Facebook and Amazon will command nearly 25 percent of all digital advertising dollars spent in 2018.[i] These two brands are more than powerful advertising destinations. They are super platforms, or self-contained universes offering businesses – including automotive dealerships — a vast audience and tools to reach them. The rise of super platforms is an example of a change catalyst that can help savvy dealerships adapt to new ways of doing business. Let’s take a closer look at them.
The Three Characteristics of a Super Platform
Super platforms are notable for three characteristics: size, ability to support their own ecosystems, and influence.
Size
Facebook, of course, is the world’s largest social media network, with more than 2 billion monthly users – and another 1 billion on Instagram, which Facebook bought in 2012[ii]. Amazon is not only a dominant commerce platform and trillion-dollar company – it’s also a major search engine. According to a PowerReviews, 38 percent of people start their product searches on Amazon versus 35 percent who start on Google.[iii]
Self-Sustaining Ecosystems
As Amazon and Facebook continue to build massive communities of shoppers and social networkers, they’ve created tools to encourage businesses to support their self-contained ecosystems through advertising. For example, Facebook offers advertising tools such as audience targeting and measurement for both Facebook and Instagram, including the increasingly popular Facebook Marketplace. Dealerships that want to thrive on both Facebook and Instagram need to have Facebook business accounts. Amazon provides advertising tools such as display ads under Amazon Advertising. Most are limited to businesses that sell on Amazon, but not all are. For example, businesses that do not sell on Amazon can tap into its services for display and video ads that appear on Amazon, Amazon-owned sites, and Amazon media partners.
Influence
How the super platforms influence automotive depends on whether you’re discussing Facebook or Amazon. Facebook has established itself firmly as an ally to automotive dealerships by making Facebook and Instagram attractive destinations to advertise and share organic content. But Amazon’s influence on automotive is a matter of speculation. On the one hand, Amazon wants automotive businesses like Hyundai to showcase their inventory on Amazon. But as discussed on outlets such as Automotive News, Amazon may also want to move into automotive retailing and compete with dealerships.[iv]
What Dealerships Should Do
Whether Amazon encroaches on automotive retailing remains to be seen. It’s clear, though, that Facebook and Amazon will continue to grow. By 2020, together they will account for 28 percent of all digital advertising spend. We suggest that dealerships:
Put Facebook and Instagram to Work for You
Dealerships should view Facebook and Instagram as two essential touchpoints to reach shoppers where they are in the digital world. Focus first on putting Facebook to work for you – because Facebook has made the stronger push for automotive retailers to succeed on its super platform. A useful three-pronged approach consists of:
Capitalize on Facebook’s and Instagram’s advertising tools to create targeted ads for the general Facebook and Instagram communities. In addition, the Cars Social product enables automotive dealers to reach a new and unique audience of in-market Cars.com shoppers on Facebook and Instagram. By leveraging Cars.com’s first-party audience data, the product targets consumers on social media who previously researched inventory or expressed interest in similar vehicles in the market. A social ad with inventory imagery from local retailers is served to targeted consumers, redirecting shoppers to its corresponding Vehicle Details Page on Cars.com. In initial beta testing, Cars.com learned Cars Social drives an 80 percent unique audience when compared to social campaigns modeled from a dealership’s first-party website audience.[v]
Facebook has been making Marketplace a stronger platform for dealerships to sell their used car inventory to shoppers. For example, as Facebook announced in the fall of 2017, Facebook has been collaborating with third-party automotive sites such as Cars.com to list their inventory on Facebook Marketplace. Facebook has also improved its search filters to help shoppers do more intelligent local searches for vehicles and dealerships nearby. And Facebook recently launched its own advertising product for businesses on Marketplace.
Cars.com is now making it easier for dealers to turn Marketplace into a lead source. For example, Cars.com recently announced the launch of a product, Social Sales Drive™, which makes it easier for shoppers on Marketplace to connect with dealerships via an AI-powered chatbot and managed chat agents. Giving Marketplace shoppers access to dealerships via chat extends dealerships’ hours on Marketplace, which is important: beta testing showed more than 50 percent of car buyers on Facebook Marketplace wanted to interact after business hours.[vi]
Over the years, organic reach for businesses on Facebook has declined[vii] But sharing organic content (such as photos of your inventory) on Facebook and Instagram remains an important tactic to complement advertising. And there are a number of ways to do so – for example:
Fortify Your Retail Ecosystem Beyond Super Platforms
Yes, super platforms are powerful, but we know that consumers visit multiple touchpoints on their path to purchase — including, of course, Cars.com, your own website, and your lot. Super platforms should complement your retail ecosystem, not replace it. Understand your strengths and use tools to capitalize on them. Even in the digital age, successful dealerships close the deal on the lot with a salesperson understanding a customer’s needs and meeting them. Tools such as Cars.com’s Salesperson Connect™ are designed to help shoppers find the right salesperson by sharing more detail about the salesperson, thus humanizing the dealership’s brand.
By understanding super platforms and applying the tools they provide, dealerships can grow stronger. And by watching super platforms closely – such as Amazon’s potential involvement in automotive retailing – dealerships will be in a better position to adapt as needed. What is your game plan for succeeding with super platforms?
Note: this post is the third in a series of posts about the change catalysts that dealerships must adapt to in order to thrive. Other catalysts we’re blogging about on Grow with Cars include the emergence of new business models such as ride sharing and the advent of personalization. Download this free, on-demand webinar to learn more about all three of these change catalysts and how dealerships can respond.
[i] CNBC, “Amazon is number three in online sales, closing in on Google and Facebook,” September 19, 2018.
[ii] Statista, Facebook Users Worldwide 2018 and Instagram Users Worldwide 2018.
[iii] PowerReviews, “New Study Finds That Retailers and Brands can Leverage Reviews to Compete with Amazon and Search,” June 6, 2016.
[iv] Automotive News, “Could the Amazon of Auto Retail Be Amazon Itself?” September 24, 2017.
[v] Cars.com testing, November 19, 2017, to December 31, 2017.
[vi] Cars.com Internal Data, June 2018.
[vii] Hubspot, “The Decline of Organic Facebook Reach & How to Adjust to the Algorithm,” May 3, 2018.
