Online Video Is Key To Automotive Industry Recovery? automotive industry 195x200 If you're to believe recent statistics into an automotive recovery then you might believe that social media and networking are going to help. Or you might believe that billions of taxpayers dollars are actually driving any potential recovery for the US automakers. Your choice really.

Eric Franchi recently published an article at Online Video Insider where he offers up some statistics from a recent Google-sponsored study on the matter. Since Google sponsored it, and they sell advertising, it's hard to believe the study could have been anything but positive.

One of the major statistics he quotes was that 83% of new car buyers visit video focused sites prior to purchasing. Now that's a very large percentage and was further broken down to show that a full third of them looked at videos on brand specific sites. A quarter of them went to auto-specific sites searching for video while 11% sought out YouTube and the rest headed to Yahoo, MSN, MySpace, Facebook, AOL and other sites.

Hmmm...but were these ventures into the online video universe purely for entertainment or were they doing research for their upcoming purchase? That question doesn't seem to have actually been answered, only assumed from what we can see.  No doubt, videos can help prospective car buyers narrow down their brand choices at the early stages of the purchase funnel.

The author seems to think that by creating quality videos and then distributing them via a host of video sharing sites and social networks that it will fuel a sprint of recovery... Well, DUH! That's pretty much a given these days right? Online video is hot, the wave of the future, blah blah blah...

Here's a great quote from his article which really made me laugh:

"Don't skimp on production. A full one-third of auto shoppers watch the video content on the product site.”

So is he suggesting that automakers were in fact skimping on production or does he think they just weren't taking the platform seriously? It's hard to tell but he had some further awesome suggestions like having the video lead them to other videos or more informative pages. Brilliant!

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Honestly, how many blatantly obvious statements like this do we need to hear? This is what, the third in a week or so? They're almost as much fun to talk about as are the amazing overstatements.

Hey I did some research and the author of said article works at an advertising network, no wonder he's pushing online video ads, they probably make a killing on them. I'm not trying to make any enemies here, I'm just reporting the facts.

You want to know what I think?

Sure you do, or else you wouldn't still be reading this article right? Well here's what I think. The auto industry was on the cutting-edge of a lot of technologies at one point or another. Now? They're on the bleeding edge of big name bankruptcies. So what should they do? Get back on that horse that made them what they are and figure it out. Obviously old hat isn't the way to consumers pocketbooks anymore and the way is online and video-based. It's social networking and online community development and it's exactly what we've been talking about here for some time. You would think, having all that horsepower at their fingertips, that the big automakers would have continued to lead the way, but they failed to stop for directions and are now lost at the back of the pack.

Hey Big Auto, you want to get back out to the front and lead instead of follow? Then it's time to switch gears, change lanes and stomp on the accelerator via online video and social networking, we'll all be waiting for you at the finish line.

  • Jason Lancaster

    The auto industry struggles with internet marketing for a few reasons. First and foremost, consumers don't know what they want. As a marketer and a former dealership manager, I can think of countless times where consumers spent quality time researching a specific vehicle online before switching to a completely different make. The reason? There's no substitute for the physical experience. Therefore, a lot of clever online marketing efforts that show promise (with good participation and engagement) don't always result in sales because the consumer doesn't like the product.

    In fact, I've had some dealers tell me that all of the efforts to show off unique features online actually detract from the "wow" factor that consumers get when they first sit in a new car. I don't know if this is a valid critique, but it's worth noting.

    Secondly, there's a tremendous disconnect between dealers and automakers. Dealerships are looking to drive sales, automakers are looking to boost brand image. A lot of auto industry marketing efforts attempt to do both, despite the fact these are almost completely different goals. This usually results in a campaign that doesn't accomplish either goal.

    Third, the economic climate in the auto industry for the last 5 years or so has been tight. The majority of automakers have seen sales declines every year since 2003, and it's difficult to justify investment in online video...or any other new "fancy" internet marketing model. The most successful automaker of the last decade, Toyota, has absolutely no need to worry about "cutting edge" online marketing - there average buyer is nearly 50 years old. When the industry leader doesn't make the effort, no one else will either.

    Therefore, automakers (and dealers) are behind the curve. While I'm not convinced online video and social networking will lead the auto industry recovery, I'm quite confident that dealers and automakers can leverage social networks and highly targeted advertising to improve both their short-term and long-term prospects.

    My best guess: The automaker that determines how to establish a sales funnel in a social network (without appearing too commercial) will have the most success. Until someone figures out how to replace the consumer's desire for the physical shopping experience (look and feel), online video is at best a complementary piece of the puzzle.