Understanding the Three Tiers of Automotive Marketing

drivingsales.com/brooke-craven/blog/understanding-the-three-tiers-of-automotive-marketing

According to a recent study, U.S. advertisers spent more than $205 billion in 2017 alone. This means that although
digital marketing is changing the face of the game, customer outreach and engagement is still a top priority and
spending category for executives across myriad industries.

Always near the top of the pack are automotive marketers. One of the reasons for this placement is that
professionals in this industry aren’t only interested in reaching the public shopper. Instead, there are indeed three
separate advertising tiers they must focus on and cater to. Understanding the logistics behind each can help
today’s modern marketer succeed in all realms. Today, let’s take a look at what these levels are and what success
means within each.

1. Tier 1: Original Equipment Manufacturer

When an Original Equipment Manufacturer, or OEM, undertakes a marketing campaign, it is often with the most
money and resources available. These programs are often performed in conjunction and partnership with some of
the world’s top brand agencies to maximize exposure, grow recognition and build sales. They are also used to help
launch new automotive lines or innovative OEM products.

One example of a Tier-1, OEM campaign might be the inclusion of a specific automobile in a movie, or a television
commercial in a key time slot, such as during the Super Bowl, or one that runs with great frequency. Sometimes,
automotive brands might also opt to sponsor public-facing events, such as the Olympics, to further improve brand
recognition and customer loyalty.

At the crux of these advertisements, OEMs are not simply looking to grow their bottom line or reveal their sleek
new inventory. They’re looking to create an emotional response in their viewership, and often use sentiment-fueled
advertisements to do so. Anyone who has viewed the Matthew McConaughey commercials for Lincoln has seen
firsthand the emotional appeal that a cool movie start can illicit.

No longer is that automobile just an ordinary sedan. Rather, it is propelled to a higher status simply on name
recognition alone. This is just one tactic that OEMs will take when looking to generate mass enthusiasm over their
product lines. When we see someone we trust and admire behind the wheel, suddenly we see ourselves in that
same spot and as such, we’re more inclined to give the vehicle a second look the next time we’re browsing the lot.

2. Regional Advertisement Groups

Local automotive dealers and manufacturers recognize there is power in numbers. As digital marketing continues
to sophisticate and proliferate into our daily lives, there is an even greater need for nearby dealerships to partner
together to advertise industry accolades or promote community offers.

If you’ve ever seen a commercial for “your local Ford dealers” then you’ve seen this practice at work. In short, this is
a combined effort of local business leaders to draw attention to their brands and boost sales. From low monthly
payments to discounted APR financing, the terms used to describe these offers is often boilerplate, but still
effective and often coupled with a familiar face, such as a celebrity placement.

While some of the Tier-2 advertising spend will come from the local dealers themselves, it is often supplemented
with funds from the specific OEMs highlighted in the campaigns. While in some cases, the Tier 1 and Tier 2 agency
are the same, this tier is often comprised of local community dealerships combining their money together to reach

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a larger audience. If a brand has recently won an award or is offering a special promotion, these are the kinds of
mentions that a Tier-2 campaign will center on. While they’re still present on television and radio, these types of
advertisements are also becoming increasingly common in the online and digital marketing sphere as well.

3. Local Retailer Advertising

We all have that one local automotive dealer whose advertisements we can’t escape. We hear that same voice on
our local radio stations or on our news channel commercials and as such, they’ve achieved their aim: to become a
household name, at least in the local community.

Often coupled with catchy slogans or jingles, Tier-3 automotive advertising campaigns might have the lowest spend
amount of all the sectors, but that doesn’t render them ineffective. Rather, these promotions are often successful
for one primary reason: They’ve changed their focus.

While the local campaigns of old were primarily aimed at promoting the dealerships themselves, today’s Tier-3
campaign looks much different. Now, marketing leaders are taking the time to do background research and
analytics before developing their campaigns. They’re conducting audience surveys, developing buyer personas and
testing out spots before investing in full-fledge promotions. Another major shift? While television and radio
advertisements are still around, most local retailers are turning to the internet to promote their wares.

In 2017, car dealers spent 55.4% of their advertising budgets on internet-based promotions. This represents a
change in how consumers and dealers interact with each other and reveals that a multichannel approach is more
important than ever before in a dealer’s quest to stay relevant and top-of-mind with buyers.

Growth and Change Across all Three Tiers

As with any industry, the automotive one rarely stays the same. As consumers continue to evolve in the way they
interact with dealerships and view online and media-based advertisements, it stands to reason that forward-
thinking OEMs, community automotive partners and local dealerships will likewise shift their outreach focuses. Still,
throughout the myriad changes that have already occurred, all three tiers are still going strong. Moving forward,
continued growth will rely on each tier’s ability to adapt, reform and respond to the needs of the modern buyer.

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