As we wrap up Q2, there are glimmers of hope after an almost-18-month pandemic. The unemployment rate is now at 6% (vs. 4% pre-pandemic, and 14% during the first month of the pandemic). The GDP is forecasted to grow 8% while personal income is forecasted to grow over 10%. At the same time, over 50% of Americans have received at least one dose of the COVID-19 vaccine, and retail vehicle demand is forecasted by HIS to hit over 14M – exceeding pre-pandemic levels.

And dealerships are facing a new challenge – driven by unexpected demand and chip/manufacturing shortages, inventory levels are at an all-time low. To compound issues even further, this has driven the used car market to record levels – making it more difficult than ever to secure used inventory.

As we enter Q3, how does a dealership deal with these unprecedented conditions? How can preparations be made for a successful second half of the year? Surprisingly, the answers lie squarely in your digital marketing strategy.

“There is no question that sales of specific models in specific geographies are being disrupted by low inventories, but consumers are nevertheless demonstrating their willingness to buy despite having fewer vehicles to choose from in retailer inventor” – Thomas King, President of the Data and Analytics, J.D. Power

First – let’s take a look at the market. Even though inventories are low – consumers are staying in-market with either a) switching to used, b) switching brands, or c) placing build orders. Consumers are also spending more than ever. The Board of Governors of the Federal Reserve System disclosed that the average amount financed for a new car loan hit an all-time high towards the end of 2020 (and is forecasted to go even higher in 2021).

A Google/LRWGreenberg Study also showed that for the first time ever, more than half of purchasers who searched switched brands from what they previously owned. The same study also revealed that 91% of shoppers consider multiple brands while researching.

In this unique environment, if there is one thing that continues to remain, it is the importance of search engines and being “present” for those looking. A Google Gearshift study found that 79% of consumers used search engines to find the dealership they purchased their car from. Similarly, search was the most used tool for car research (followed by online video, dealer websites, and OEM websites). More interestingly, after seeing a TV advertisement for a new vehicle 90% of consumers said their first action to get more information was the internet search engine.

So, how can we use this to plan for a successful second half of 2021? The answer is to be present. While the knee-jerk reaction might be to cut advertising since inventory is low, being present where consumers are looking ensures that you continue to acquire and nurture your leads. While it may seem like going against the grain – similarly to what we saw as COVID hit, those who continue to invest in growing their presence ultimately are the ones that reap the benefit.

In a recent Google study, they showed that an investment in SEM, focusing on low-funnel keywords, generated sales activity as late as nine months after the initial click (with peak activity being at Month 5).

It’s more important than ever to make sure you are present in your marketplace, for your keywords, across the search platforms that your customers use (that means using not just Google, but Microsoft Ads as well!). Additionally, always remember that any traffic you drive to your website today can be remarketed to in the future. Creating awareness of your dealership today, even with low inventory, is crucial to establishing a sales pipeline for months and years to come.

“Today it’s important to be present, be relevant and add value.”

Original Source: https://read.nxtbook.com/digital_dealer/dealer_magazine/july_august_2021/how_to_use_digital_marketing_.html

Even with state regulations and other dealership impacts from the pandemic, consumers did not stop shopping – or purchasing – vehicles as there was a new need for the ability to travel safely from the comfort of their vehicle and a new way to buy – online.

Auto shoppers turned to Google to understand if they could – or should – purchase a car: We saw ‘Is now a good time to buy a car?’ spike 900% in March when the pandemic hit.

As we enter the last month of 2020 – dealing with a COVID resurgence and election uncertainty, it is as good of a time as any to come to terms with the fact that vehicle buying has changed.

With consumers becoming more comfortable in this new normal, a shift has emerged in the market with people now buying cars as a result of personal safety/health reasons. And there are also new demographics of people buying. A recent Cars.com survey reported 20% of respondents who didn’t own a car were considering purchasing one. A simple metric shows how far we’ve come – in 2018, only 1% of car sales in the U.S. were online. In March of 2020, nearly one in 10 car sales were online. According to forecasts, 25% of car purchases will be online by 2025.^[1]

“If a consumer wants to discuss financing over the phone instead of coming in, be ready to do that.”

So, who are these new digital-embracing consumers? How are they going to be shopping? Well, 63% of new purchasers said they would consider ordering their future car online and having it delivered to their home. 73% said they are comfortable negotiating the purchase, lease, or financing terms entirely online or through a mix of online and offline.^[2]

Some in the automotive space see this as an existential threat when, in fact, it is an opportunity to evolve and thrive. Is there a secret formula to accomplish this? Any specific timing on when things will change again? Unfortunately, no. But working with thousands of clients across all industries, I will give you my playbook to succeed this holiday season and beyond.

1. Short-term: Be flexible. 

Consumers are going to have different comfort levels – some will embrace digital more than others. Be flexible, understanding, and empathetic with both the way you approach the consumers and with your marketing messaging. Offer flexible purchase options, pickup/drop off options, and so forth. If a consumer wants to discuss financing over the phone instead of coming in, be ready to do that. And not only should you be ready to do all of this – you should be conveying this on your website and in all of your marketing.

“The path forward for auto is to offer shoppers the choice of moving frictionlessly between online and offline experiences in the customer journey.”

2. Mid-term: Be Agile.

If there is one thing that’s certain, it’s that we will have more uncertainty in the next three, six, and even 12 months than we’ve ever had before. By most metrics, more-so than we had in the last six months. Nobody can predict all of the trends, but you can be agile in it. Make sure you review your marketing and messaging on a regular basis. What’s important to the consumer next month may be different than what’s important to them today. Be ready to spot trends in real-time and take action on them.

3. Long-term: Be transformative.

The digital transformation is here.

“Clearly COVID has dramatically accelerated digital adoption,” Gass says. “I mean, some would say, five-plus years what it typically would have taken across all demographics.” – Michelle Gass CEO Kolh’s Nov 5th, 2020.

You must reimagine what the purchase experience looks like for the shopper. How are you creating a frictionless online experience, educating your customers, and connecting your messaging across all tiers? How are you capturing demand in a dynamic way? Doing all of this will require smarter automation that can make actionable sense of data and signals, in real-time, at scale. The path forward for auto is to offer shoppers the choice of moving frictionlessly between online and offline experiences in the customer journey.

I believe what will separate those who thrive vs. those who fail in the next five years will be determined by how good you are at capturing data, turning it into actionable insights, and altering your business operations based on that. You must understand and accommodate the new digital consumer (who will range from those who are purely digital to those who move back and forth) and also communicate your accommodations in all that you do (website, all levels of marketing, etc.)

So, how do you succeed with your marketing in the new digital paradigm?

Succeed by upping your measurement game. Establish your business objective and align high-value action KPIs and store visit measurement strategies to understand the entire journey and signals of an auto buyer.

Succeed by adopting automation. Adopt bidding and targeting tools to help you drive better performance while maintaining strong privacy controls.

Succeed by focusing on cross-tier customer-centricity. Deploy a frictionless, customer-led, end to end online auto shopping and purchase experience supported with marketing across tiers.

Succeed by identifying how the industry’s new but somewhat standardized buying tools are not so similar at your dealership. Work closely with your internal marketing personnel and outside Agency/Consultant providers to carefully craft your unique identity in an ever-crowded space of online car sellers

“One thing in dealership marketing and messaging has not changed: clearly communicating the inherent Differences between your store and the competition will empower your marketing efforts and dollars to attract more customers than your competitors.” This, according to Chris Anderson at Anderson Advertising, a 30-year agency in automotive marketing.

It’s clear that auto brands have survived ups and downs in the market and other crises before, but COVID has thrust the auto industry into a new paradigm of doing business. Brands that will develop an e-commerce foundation, power of the program, and deliver tireless marketing will be the ones that succeed in the future.

C O N T R I B U T O R   B I O

Alex Melen is an Award-Winning Entrepreneur & Keynote Speaker. He is the founder of web hosting company T35 Hosting (founded 1997) and co-founder of advertising agency SmartSites (founded 2011). SmartSites now manages over $50MM/year in advertising spend and has six offices and over 140 employees worldwide. SmartSites has been featured in the INC5000 for four consecutive years as one of the fastest-growing digital agencies and Alex has been featured in Business Week’s Top 25 Entrepreneurs, Bloomberg, Forbes, and NPR.

Original Source: https://read.nxtbook.com/digital_dealer/dealer_magazine/dealer_magazine_december_2020/pivoting_your_marketing_to_ca.html

First of all, how are you and your family doing in these COVID-19 times? 

Alex Melen: Thankfully, we’re all doing fine. Our headquarters are in Paramus, NJ – next door to NYC, which was hit really bad in the first round of COVID. I’m happy to report that we’re all doing fine, though, and everyone is staying safe & healthy.

Tell us about you, your career, how you founded SmartSites.

Alex Melen: I started the company with my brother Michael almost 10 years ago. The idea was to create an agency that can bring enterprise-level solutions and ROI-driven marketing to SMB clients, helping them embrace digital and succeed online.

How does SmartSites innovate?

Alex Melen: SmartSites, as a company, innovates on an ongoing basis, making sure our clients are getting results and succeeding with their digital presence. This ranges from designing cutting-edge and ROI-driven websites, following Google’s best practices and private betas for SEM, and generating constant growth in organic search traffic through link building and content writing.

How the coronavirus pandemic affects your business, and how are you coping?

Alex Melen: With the majority of our clients being SMB’s – and almost half from the NYC-metro (which was hit very hard by Covid) – we were impacted pretty heavily. However, we committed as a company to not lay off any of our 150+ employees and continue to invest in the company, our employees, and our clients. While that meant losing money for the first time since our founding as a company, we needed to make sure we were there to support both our employees and our clients in these difficult times.

Did you have to make difficult choices, and what are the lessons learned?

Alex Melen: Yes – perhaps the most difficult was the decision to allow the company to lose money for several months to retain our employees and continue helping our clients, sometimes at a very big loss. I still believe that was the correct decision, and we’re now more prepared than ever to continue growing the company and helping our clients. 

How do you deal with stress and anxiety? How do you project yourself and SmartSites in the future?

Alex Melen: As a company – we are committed to our continued growth strategy. If there is any silver lining to COVID is that it made the importance of digital clearer than ever. We’re not out of the woods just yet – but the long-term outlook is bright, and with our entire team in-tact, we are more prepared than most of our competitors to continue succeeding in the digital space.

Who are your competitors? And how do you plan to stay in the game?

Alex Melen: The digital media space is full of competitors ranging from 1-person-companies to enterprise-level agencies like Publicis (for whom I worked for 3 years). As before, we plan to continue our focus on our employees and our clients. Ultimately, as we continue helping our clients succeed online, we will continue our growth trajectory and plan to grow from the current 150 employees to 500 in the next few years.

Your final thoughts?

Alex Melen: While many of our SMB clients are going through a hard time right now, I think the future is bright. I think the importance of digital and investing in your online presence (both in terms of making a website and digital marketing) will be more important than ever. Stores that got by with just a physical mall presence now understand the importance of diversifying. Local restaurants that might have been fine with just a Yelp page before now understand that they need to have a website and invest in diversification (i.e., deliveries, online order, etc..). Even places like a local butcher now understand the power of building a website and taking orders from all over the country instead of being limited to a single town. Again, if there is any silver lining to COVID is that it helped speed up the digital revolution by at least 5 years. And while not everyone agrees with my view, many are starting to coming around:

“Clearly COVID has dramatically accelerated digital adoption,” Gass says. “I mean, some would say, five-plus years what it typically would have taken across all demographics.” – CEO of Kohls 11/5/2020.

Original Source: https://startup.info/alex-melen-smartsites/

SmartSites is named to Adweek’s second annual list of 100 fastest growing agencies while achieving a three-year revenue growth of 116%.

Adweek has announced the winners for 2020 Adweek 100: Fastest Growing Companies. SmartSites ranks No. 71 on the second annual list with a three-year revenue growth rate of 116 percent. This honor is presented to a wide array of small and large agencies that cover over 20 disciplines across the globe. The main industries include experiential, creative, digital, media, performance, full-service, and more. SmartSites, a full-service digital marketing agency, has grown its revenue by over 100 percent thanks to the work completed for clients such as AGA Parts, Sir Duct Brothers, and the New Jersey Institute of Technology.

To qualify for Adweek’s 100 Fastest Growing Companies list, companies must provide at least three years of earned revenue between 2017 and 2019. In addition, entrants had to achieve a minimum of $250,000 in revenue for the year 2017. Participating agencies are required to certify the accuracy of their reported revenue data. Adweek performs additional audits to determine the validity of the applicants’ information.

“When SmartSites was established in 2011, the digital marketing agency’s goal was to develop and grow strategic partnerships to help businesses succeed online,” explains Michael Melen (Co-CEO and COO of SmartSites) and Alex Melen (Co-founder of SmartSites). “SmartSites has achieved this goal by building strong partnerships with clients and hiring a dedicated team of marketers, web designers and developers, writers, and problem solvers, who all work together to make websites and online marketing campaigns successful.” The approach that SmartSites has employed over the years has proven to be effective. Key components of that plan include planning websites based on user intent, designing websites that users love and share, and promoting websites to improve their rankings on the SERPs (Search Engine Result Pages).

To view the complete results of Adweek 100: Fastest Growing and individual company profiles, visit: https://www.adweek.com/agencies/adweek-presents-the-100-fastest-growing-agencies-and-10-solution-providers-of-2020.

Original Source: https://www.martechcube.com/seo-company-smartsites-named-in-100-fastest-growing-agencies/

As we try to navigate the new post-COVID19 world, it’s important to look back on previous nation-wide and global catastrophes to help guide us in today’s ever-changing world. With any major catastrophe, you must remember the three pillars:

Respond – Take early and immediate action to recognize sudden shifts in consumer behavior and lay the foundation for future recovery.

Rebuild – Monitor for signals to capture ever-changing demand.

Reframe – Adjust your business to the new trends, behaviors, and demand patterns to build long-term business resilience to succeed.

All businesses must remain vigilant and agile in both marketing and business practices.

2008 Financial Crisis

As we try to make sense of COVID-19 and how to adapt, perhaps the most compared period has been the 2008 Financial Crisis. Mostly because it’s the most recent, and to many, appears as the most similar. Although there are some similarities, let’s take a look at how these two crises differ for the automotive space. In the automotive space specifically, the 2008 Financial Crisis was primarily a demand shock, while COVID-19 is more of a supply shock. A J.D. Power survey in June found that 74% of US auto shoppers remained in-market during COVID-19 (compared to 31% in 2018).

“There are consumers who want to buy, have the ability to buy, but are not able to, so we are going to see pent-up demand” – Thomas King, President, J.D. Power Data and Analytics.

Of course, we did have more extreme “shock” in mid-March to May 2020. Using search volume as a proxy for demand, we saw a 25-35% drop as consumers shifted priorities to groceries and disinfectants. However, starting in June, J.D. Power reported eight consecutive weeks of increases in automotive sales.

What we saw during COVID-19 that we didn’t during the 2018 Financial Crisis was a huge drop in production and supply. Goldman Sachs reported just 25% of US Assembly plants that were open in early March as still being open in April. To compound that, many plants that were allowed to re-open by July could not because of summer holiday schedules that weren’t easily changeable – prolonging the downtime. Still, the expectations are that factories and many businesses will have re-opened to full or near-full capacity by Q4 2020 and beyond.

“As industries are gradually brought back online, that should produce an improvement in economy growth that could be ‘unprecedent’ for the U.S.” – Jan Hatzius, Chief Economist, Goldman Sachs.

Continued Uncertainty

Although there has been some optimism in the last few weeks – there is still a great amount of uncertainty that is keeping us from going into the Reframe stage. As of July 2020, 75% of car sales were in states that had some kind of restriction on automotive sales.

Unknowns 

DRIVING THE UNCERTAINTY ARE A COUPLE OF BIG UNKNOWS

1. Demand:When will we see consumer confidence return to a pre-COVID level for discretionary spending for large purchases such as new vehicles?
2. Unemployment:A strong correlation exists between unemployment levels and vehicle sales. When will unemployment start to rebound?
3. Confidence & Safety:When will consumers feel comfortable with visiting dealerships?
4. At-home Shopping:How can you meet the new expectations for digital retail experiences?
5. The state of COVID19:With some states showing a resurgence, nobody knows the exact impeding effects, possible close-downs, and the effects of the re-opening of the school systems.
6. Change in population centers:Will the population shift from the urban centers continue? Will the aversion to public transportation continue? Will this push automotive demand or will the trends reverse?

What Should You Do?

Perhaps the biggest correlation to the 2008 Financial Crisis is the stages of recovery and the response from businesses. Coming out of the “Respond” stage and into the “Rebuild” stage, we need to stay vigilant to changing trends, regulations, and consumer behavior. It’s still too early to tell on the longer-lasting effects of COVID and if consumer behavior will permanently change. Just like in 2008, unfortunately, it’s a wait-and-see game while making sure your business is prepared and able to act quickly to the ever-changing unknowns.

As we hopefully wrap up this phase in the coming two quarters, the priority will shift to rebuilding for the new normal and to meet the now-changed expectations and shopping behaviors of consumers.

Source – https://read.nxtbook.com/digital_dealer/dealer_magazine/sept_oct_2020_issue/covid19_in_the_automotive_spa.html