Nielsen Auto Marketing Report 2018 -- Rethinking the Path to Purchase

By Nielsen Data InSites Archives
Cover image for  article: Nielsen Auto Marketing Report 2018 -- Rethinking the Path to Purchase

Understanding why consumers purchase the cars they do is, to put it mildly, complex.  For many of us, it is not easy to explain the process we ourselves went through last time we made an auto purchase decision; there are simply too many factors in play, both emotional and practical.  It is with this in mind, and as part of their mission to help automotive executives capture the voice of the car buyer, that Nielsen today debuts the Nielsen Auto Marketing Report 2018.  Using intelligence collected over the course of 220,000 surveys conducted over six years, it is the first of an annual series of auto marketing reports designed to provide a deep understanding of a consumer's path to purchase, the impact of media on brand awareness and the purchase intent and buying behavior across age groups.

"Two things jump right out of our research," says Nate Hutchins, an expert on automotive consumer behavior and Vice President, Watch Client Strategies, Automotive at Nielsen.  "The first is that, as you might guess, the quality of advertising messaging is more important than the quantity. Seventy-five percent of all car buyers reported that they intend to purchase their top-of-mind brand.  As the name suggests, this is the highest quality of unaided awareness a brand can achieve, and it provides a significant edge over the competition before a shopper even sets foot in a dealership.  On the other hand, somewhat surprisingly, we also found people don't shop for cars by a simple process of elimination, starting with a list of preferred vehicles and whittling it down.  Consumers actually increasethe number of brands they consider as they get closer to purchase."

This feels like a contradiction.  On the one hand, building top-of-mind awareness is clearly a powerful indicator of purchase intent.  On the other, consumers actually tend to increase their open-mindedness to brands as they get nearer to purchase.  On this point, Nielsen's findings are clear and consistent:  A typical consumer is considering between two and three brands when they first begin thinking about a car purchase.  But by the time they are actually searching for a car, this number has doubled.

The key learning to take away, Hutchins says, is that auto marketers need to develop campaigns that serve two distinct but related ends as a consumer moves down the path to purchase.  The first step is building long-term brand equity using broad reach, traditional methods, including television and radio.  But it is equally important to understand how to use highly targeted advertising such as digital to keep a consumer's attention and interest as they near purchase, as that is the time when they are most open to communications from the competition.

Of course, the way to communicate with shoppers varies by their age.  While over 75% of new vehicle purchases are made by people who are 40 or older -- Gen Xers and Baby Boomers -- the brand preferences and buying habits of Millennials will make a major impact on the auto industry in the foreseeable future.  "This is already being felt, as recall of automotive ads in digital, mobile and social channels is on the rise driven by the increase in Millennial car shoppers," Hutchins notes.  "Therefore, it is important to address all three groups, and on their own terms."

Younger car shoppers tend to be the most open-minded.  Their brand allegiances tend to be more flexible than those of their older counterparts, and they are more open to messaging from brands outside of their initial favorites.  Being the heaviest users of new media (and, conversely, those least likely to engage with broad reach media like television), they are somewhat easier to identify and create highly specific messaging for -- at least for marketers who understand and embrace digital marketing.

Boomers and, to a lesser extent, Gen Xers use significantly less digital media.  They tend to be more easily reached through traditional, broad reach media including television, radio and print.  "They are more loyal to the brands they've used before," Hutchins points out.  "Marketing dollars and messages should be used to reinforce the brand narrative."

Of course, there are more factors impacting purchase intent than simply where a consumer is in the sales process or what his or her age happens to be.  A market share of a brand also plays a big role, and those with 7% or more of the market have a big advantage -- these brands have 4 to 5 times the unaided awareness of smaller brands.  However, though purchase consideration starts lower for smaller brands, it increases by nearly 70% at purchase time, far outpacing the equivalent lift for larger brands.  This may not quite even things out, but it does provide significant help.

Taken together, all of these findings reinforce a singular point:  While brands that have captured the attention of their audience early and effectively will have a significant advantage, consumers are nonetheless willing to begin seriously considering brands other than those they initially prefer as they near the point of purchase.  The younger the audience, the more noticeable this trend, indicating that it will only increase over time.

This is cause for optimism.  After all, marketers have access to more channels and tools than ever before, and -- thanks to research like that provided by Nielsen -- they have more and better actionable consumer data at hand to guide their strategies.  The opportunities for intelligent and creative marketers to successfully engage consumers have never been stronger.  This is, no doubt, a major reason why Hutchins concludes his report by pointing out that, "There's never been a better time to be an auto marketer."

Photo courtesy of Nielsen.

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