CDK's purchase of Auto/Mate may create a major disruption in the dealer management system (DMS) industry. Here is our take. DOWNLOAD
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.