The need for an automotive specific analytics tool
Media Monitors is a proven and powerful tool for sales lead generation and advertising analytics for about 250 industry categories, from ad spend heavy categories like automotive and pharmaceuticals to niche ones like floor coverings and equestrian services. While the data is broad it does not go deep enough to analyze the granular details of the message within the advertisement. We understand that certain categories, especially those that are highly competitive and with high ad spend, need greater granularity, or depth, to truly tease out insights from the thousands of ads aired on a daily basis in these categories. After an analysis of the top ten categories based on ad spend, and a number of other factors, we arrived at the conclusion that the automotive category would be the best to create a product with deeper granularity. The product, MM Insights Automotive, was thus launched in early 2016.
For a specialized product serving the needs of a single category it is, of course, important to understand the industry metrics that are useful for marketing professionals in that industry. In the automotive category the major metrics include (in addition to occurrence and spend), funding source, message type, incentive details, creative attributes, and campaign. Funding source identifies who likely sponsored the ad; factory (OEM), dealer association, or the local dealer. Message type indicates if the message was promoting the brand/product or retail incentive offers (if the ad contains financial incentives it is classified as retail). Incentive details capture the actual incentives offered in a retail ad, i.e. the cash back, APR, lease term, monthly down, and payment due at signing. Creative attributes capture the main idea the ad is communicating to the consumer. Keywords such as “technology”, “safety” “adventure”, etc. are examples of creative attributes. Last but not least campaign captures the campaign names such as Memorial Day, July 4th, Model Year Clearance, etc. sales events.
With these data captured for every ad aired on radio, broadcast TV, and cable TV in markets we monitor (top 85 for radio, top 61 for television) we have a rich data set available through four interactive reports in MM Insights Automotive. Using these reports you can extract many powerful competitive insights. For instance, trends over a quarter, month, or a time period of your choice, or the lease vs. purchase ratio during a holiday campaign for multiple brands and models, and the creative attributes used in messaging are examples of insights that can be extracted.
I used data from these four report types to create a framework and using the framework tested three real life cases to find the kind of insights that would surface. The framework looked at analyzing data in six dimensions, namely:
- Ad Spend
- Media Mix
Product Analysis: The framework can be used to analyze the strengths and weaknesses of an advertising strategy for an advertiser. For any given analysis the first step in the framework is to determine if the strength of the brand/product. If the brand is strong i.e. high brand awareness, favorability, reputation, etc., for the brand we are conducting the analysis for, then we can safely rule that the strength or weakness of the advertising strategy is not directly due to the brand or product. For example, if we are analyzing the poor sales performance of Brand A, and we find from a product analysis that brand strength is high then we can assume that poor sales is not due to a poor product, but perhaps it is a marketing and communications issue.
Message Analysis: There are two parts to message analysis. The first part determines the ratio of number of occurrences of creative aired with a brand message to the number of occurrences of creative aired with a retail message. This ratio can be used to (a) determine if the brand’s desired goal is consistent with the actual messages that are being aired in the market, and (b) determine if the ratio is in line with its main competitors.
The second part is to analyze the creative attributes used in the message. For example, factory may be trying to improve brand strength with new technologies in a model refresh, but the creative it airs are focused more on retail offers, which may be diluting the intended brand strengthening message.
Ad Spend: Spend analysis comprises two parts. The first looks at overall spend levels for the competitive set to determine if the brand’s spending is proportional to its targeted sales goal in comparison to its competitors. The second part compares the spend levels of the three funding sources (factory, dealer association, local dealers). Generally speaking, the strategy is for factory to take on the onus of brand messaging while dealer associations and local dealers are responsible for retail messaging, as their goal is to incentivize customers to a purchase or a lease.
Campaign Analysis: Major US holidays – Memorial Day, Summer/July 4th, Labor Day, and the November/December Holiday season – are major sales events for the automotive industry. It is therefore important to measure a brand’s advertising activity during these holidays (unless if the brand in question is in the high luxury segment like a Bentley). In addition, other campaigns of significant activity should also be analyzed.
Media Mix Analysis: Advertising levels for each media types of a brand and its competitors will reveal If one media type has higher or lower share of voice than expected and how that compares to the competition. Now, it may be that an advertiser has deliberately increased the share of one media type at the expense of another. However, when the media mix is compared with the competition’s there may be reason to recalibrate the mix, or conversely, double down on the existing strategy.
We conducted three case studies to evaluate if useful insights would surface by using this framework. Two of these studies were inspired from articles reported in automotive trade journals and the third one was requested by Automotive News, a leading trade journal, after presenting the results from the first study.
In all the studies our primary data source was MM Insights Automotive. Data from third party sources available on the public domain was also used. In this paper, only the insights drawn from the studies are presented. The full analyses of each study may be presented in future papers.
Case Study #1: What’ Hurting Mazda3 sales?
It was reported in the April 1, 2016 issue of Automotive News that Mazda3 was experiencing a sales decline of 31% and facing stiff competition from Honda Civic and Hyundai Elantra. Using the framework the data revealed the following insights:
- Mazda’s “Driving Matters” campaign to change perception of its products was not consistent with the creative used for “Driving Matters” was meant to communicate the safety, technology, beauty, and efficiency of Mazda’s products but Its advertising messages were more retail heavy and less on promoting the stated product attributes.
- Mazda3 did not get sufficient dealer association Its competitors, Honda Civic and Hyundai Elantra, got significant support from their dealer associations.
- Mazda3 barely got any advertising lift during major holiday seasons when most brands heavy up on In fact, in several markets Mazda3 ads did not even air.
The graph below captures and clearly shows Mazda3’s campaign blunted by its main competitors during the major holiday campaigns.
Case Study #2: Volkswagen’s Advertising Strategy during the Emissions Scandal
In 2015, the Environmental Protection Agency discovered that about half a million Volkswagen vehicles in the US had a defeat device to pass US emissions standards during testing, but when not in testing it emitted up to 40 times the allowed amount of nitrogen oxide. In 2016 Volkswagen agreed to a $14.7 billion settlement with the EPA.
We examined the data, on request from Automotive News, to understand what Volkswagen’s advertising strategy was during the scandal and were surprised to find that there was little impact to vehicle sales. Using MM Insights Automotive data, sales figures from publicly available data, and the framework, we were able to draw the following insights.
- Volkswagen took a bet on doubling down on their brand strength during the scandal, increasing advertising activity every month after the scandal broke and peaking at almost 300% more than when the scandal
- They consistently stayed focused on messages of technology, performance, and safety during this
- Their strategy appears to have been to protect brand reputation, despite the scandal, by not immediately discounting pricing
- For the most part factory stepped up to the plate to fund increased advertising activity
The figure below shows Volkswagen’s communication stayed on product attributes (brand messaging) instead of messages offering discounts (retail messaging) to counter negative impact on their brand reputation due to the scandal. During the peak of the scandal, between Dec. 2015 and Jun. 2015, their message focused primarily on technology, torque, safety. The strategy appears to have been to stick to the perception of the strength of German engineering, instead of making apologies for cheating.
Case Study #3: BMW’s Identity Crisis
The inspiration for this analysis was a cover article of the August 2017 issue of WardsAuto. According to the article while luxury brands are growing in the US market, BMW showed a precipitous drop in sales. Dealers complained about weak and inconsistent marketing messages and conservative styling of BMW’s products. This study we conducted was similar to the Mazda3 study except here, we also wanted to examine if the claim of conservative styling was an issue.
The insights that surfaced from the study revealed that:
- BMW’s advertising message was inconsistent with its brand perception. While BMW products enjoyed strong brand reputation, judging by the number of awards they have won, their advertising messages promoted more retail
- BMW barely got any advertising lift during major holiday seasons when most brands heavy up with their advertising
- BMW did not provide sufficient factory funding support, while competitors Audi, Lexus, and Mercedes-Benz provided significantly more for their Brand messaging is normally the responsibility of the factory, and BMW failed in providing the necessary funding. (See figure below.)