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Lindsey Auguste

Lindsey Auguste Business Intelligence Specialist

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The Impact of Social Media on Car Purchasing: What Does the Data Really Tell Us?

There is huge debate in our industry regarding how influential social media really is in the car purchase cycle.  Some venture to say that social media is the new way to sell cars, while others still think social media – and the Internet, for that matter – is just a fad.  It’s times like these when we turn to the data to see what the true reach of this new platform is, but even there, we find conflicting information.  At the 2011 DrivingSales Executive Summit, Dealer.com presented their study on social media:  The Rise of Loyalty, Advocacy, & Influence: Social Media and the New Automotive Purchase Cycle, positively demonstrating the reach and influence of social media in the car buying process.  The research paper leaves you feeling energized about the possibility of social media and eager to dive deeper into the platform and potential opportunities.  However, at the NADA Convention a month ago, AutoTrader.com shared with us their social media study, the Morpace/AutoTrader.com 2012 Digital Shopping Dynamics.  Their evidence prominently indicated that people are hardly (if at all) using social websites to gather information about cars, leaving us ready to abandon our Facebook accounts.

So who is right and who is wrong?  If both conclusions are based on real data, how can they be so inconclusive?  To be clear, neither company or research project is lying to you, but to gain an understanding of what is really going on, we need to take a deeper look at both sets of data together.

What's the Question?

The conclusions drawn from each set of data are correct, but the real difference lies in the question each is attempting to answer.  The Dealer.com study is looking more at the influence of social media on the car shopping process.  They ask questions related to seeing and interacting with other people’s posts and how it impacts their consideration of certain vehicles and dealerships.  The AutoTrader study, conversely, is seeking to define how many people use social media to actually purchase cars. Those are two very different questions and two very different parts of the purchase cycle, so it makes sense why they would result in such drastically different answers. 

Admittedly, social media plays less of a role in the transactional realm of buying a car, as AutoTrader describes.  For one, people haven’t fully embraced social media as a resource for purchases.  It’s still very much a conversation platform, which is why it works so well in the consideration stage, when people are sharing and discussing their recent or future car buying experiences.  Secondly, the automotive industry itself doesn’t fully understand the social media channel, nor have they decided how they are going to use it.  It’d be interesting to know how many dealers are posting their inventory on social media platforms.  If what we guess to be only a small minority of dealers are posting their inventory on Facebook, for example, it makes perfect sense why people aren’t using it as a purchasing tool – the information isn’t there!  Social media is a two-way street and if dealers aren’t talking on their side, there’s no conversation to be made. 

Push vs. Pull

Of course, posting inventory on Facebook is a very different approach to social media compared to generating conversation around a brand, which is where I think social media is best situated.  It falls in line with pull marketing, where people are seeking out your information and pulling it toward them.  This is the premise that the Dealer.com study is based on:  People are going online to pull information from their friends and family about their car buying experience.  This is in direct contrast to push marketing, where companies are pushing out their communications to an audience in attempt to feed consumers information about their brand.  Push marketing is much a like a TV commercial.  It’s disruptive and pushes the content on to the audience. 

How and Where It Influences

So in reality, when both studies claim to know the truth about how social media interacts in the car buying purchase, they are both right.  But differentiating how it interacts during which part of the purchase cycle, and defining the appropriate approach to social media, all impact the framing of the information and the “truth.”  At some level, social media does influence the automotive purchase cycle.  To say that it doesn’t would be like saying the TV only affects the car purchase cycle when people go into the Vehix section on the TV and buy a car.  But, what about all the ads?  Has the industry been pushing that marketing in vain for all these decades? Just because it’s not transactional on the spot, doesn’t mean it’s not effective.  But is social media the number one influencer throughout the entirety of the car purchase cycle?  Not at this point. 

As the platform changes and people learn how to interact with the channel better, the influence will change, as will the data.  It’s important to know what you’re looking at and fully understand the context of the data before you take someone’s statistics as truth.

Chris Costner
Great analysis of both studies Lindsey. They are both very valid perspectives. I will venture to say that social will never take over traditional search and third-party expert reviews for the consumer unless we as our brand representatives start directly engaging more with our consumers in these various platforms. Once engaged, I see it as nothing different as being on the telephone or live chat from our website. It is an extension but the question is who is going to say hello to whom first? I see it as sitting on a park bench next to a stranger and I notice a VW key hanging off of their backpack. I could sit there and wonder what type of VW they drive, never say a word and ten minutes later we part ways. Or, I could engage in conversation without being promotional and ten minutes later find out they have been shopping for two weeks for their next vehicle and just haven’t made the move yet. Having a genuine conversation about their needs can leave a positive impression about your brand and you. More than likely they will spread the word and value the information you gave them as a brand representative and just maybe take some sort of action by visiting your marketplace or maybe even purchasing. There are certainly many variables that many may want to measure to prove the true ROI of social but I am not convinced it should be this complicated. It also makes me think of an article you wrote shortly after NADA regarding "getting out of what you put in." I am curious to hear what others think. Great read Lindsey as always. Thank you.
Lindsey Auguste
Thanks for your feedback, Chris. You are absolutely right. The effectiveness of social media depends on what you're using it for and how you are measuring it's success. When you put it on par with the other tools you use in the overall strategy, its production is a function of the effort you put into it. Great tie in!
Mathew Thomas
Social Media should not be used for direct selling. Look at the key word "SOCIAL". Dealers should use this media to expose their "social" status. In other words, social media is all about the reputation. So this medium is to be used for INDIRECT selling via the exposed reputation of the dealer. Plastering an ad or inventory on Facebook WILL TURN PEOPLE AWAY! If the dealer decides to go public on Facebook, Twitter, etc, and wants to be successful with it, the dealer must protect its reputation by focusing on customer excellence and satisfaction as its #1 priority. When the dealer takes care of its customer, the customer would share their experience on social media (dealer should encourage and/or give incentives to share their experience). The customer has just now helped the dealer to build their reputation by sharing their positive comments to all of the customer's friends PLUS the fans on the dealer page. THIS is how a dealer can sell more cars in the 21st century.
Jeff Scherer
Lindsey- excellent article. We find that many OEMs and dealers see social as the new shiny object, but really do not understand how to apply, manage, leverage, and infuse it into their marketing mix. Everyday we see articles on "do's and dont's" in social media marketing but I am not sure any of us really have a complete grasp on this. (I equate it to a water balloon- you grip it here, and it squeezes out somewhere else). We have also seen a shift in the mentality from some OEMs believing that social is the answer to their shredded marketing budgets due to its low/no cost. What they are ultimately finding out is that it is not the replacement for lead gen sources that they had previously utilized. Also, one comment from the "dont's" camp: too many companies make the mistake of trying to 'sell' their stuff via their Facebook sites, as an example, and are also getting underwhelming results. One analyst maybe said it best, stating "There was a lot of anticipation that Facebook would turn into a new destination, a store, a place where people would shop, but it was like trying to sell stuff to people while they’re hanging out with their friends at the bar.” 'nuff said.
Eric Miltsch
Great article Lindsey - very thorough. Now that I'm in the market to buy a car for the first time in 6 years, I can say that social media has made an impact on influencing the brands - which I in turn - begin researching online. Word of mouth has been important for me - I asked a good friend how the experience was at a local dealership where she purchased from. SM may influence at some point of the buying process, but as for research, I didn't open up Facebook to begin searching anything about a specific vehicle. I did however spend some time on an amazing automotive blog that offered a ton a great comparison information between the models I was considering. To be fair, I may not be considered the average shopper as well. I've often wondered what the same process may look like through the eyes of shoppers who are not active on Facebook & other SM sites. The obvious answer is that they're simply missing out on the social recommendations. (Which for many - is very important these days, plus its so easy to get)

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