Social Media Influence is Driving Auto Sales

Auto sales have been on a steady growth spurt since the lowest point of the Great Recession. After having booked record low sales in 2009 of just 10.4 million, buyers have gradually re-entered the market. Sales from 2010 to 2013 have grown by more than one million year-over-year in the interim, and in 2013, the industry saw its best year since 2007, selling about 15.6 million vehicles.

So, what’s driving the trend? By some market indicators, it seems that auto sales shouldn’t be breaking any records. Manufacturers, for one, are having trouble reaching Millenials, who largely shun the financial burden of car ownership. Many do so in favor of ride-sharing apps like Uber, Lyft and Zipcar — and the same group regularly chooses electronics over car keys. Rick Newman at The Exchange says the number of people age 16 to 24 who have a driver’s license has fallen below 70 percent for the first time since 1963.

Carmakers that charted the best sales last year are the ones actively engaging potential customers online. Manufacturers like Toyota, Ford and Volkswagen have employed full-scale digital campaigns that go beyond the traditional website; reaching consumers at multiple touch points via mobile, online video and social media.

L2 Think Tank, a New York-based organization that measures the digital competence of consumer brands, has ranked 42 automakers by delineating how each is engaging consumers in the digital space. Measuring each brand by its use of key tools like interactive websites and bold e-marketing campaigns, brand awareness, SEO/SEM, social media engagement and mobile optimization, L2 has compiled a definitive hierarchy of manufacturers that are winning in the digital landscape, and those that are barely keeping up.

In L2’s Digital IQ Index: Auto 2014, Mercedes tops the list of automakers going full-bore with digital advertising. As such, the Stuttgart-based carmaker earns L2’s “genius” status for Mercedes’ wall-to-wall approach to this type of marketing.

It’s interesting to note that third-place Mercedes narrowed its worldwide sales gap between second-place Audi last year. But, in the US, Mercedes beat all of its direct competitors: BMW, Audi, Lexus, Porsche and Cadillac. It’s also compelling that Mercedes did it largely with its new compact and subcompact offerings, the $29,900 CLA-Class:

and the B-Class Electric Drive, both of which are built to appeal to younger buyers.

Those same buyers, Millenials, are Mercedes’ prime target for digital advertising.

Nissan, which ranked third place on L2’s digital competence list reported a nearly 9.5 percent spike in 2013 sales.

In its 2014 report, L2 highlights the brands that are making digital competence “a point of competitive differentiation.” Ford, Acura and Lexus are among the top 23 automakers rounding out the brands that fall into L2’s second-best “gifted” category — again for their investment in digital.

Here’s a few examples of how well some of these manufacturers are tuned in to digital media. This is Ford’s Vine teaser for its 2015 Edge crossover sport ute:

Acura’s product placement deal with Jerry Seinfeld’s “Comedians in Cars Getting Coffee” is an unconventional approach for Honda Motors’ luxury arm, but one that’s touting the brand to upwardly-mobile Millenials.

Lexus was one of the auto industry’s earliest adopters of cross-platform product partnership. Its collaboration with Lisa Kudrow and the improv online show, “Web Therapy” gave Lexus — once considered stodgy and uninspired — a booster shot of pop culture relevance.

The L2 report also highlights where manufacturers are investing their e-marketing dollars most. Not surprisingly, all appear to be hitting the “big four” of social media: Facebook, Twitter, YouTube and Instagram.

The means by which automakers will build out their digital marketing strategies are expected to become yet more diverse, as the medium continues to innovate. While the digital space may be a ways off from usurping traditional TV ads and billboards as a primary form of advertising, it’s entirely feasible to expect digital budgets to keep growing. Automakers lagging behind would be wise to recognize the digital space as key to brand growth and survival.