy OTT in a traditional mechanism will fall very, very short. The people that buy OTT with advanced data, that buy it from an omnichannel perspective, that understand that CPMs are not all created equal, and a personalized CPM that is data enriched, which may look a little more expensive than a linear CPM, is actually way more efficient. And we’re happy to have those conversations with dealers so they can understand how to best take their dollar further. Because we’re still talking about creating efficiencies and driving down CPU, but you can’t filter the conversation the way you did with broadcast television and that really cannot be understated.
Jim Fitzpatrick: Sure.
Jeff Brown: And then think about this, we go back to the YouTube, Facebook conversation. Right now, over half the audience is on CTV. So, you can’t… Let’s not take a, “Let me test this with 5% of the budget.” Look, the test is over.
Jim Fitzpatrick: Yeah, exactly.
Jeff Brown: Half the audience is there-
Jim Fitzpatrick: While you’re testing, other dealers are crushing you with it.
Jeff Brown: That’s exactly right. So, we’re well past the test. It’s execution time, and let’s move metal because that’s what we’re here to do.
Jim Fitzpatrick: That’s right.
Jeff Brown: And then, as we go back on CPM and how to buy, CTV makes the rating point, which is how traditional media has been transacted for years. CTV makes the rating point irrelevant. There’s no need for a rating when you have the facts, and in CTV and OTT, we’re only selling against a real aggregated audience, not an estimate. So, when you put data into that, it’s a winning strategy.
Jim Fitzpatrick: Well, dealers heard for so long, for the last 10 years at least, that, “Oh man, TV’s dead. Video’s dead. Commercials are dead. Everything needs to be in social and digital. Everything needs to be now on social and digital. If you’ve got a TV commercial put together for your dealership or a specific car or what have you, what are you doing, man? You got to be on Google and Facebook, and you got to be where the customer starts out.” But now, dealers are now hearing, “Oh wait a minute, hold that thought. You’ve got to come up with a commercial because we’ve got a place for you to air it now.” But it’s a much smarter place to air that commercial, right?
Jeff Brown: Yeah, that’s exactly right. And you hit on such a key point, Jim, that is creative and making sure that that creative is done right. Because the creative of yesterday was a one to many conversation, and when you’re building your creative strategy today, you’ve really got to talk to the customer in that one-on-one manner, in a lean-back environment, and you’ve got to be really conscious of how you’re having those discussions. And the more discussions like we’re having, that we’re having at the dealer level, I believe at some point in the near future, it’s going to reach critical mass because here’s what I know about automotive dealers. There’s smart, they’re cutting, they want to beat their competition, and as they understand that 90 plus percent of shoppers are anywhere and their competition is not, they’re-
Jim Fitzpatrick: They’re going.
Jeff Brown: … and they’ll get there fast. And here’s what we also know. If the guy across the street starts a great strategy like this against you, drops his CPU, increases his ad budget, starts changing what the market share reports look like. What do you think the other guy’s going to do?
Jim Fitzpatrick: He’s following suit.
Jeff Brown: And he’s going to do it at speed.
Jim Fitzpatrick: That’s right. The reason we wanted to bring you back in is because we didn’t touch too much on your product drive at Force Marketing, and that offers an automated dynamic video platform. Talk to us more about that because I think that’s going to be the differentiator here, right? If you’ve got a platform that’s going to help you with the creative car specific, that that’s a game changer for dealers.
Jeff Brown: Yeah, it is, Jim, and Julio Gonzalez really keyed in on one point during the panel. And he keyed on this even more than he did the fact that they reached 92% in market shoppers and only 3% are actively engaged on the platform with video. He talked about the need for automation in the dealership of today, in the dealership of tomorrow, and automation at scale so that you have an opportunity to create personalized experiences in real time across a massive audience. And if you are trying to hire somebody to do this in your dealership from a creative standpoint, you’d have 30 graphic artists-
Jim Fitzpatrick: I was going to say, there’s no way. It’s impossible.
Jeff Brown: … it’s impossible. It’s cost prohibitive, and it is impossible. One of the things that our drive product does through Helix is it personalizes this experience in real-time based on the down funnel search habits of the customer and most recent, and it then allows us to connect the right vehicle scraped from our technology from the dealer’s lot. And these are people who are actively on Edmunds, who are actively on KBB. These are not tire kickers. These are people with checkbook in hand, and then the ability, as I mentioned, to utilize OEM creative or really good creative that is brand-centric, creating an emotional connection, then married to the dynamic panel, which connects the car that they are looking at. And while the 30 second spot is playing, we’re able to move them through five [thens 00:10:41] that make sense based on what they are looking at, and the view through rates are double the traditional online video view through rates. On Google and Facebook, we’re seeing view through rates of 51, 52, 53%, that is massive. On CTV, that’s going up from there. On OTT, we’re seeing 90 plus percent. Now, OTT, you obviously can’t click in and go to the SRP, but through a lean-back experience as you see it, the car that you like, then you’re able to immediately jump on the site, take an action, and start to move yourself down the funnel.
Jim Fitzpatrick: Sure. Wow. That is extremely powerful. I mean-
Jeff Brown: It is.
Jim Fitzpatrick: … this is the differentiator out there or things like this for dealers because, to your point, they don’t have the manpower, they don’t have the energy to do that, but consumers want that personalized service. Right? I mean, that’s what it’s all about.
Jeff Brown: That’s exactly right. McKenzie put out a study about nine months ago that says that, “A customer is 51% more likely to switch brands when given a personalized marketing experience.”
Jim Fitzpatrick: Really? 51%?
Jeff Brown: 51%.
Jim Fitzpatrick: Wow.
Jeff Brown: The one to many conversation in automotive is so much less impactful then to one-to-one, and listen, I’m not here to tell you today that TV is dead. It’s not what I’m saying, but what I am saying is, in automotive, that the hierarchy has changed. And it’s no longer a TV strategy. I mentioned this last time. It is absolutely a video strategy where you’re starting with in-market foundational, Facebook, YouTube, the programmatic. Then you’re moving into CTV, then you’re moving into OTT, and if you’re going to have a brand conversation, and you still have some gunpowder left, television still works great to start to build that emotional connection, but the problem, Jim, is a lot of dealers are using television to reach an in-market audience. There’s never any more than 2% of any market in the market for a car-
Jim Fitzpatrick: You’re taking a shotgun approach when it really needs a sniper’s rifle, and it’s not going to work.
Jeff Brown: Well, that’s exactly right. And then, add to that, the dealers are generally banging them on the head with price, which is the wrong creative for the medium, so they’re actually training a non-in-market buyer to become a price buyer when they are ready instead of branding that I’ve got the best services.
Jim Fitzpatrick: And then as dealers we complain that our margins are suffering terribly. Share with us if you can, Jeff, a specific case as it relates to drive. I mean, you guys are doing such great work, but do you have like some specifics where you’ve got a case study that you can share with us?
Jeff Brown: Sure. Let’s think about Nissan, and I want to share a Nissan dealer with you in Phoenix, Arizona. And then, let’s also think bigger picture. Nissan has new leadership at the top. They’re looking to really take that brand to its heights, to places that it’s been before. They certainly can do that. They’re looking for 10% market share across the board, so they’ve got high expectations at the OEM level and then, also, at the retail level. So, we had a great opportunity with Phoenix Nissan in order to help them figure out how can they take their ad dollar further and also increase market share because anything that’s not increasing market share, is not in the conversation. And let me just give you a few facts. They were spending $100,000 a month in traditional.
Jim Fitzpatrick: Okay, wow. That’s a lot of money is traditional.
Jeff Brown: That is a lot of money. Big market, spending a lot. We told them, “Take $75,000 and let’s put it to the bottom line, and let’s do that for four months. Let’s take $25,000, and let’s get really smart around the audience. Let’s be really smart around the channels that we deploy, Facebook, YouTube, programmatic, all of the things that we’ve been talking about.”
Jim Fitzpatrick: For 25,000?
Jeff Brown: For $25,000. Now-
Jim Fitzpatrick: The other 75 grand to the bottom [inaudible 00:00:14:39].
Jeff Brown: … the other 75, you got it in your pocket.
Jim Fitzpatrick: You’re asking that dealer to drop his a firstborn son from the 12th story window, and you’re going to catch it.
Jeff Brown: And we have to catch it.
Jim Fitzpatrick: And you have to catch it.
Jeff Brown: You don’t catch that, you don’t come back from that.
Jim Fitzpatrick: That’s right.
Jeff Brown: Right? So, we were confident enough in what we had seen in previous use cases leading into this. So, here are the facts on what happened in that campaign. They ended up with a 4% increase in their new car market share, and this dealer is already top 10, so when $75,000 goes to the bottom line, you then start to think about CPU cost per acquisition. Then you start to thinking about, “Okay, now I’ve got additional gunpowder here. Do I keep that to the bottom line? Or do I now start to deploy that in other areas?” It could be marketing. It could be for a great GM getting a raise, a seller spiff-
Jim Fitzpatrick: For the dealers that will listen and they go, “No, keep it at the bottom line.”
Jeff Brown: Yeah, exactly. And no-
Jim Fitzpatrick: We don’t need to give that away. We’re already having a tough time making money in our dealership, so let’s not give it away, but I hear what you’re saying.
Jeff Brown: Absolutely. I get that, and I respect that. And that’s, obviously, their choice. We support whatever they decide. But look, what they did is what we’re trying to get the dealers to understand. While this sounds-
Jim Fitzpatrick: But you’ve got their attention now, if you’re cutting ad budgets by 75% and increasing volume. So, let’s change gears here a little bit. Discuss your presence at the upcoming J.D. Power Auto Revolution Conference.
Jeff Brown: Yeah, we’re excited to be out at that conference. On that panel, I, again, have Tim Derr from Oracle. I also have Andre Swanston, who is the CEO for True Optic and a real expert in the space around what’s going on with CTV and OTT and the opportunities as he sees those. I also have Tim Mueller from Facebook, and then my partner in crime, Cody Tomczyk, Vice President at Force Marketing. And we’ll be having a very similar panel as we had at Digital Dealer. The content’s going to change up a little bit, but it’ll be the same conversation. And, as you know, the J.D. Power events are all fantastically run.
Jim Fitzpatrick: First class, yeah.
Jeff Brown: They’re the best of the best, and we’re really excited to be there.
Jim Fitzpatrick: Yeah, that’s fantastic. Well, Jeff Brown, Chief Revenue Officer at Force Marketing, I want to thank you for coming back in to clear this up and share with us what took place at Digital Dealer, and congratulations on a successful panel that you had out there with Google, Facebook, and Oracle. It doesn’t get any bigger than that in this business, right?
Jeff Brown: It was great. I was lucky to be on a panel with people a lot smarter than I am.
Jim Fitzpatrick: Well, I don’t know, you just threw around a bunch of information there that dealers are probably going to be reaching out to you for to say, “Okay, help me figure all of this out because it sounds very exciting.” But for dealers that are out there that aren’t as familiar with these terms and this approach, as the guys at Force Marketing, give Jeff a call, and he’ll navigate and help you through it. Right?
Jeff Brown: I’ll await the call with bated breath.
Jim Fitzpatrick: Thanks so much.
Jeff Brown: Jim, thank you.
CBT Automotive Network. The number one most-watched network in retail automotive. This has been a JBF Business Media production.