Data mining, ad targeting to tease dealers in 2014

Automotive News

David Barkholz is a reporter for Automotive News.

December 16, 2013 - 12:01 am ET

Automakers spent time and money this year dragging many of their dealers into the digital age.

For instance, General Motors mandated that its 4,300 dealers hire a reputation-management vendor. Also, Scion offered dealer reimbursement or co-op money for search-engine advertising. In short, automakers want dealers to focus more online.

Look for more of the same in 2014 and expect new customer-targeting technologies to be vetted. Here are some trends to watch on the digital dealer front:

• Emergence of equity or data mining. Companies that sell data-mining software say that only about 20 percent of dealers make substantial use of tools that enable the dealers to determine when prospects can be pitched new vehicles for the same or lower monthly payments. Reynolds and Reynolds recently bought customer-retention vendor XtreamService, whose increasingly sophisticated software factors in interest rates, incentives and residual values.

• Hypertargeting of digital ads. Facebook has new targeting features that enable dealers to pinpoint ads so finely they can be delivered to the news feeds of employees of specific companies, to drivers of vehicles more than 3 years old or to residents within 50 miles of the store. Google's new Enhanced Campaigns tools let dealers adjust how much they'll pay for ads based on the time of day a shopper clicks on the link, the shopper's distance from the store or whether the shopper is on a personal computer or mobile phone. These tools will get more efficient with time. 

• Big-data backlash? The vast collection of data driving some of these tools is coming under regulatory scrutiny. Data vendor Dataium last month agreed to a $400,000 settlement with New Jersey for allegedly collecting shopper data from dealership Web sites that included names and personal identifying information. The company also was cited for selling information on 400,000 consumers to a second company. Dataium denied the allegations and said it agreed to the settlement to avoid litigation. Up to $301,000 of the amount could be suspended if Dataium complies with all settlement terms. Protecting consumer information continues to be a big deal for dealers.