Get on the road to revolutionizing automotive dealership advertising with Jeff Clark of Dealer Alchemist, who joins the podcast to explore the merging lanes of OTT media and car sales. Get ready to unlock the secrets of harnessing streaming platforms and Connected TV for precise, effective marketing strategies that resonate with today's 'cord cutters.' Jeff brings his seasoned perspective to the table, highlighting the importance of personalized messaging and the potential for targeted ads to drive actual sales over traditional vanity metrics like CPM.
Listen closely as we navigate the often-overlooked opportunities and pitfalls within the OTT/CTV landscape. We tackle the challenge of marketing fraud head-on, discussing the importance of smart investment and a commitment to media that yields verifiable results. Jeff's insights and personal experiences shine a light on the importance of consultative dialogue with dealers, ensuring that advertising budgets are not only spent wisely but are fully optimized to engage the modern consumer effectively.
Our journey through automotive marketing doesn't end at the local dealership; we also cast a line into the future of advertising technology. From the unique regional nuances in consumer behavior to the strategic timing and placement of ads, we dissect the dynamic nature of today's market. With Jeff's expertise, we chart the course for embracing new technologies, setting aside budgets for experimental marketing, and the continuous evolution of digital advertising. Fasten your seatbelts for an episode that promises to drive your dealership's marketing strategy into the fast lane.
Get on the road to revolutionizing automotive dealership advertising with Jeff Clark of Dealer Alchemist, who joins the podcast to explore the merging lanes of OTT media and car sales. Get ready to unlock the secrets of harnessing streaming platforms and Connected TV for precise, effective marketing strategies that resonate with today's 'cord cutters.' Jeff brings his seasoned perspective to the table, highlighting the importance of personalized messaging and the potential for targeted ads to drive actual sales over traditional vanity metrics like CPM.
Listen closely as we navigate the often-overlooked opportunities and pitfalls within the OTT/CTV landscape. We tackle the challenge of marketing fraud head-on, discussing the importance of smart investment and a commitment to media that yields verifiable results. Jeff's insights and personal experiences shine a light on the importance of consultative dialogue with dealers, ensuring that advertising budgets are not only spent wisely but are fully optimized to engage the modern consumer effectively.
Our journey through automotive marketing doesn't end at the local dealership; we also cast a line into the future of advertising technology. From the unique regional nuances in consumer behavior to the strategic timing and placement of ads, we dissect the dynamic nature of today's market. With Jeff's expertise, we chart the course for embracing new technologies, setting aside budgets for experimental marketing, and the continuous evolution of digital advertising. Fasten your seatbelts for an episode that promises to drive your dealership's marketing strategy into the fast lane.
Welcome back to Automotive Alchemy today. Absolutely special I want to say special guest, but he's part of the dealer alchemist crew Jeff Clark, Welcome to Automotive Alchemy.
Speaker 2:Sean, thank you very much.
Speaker 1:I'm excited about this. So for the audience, whether you're listening, watching or both, you probably have seen Jeff Clark all over the automotive industry because he's an absolute pioneer and I'll maybe let you, if you want, to, do a little bit of bragging, but I like to typically keep this brief and I would just tell the audience, if you're not familiar with what Jeff has done in the industry, from website platforms like dealercom and dealer on, and then, of course, multiple other businesses that he has built up and sold. He's literally a veteran, but somebody who has moved mountains in the industry with a lot of different companies and just literally stacked up tons of success, and now he's the president and partner at dealer alchemist and these guys are absolutely everywhere in the industry. Today we're going to talk about one of the things that they specialize in and I'm really excited to kind of walk you through this episode with Jeff on OTT. So, jeff, I really I think we opened this can by helping especially the dealer audience, or maybe those that are just not as familiar.
Speaker 1:Sure, let's just start with. What is ott? We have so many acronyms in every industry, but the car business is full of them. What's ott? Is it the same as ctv. Let's just start with the basics help us understand like what is it?
Speaker 2:great, great opening question. And you're right, this industry is full of acronyms, kind of like the military, right? We just shorten everything up and throw an acronyms everywhere. So OTT really stands for over the top and it defines multiple touch points. So your iPhone, your smartphone device, your tablet, all of those devices fall under the OTT category. Of those devices fall under the OTT category. While we reference it as OTT, we're really talking about CTV, right, ctv being connected television, right? So you know, let's fast forward a little bit and talk about what the industry loves to refer to as cord cutters. And I know in my household we cut the cord some time ago and for the audience that doesn't know what a cord cutter is, those are folks that have moved away from traditional cable, growing up as kids when we got cable TV, that was the coolest because we got MTV and we got HBO and we got Cinemax, and you know I'll we'll tell this story on another time about watching Cinemax after one o'clock in the morning, right?
Speaker 1:I'm a red blooded, you know, dude, so I get it, yep.
Speaker 2:But? But CTV is really where people get the bulk of their their entertainment. You see on airplanes, you see it in airports. You see it on airplanes, you see it in airports, you see it in the mall. People are watching or binge-watching their favorite shows, but the preferred place to do that is in the comfort of your own home watching your 45, 50, 60, 80-inch television, and that's really where the bulk of the impactful media comes from today, as it would relate to what is oftentimes referred to as OTT.
Speaker 1:Yeah, and OTT has really become very important in the digital landscape. Ten years we weren't talking about it at all. Five years ago we started to talk about it. Why do you think it's become so important today, especially for car dealers?
Speaker 2:That's a wonderful question, sean. There's been a monumental shift. I mean, yes, we're in 2024. While COVID seems like it was just yesterday, it also seems like it was far away. And leading into COVID, that 2018-, 2019, while cord cutters were still around and streaming services were gaining momentum, most car dealers were still using traditional media advertising. They were working with their agencies and they were going to the major three networks during either morning or prime drive time in the evening, and they were putting a large amount of their budget into those buckets, if you will.
Speaker 2:What happened is, as COVID hit, obviously, a huge slamming on the brakes of the supply chain. If you were a dealer and you had cars that you couldn't give away now you were not only selling them, but you were selling them for thousands of dollars of profit, above and beyond what you would normally hope to sell that vehicle for. So I think dealers got comfortable in saying, well, listen, if I've got 50 people lined up to buy two cars, why am I spending money in advertising? Can't knock anyone for that, right? You have to ask what am I doing with my money and should I save it for a rainy day? Right, you have to ask what am I doing with my money and should I save it for a rainy day?
Speaker 2:What has since happened is is inventory levels have come back up. Dealers are seeing higher inventory levels than they've seen in the last several years, yet they haven't gone back and taken that budget that they had pulled away from traditional advertising and reallocated that. And what I mean when I say reallocation is, at a certain point, when you take enough money out of the market, you start to feel it in your sales and because, really, in the last since 2010, 2012,. What you're really seeing and if you think about it even though again it seems like yesterday, that was in some cases 12 to 14 years ago 60% of that audience has now cut the cord and is now doing strictly streaming just because the cost had become so outrageous.
Speaker 2:And some of the audience might say well, the purpose of streaming is that there's no ad-supported content. Actually, most people that have cut the cord are opting for ad-supported content because it's free. So now you have the chance or opportunity as a dealer principal or a decision maker inside of a dealership, to say hey, how do I intelligently reinvest my money back into the market? And in no way is this a statement against traditional. Traditional has a tremendous amount of value. You just need to be intelligent in that allocation. So again, what's really happened with COVID, with the shift dealers were, let's be honest, they were getting fat and happy.
Speaker 1:And now that we've got to go, back to selling.
Speaker 2:You're going back to the well, trying to do the same thing over and over again, oftentimes joke. That's the definition of insanity doing the same thing over and over and hoping for different results. So OTT CTV is one of the greatest, most untapped areas of opportunity that a retail car dealer could utilize today.
Speaker 1:Yeah, all of it's fascinating to me. I'm very well aware of it, and when people started to talk about it a few years back now, I was naive not willfully ignorant, but certainly not one of my areas of expertise. And as the years have rolled on, a lot of the things that you're even talking about now they feel even personalized, because you're living through the evolution of something that's an expansion within this digital sector, and I'm glad to hear you to say as well that there's a place for traditional as well. I mean knowing your ICP or there's another jargon, marketing jargon knowing your ideal customer profile is really important to know where OTT fits and CTV fits. So one of the things I wanted to ask is you know, especially because I know there will be people that consume this information that are also just like hey, share with me some of the basics of how OTT platforms are being utilized right now within the automotive industry and really maybe not just too high up in the sky at 30,000 feet, but really with dealers, how they're beginning to utilize them?
Speaker 2:Yeah, that's a wonderful question and I'll hopefully dissect it in a way that isn't too high level but also doesn't get us down into the weeds. So there are a number of marketplaces, right? Just they're infinite. There are more people out there selling, you know, ott spots, spaces, placements, than you've got stocks listed on the stock exchange. It's almost infinite, right. So what has happened, at least at this stage? Because while a decade plus of OTT CTV being available and when I say OTT and CTV, I'm also referencing streaming audio, I'm also referencing direct display. So when you're like gas station TV, if you go to the gas station and go to fill your gas pump and you're getting subjected to an ad now, oftentimes it's a hot dog and a bag of chips and a soda for $2.49, you know, come into your local Sunoco or 7-Eleven or Quick Trip or whatever your gas station of preference or point is.
Speaker 2:What it's doing is it's capturing people in those micro moments. Remember, google used to talk about micro moments all the time. It's getting those little snippets of time to get your brand in an optimal time where you've got someone's captive attention. You know, unless you live in the state of New Jersey and I don't know if there's any other states out there you're out there pumping your own gas.
Speaker 2:So they've got you for anywhere from, you know, five minutes to as much as 10 or 15 minutes, depending on what you're driving, and they've got your captive attention. So you're talking about placing media at an optimal time. Now the key to placing that media is knowing whether or not the consumer is in market or not, and that's one of the beautiful things that OTT and CTV can actually do it can identify an in-market consumer, can actually do it can identify an in-market consumer. So one of the biggest things that I'll share and if people take nothing else away from this than this, you really want to start with an attribution-first framework. We do it in pay-per-click, we do it in social, we do it in so many different parts of digital advertising, but the industry has failed to really do it with OTT and CTV. It's sort of the wild west, believe it or not.
Speaker 2:The biggest purveyors of that content are actually the cable companies. Right, they're your Spectrum Reaches, they're your Comcast, they're your you know again. The list goes on and on, and none of those companies' names mentions anything about the quality of their product or otherwise, just simply saying that the ISPs and the DSPs are out there and they've got a ton of content and they know consumer behavior. They know when they're watching television, they know what they're watching, they know if you're connected to other devices while you're watching your favorite shows. That content is is it's available? Right, it's available for retail car dealers to say I want to get my message.
Speaker 2:But I want to get my message, as a Toyota dealer, to every consumer in my market that either owns a Toyota or is interested in owning a Toyota or previously has maybe owned a Toyota. And I'm talking for fixed and variable both. This isn't just a variable play and this isn't just a fixed play. This is getting a directed message. You know, you and I have known each other long enough that we go back to the day of the good old fashioned pop-up coupon. You go to a website, it jumps up. It sees you, everyone gets $500. Well, when everyone gets something, it's not really special, but when an ad can be directed to a consumer based on their intent and it happens all the time I mean, right here on my desk is my smartphone right? My iPhone never leaves my side. You ever noticed that you say something sometimes, even though you haven't done a search, and miraculously you start seeing that very content the next time you log on.
Speaker 1:Yeah, it's crazy.
Speaker 2:The same exact opportunity exists and has existed with CTV and OTT for quite some period of time.
Speaker 1:Yeah, it's crazy. Love the fact and love, please feel free to. You know, jump in on this. But you know our industry has three different tiers and at tier one there's always a tremendous amount of spending. That happens, uh, for people that are consuming media through their televisions, which, at tier one, is great. But, um, ott ctv whichever is the appropriate acronym for what I'm about to say seems like a brilliant place for the local version of the brand. Right? You know you've referenced Toyota a couple of times.
Speaker 1:Anyone that knows me knows I've been a Tundra guy, specifically for I don't know, I'm on my second Tundra and the first one I nearly drove the wheels off of.
Speaker 1:Specifically for I don't know, I'm on my second Tundra and the first one I nearly drove the wheels off of. I like trucks, period, but I've, yeah, I've, loved being a Tundra owner and so when Toyota stuff comes up, it typically gets my attention. But very specifically, I'm sitting here watching a Texas Rangers game and I get a specific actual dealership in my market area to cut through. That seems almost like a no-brainer of. Why would you not be wanting to cut through to people at that level, when they may already have the softening of the ground. Maybe is it tier one, maybe even the region. Tier two is doing some stuff and then you, the dealer, get to come through at tier three and say I'm the closest thing to you or I'm within 25 miles, give us a shot. Is that one of the best ways that dealers should be thinking about, or at least one of the more significant ways to utilize OTT?
Speaker 2:It is, hands down, the most cost effective and affordable way to reach an in-market or interested consumer. We've talked over the years. We refer to them as hand raisers right.
Speaker 2:I might be interested in your product. I attended your session. Please tell me more. This is just perfect for a tier three. I mean, think about it. Let's start at the back of the house and let's work forward. Imagine giving your service department, your service riders, your service manager the ability to go back to that declined service consumer and say to them Mr Raines, we know that you care about your Toyota Tundra. Most recently, when you were in for your oil change and tire rotation, you opted not to select our 30,000 mile service. Right, and most of those services are preventative. They're not necessarily correcting anything but, as you know, if you change an oil on the Toyota, put gas in it and do the basic maintenance, chances are the chassis is going to wear out or you're going to wear out before the truck wears out. Yes, so being able to reach those consumers, and whether it's a declined service, whether it's a service defector, whether it is just someone that didn't have the time that day, right, what?
Speaker 2:if you could send them a targeted message to that household, them a targeted message to that household. I don't have to tell the neighbor to the right or to the left that, hey, with this QR code or with this ad or with this special code, you can get 10% or 15% off of the service. Or, when you come in for this service, reference this ad and we'll do this additionally. Now move to the front side of the house and think about new and used car inventory. Last time I checked most dealers. That's hard cash tied up on the ground for anything they have used in CPO. So those are vehicles that I want to be moving now, today.
Speaker 2:As those things are being bought at the auction. I want to be marketing those. The auction I want to be marketing those. So the wonderful thing about CTV as it relates to OTT, is that we can get an ad specific to that vehicle or specific to that dealership to those households in the market that have raised their hand but are no longer connected to traditional television and are no longer connected to listening to standard radio. Every one of my vehicles has a satellite radio service in it, yet the only place I drive these days is to the airport and to my son's baseball game.
Speaker 2:So I'm not in the car, like someone that would be commuting X amount of time. So now what you have is you have me as a captive listener. So now what you have is you have me as a captive listener. Well, a lot of these streaming services. You can opt for ad-driven content or you can opt to pay the in some cases, $30 a month to not get any ads.
Speaker 2:But how are you going to reach those consumers and now fast forward to sitting down in the evening and wanting to catch up on Yellowstone or wanting to catch up on one of your other Breaking Bad or whatever it might be? We, as advertisers, know that Sean Raines is a Toyota owner, buyer, lover. We also know that he buys a car every X number of months or years. We also know that he buys a car every X number of months or years. Targeting that information and getting Sean engaged is the best way for that dealer to get their message directed to the market. I'm all about reach and frequency and I hear people throw those terms around quite frequently. If you're in a smaller market, trust me when I tell you the consumers in that market know that you're one of two Toyota dealers within 50 miles, but come to a major metropolitan market like Washington DC, where I live, you've got to have 30 Toyota dealers within a 45-minute drive of one another, so that's really where you need to be able to stand out and connect with those households.
Speaker 2:But it's taking that consumer data and being able to attribute like one of my favorite statements right you ready. Fraud does not convert and you might think fraud.
Speaker 1:I like that?
Speaker 2:What do you mean? Fraud Guys? This is a $25 billion industry. It's a streaming industry. It's $25 billion. Do you think there's maybe hints of fraud when you start talking about that kind of money? There absolutely is, and if you do research, if you go out there, for instance, app spoofing App spoofing is a real and serious thing. So I'll throw you a curveball. We're both baseball lovers. Take a guess at one of the most spoofed apps that exists today. And there's tons of apps, right, but what do you think?
Speaker 1:the top one, maybe two, even three most spoofed apps are out there Gosh, I don't know, maybe like an ESPN or maybe a CNN or a Fox News or something like that, close, close.
Speaker 2:What if I told you the MLB Network app is one of the most spoofed apps out there?
Speaker 1:Right? Or the Weather Channel. What if I told you the MLB network app is one of the most spoofed apps out there, right? Or the weather channel? I know you're about to share with us on that. So app spoofing tell us about that, that's so. You're talking app store right for those of us. I'll just pretend like the audience is with me saying, okay, okay, we're thinking right, jeff. Right, you're saying apps like we went to the Apple App Store or the Google Android App Store and we want to download apps for our phones. You're talking about spoofing apps like that.
Speaker 2:Yes, Correct, and what's happened is I mean, look, go back. How many times in the last X number of years have you had internet security training from your employer? That said, you know, if you see an email and it seems suspicious, right, it's the same concept. It's someone taking and representing themselves as if, though, they have available media. And who wouldn't want to advertise on the MLB network? Who wouldn't want to advertise on the Weather Channel?
Speaker 2:So, many people and I get this question often One of my dealers. As a matter of fact, god love him right. He's got his dealerships are in a let's call it more remote southern area and he specifically wanted to only be on Fox News Network. He didn't want to be on any other networks. He just-.
Speaker 1:Because they're probably most popular in his area.
Speaker 2:They were absolutely most popular in his area and I could feel his passion. I could feel that's my consumer, that's my audience. I know my people. I've been here all my life.
Speaker 1:Yeah.
Speaker 2:I don't disagree. But the thing you don't want to do whether it's World Cup, world Series, super Bowl, final Four you don't want to go out and tell your partners where to go buy media. That's like telling your doctor how to operate on you. You don't want to do that. You want to go where the consumers are and you want to be able to consume and buy the highest converting media. And when I go back and I talk about fraud doesn't fraud doesn't convert. What I'm saying is is fraud exists everywhere.
Speaker 1:Oh yeah.
Speaker 2:Right, clickbait, pay-per-click fraud, right, you name it. It goes on and on and on, and this isn't exclusive to the automotive industry.
Speaker 2:My point is is really good. Advertisers are going to be able to detect the fraud. Why? Because it's not converting Right and it's simple enough to pull the plug on that advertiser. I can tell you our blacklist is bigger than our whitelist. We've got more people that we won't buy media from than people that we will buy media from. So what that should say to everyone listening is is have you just checked the box? Me as a dealer, have I just checked the box? I ask people sometimes do you do chat? Yep, how's it work for you? I have no idea. Okay, interesting response. I love the fact that they're honest. Do you have OTT or CTV? Yep, how's it working?
Speaker 2:I don't know that can't show that Jeff Clark or Sean Raines, because of this wonderful little device, stepped foot onto your lot to look at a vehicle. And that's really where finding the right partners is key and critical for your dealers, because your dealers need to first start with the why. Why am I doing this? What do I? Hope to get out of it? Well, of course I want to sell more cars. Fantastic, what is it doing for you? That's normally where the brakes get pumped.
Speaker 1:Yeah, you just unpacked a few things that I think are great, that I just want to reiterate. So the audience is really picking up on this One. I love the fact that you addressed that in all forms of marketing there's fraud. It's been there in paid search, I mean, the amount of bot traffic, even with organic, has always been an issue People discovering that in their analytics, um, and that's a, that's a real issue and it always will be an issue. I mean the, the social media platforms. I mean the people that, um, that are, I think, suspicious that you know 50% of Twitter is fake. We know that there are tons of content farms everywhere, so there's always people that kind of want to game a system. But it doesn't mean and so I love the phrase that you know, fraud doesn't convert, because it's true, all that stuff, whether it's, you know, found here within OTT or paid search or bot traffic, the fraudulent stuff doesn't convert. But knowing that that is a factor is really, really, actually it seems to be important to know, because it doesn't mean that the entire medium isn't valuable. In fact, what you're saying is it's extremely valuable.
Speaker 1:But you also got to know a couple of things so that you're not just checking a box, and dealers have historically and this is me being, and you and I both we have known each other a long time always been kind of sympathetic to the fact that dealers are constantly dealing with layers and layers and layers of more new stuff, technical new stuff, and they're just sitting here in a lot of cases saying how do you expect us to keep up with all this stuff?
Speaker 1:So I like the breaking down of there's always some things to be aware of. Some of that can be fraud, some of that are some of the challenges of putting all these things together and you know, I think that's an important thing for dealers that might be thinking. You actually answered a question that was going to be my next one to you, which is kind of facing some of the challenge of integrating this into their marketing mix, and I think one of those you mentioned just don't let it just be a box that you check. You're going to need to know enough about it so that you're making smart decisions, because the ability to cut through with your brand and those specific messages again, what you were just sharing made me immediately think of the dealership where I go, the Toyota dealership where I go for service. They have been relentlessly pounding me for weeks through text messages and phone calls, through snail mail which I just literally my wife put on my desk, the other day because they don't understand.
Speaker 1:Like you, I don't drive as much as I used to. So hitting my intervals for oil changes 30,000, 60,000, all that stuff is way off from what their tools say. Way off from what their tools say. But, oh my goodness, they probably would have gotten my attention even more so because baseball season's back and since how we've talked about baseball a little bit. If, all of a sudden, I got a more specialized message about service from their store while I'm sitting here watching a Texas Rangers game, that might be the medium that finally gets me to actually tell them hey, by the way, I will be in when it's time, but you're about 10,000 miles off. That's pretty huge. So there are some things that dealers have to think about. That could be the challenges, but they seem to be easily overcome, to make sure that it becomes something that, again, they're not checking the box, but you're fully integrating it in as a part of your overall strategy. The touch points through TV are just huge not to be involved in it.
Speaker 2:They're enormous and let's address another issue. Let's address another issue.
Speaker 2:Most dealers at least the ones that I've dealt with in my 26 years career want to just stick their toes in the water to see if it works. That's not a concept. You want to try with this particular medium, and here's why I'm not a very good poker player, right, and I know that. So, by the way, please, any of your listeners out there want to invite me to a poker game, know that I'll show up and just throw my money on the table and just get it over with quick, right.
Speaker 1:Take it Pour me, a bourbon, and take my money Exactly.
Speaker 2:Exactly Because, because you know, you know if I'm going to come get you right. And you also know that I'm just completely full of it and I'm not holding anything. The wonderful thing about the game of poker is is you better have enough money if you're going to sit down at the table, Right?
Speaker 2:And the mistake and I use poker as an analogy, because so many dealers will sit down and, for instance, we worked with a partner the other day. Their Kia store had an addressable market, optimal market, within 17 miles of the dealership, of more than $50,000 in addressable spend. One of their other stores had an addressable market of more than $30,000. That's $80,000. Now some of your listeners might be like, oh my God, I'm never going to do that. Well, of course you would. If you can prove that you're selling enough cars, you'd write that check all day long.
Speaker 1:Yeah.
Speaker 2:Of course you would, but what's the thing that we've been trained to do? Let's try it, let's see if it works. And if it works, I'll spend more money. What most dealers are doing today is they're spending $5,000 or $4,000 or maybe $8,000. If you're and again think, small, medium, large, right, you want just enough to show a presence in the market. But if you're spending $8,000 and barrier of entry is at $30,000, there's a major disconnect there. Do yourself a favor, get out of it. Go put your eight grand somewhere else. I mean that I personally don't want to lose any client, nor do I want anyone who is a competitive to go lose a client right.
Speaker 2:But you really have to ask yourself the question if for me to have a presence or for me to dominate a market, I should be spending X or Y and you're spending down here. You don't have enough money working media spend to actually make an impact. You're not going to reach those households. It's unfair to you as the dealer. It's even more unfair to the advertiser supporting you because you're expecting them to work miracles with your eight grand. Here's a newsflash for you. Go spend your eight grand somewhere else because you're wasting your money.
Speaker 2:I'd rather you take and save that money for an entire year and then come see me for 90 days and let me show you what a real lift can do when you put the right working media together. But again, it's got to be an attribution first model you have to demand and expect. Today, with CTV and OTT, you can actually do sales matchbacks. You can tell that that consumer actually was in the dealership and bought a car or showed up at the dealership. So there's just so many different ways that you can better attribute your ad dollars. But again it all starts with the why am I doing this? Am I just checking the box? And, more importantly, am I spending enough money and that's always a loaded question to go back to an advertiser with right.
Speaker 1:Yeah.
Speaker 2:Sean, I'm a dealer. Am I spending enough money with you? Well, of course you're not. You need to spend more.
Speaker 1:Yeah, yeah.
Speaker 2:But you need to look at the market, you need to look at the addressable households. Yeah, yeah, I want my phone ringing or people walking through the door. If I've got to email you back or get on the phone to call you, my chances of engaging you are significantly less.
Speaker 1:And that's really where OTT and CTV come into play. Yeah, so we've crawled our way into a little bit of things that kind of feel like implementation and I love this is just you, this is kind of who you are, but just real talk, like you know, if eight grand isn't even like come on, that's like that doesn't even buy your prom dress, so you're not even getting to the dance, you're just going to tell somebody it might, maybe they may not like it. But I've been saying this lately like listen, if the truth hurts, it's not, it's not my fault.
Speaker 2:One truth hurts, it's not it's not my fault One of my favorite statements is my data trumps your feelings right? I'm never. You know me well enough and you've known me long enough. I'm going to shoot you straight. I'm going to tell you if what you're doing makes sense.
Speaker 2:Now we can debate strategy and I think debate is healthy, right, I really do. It welcomes my, my viewpoint of it. I'm sitting behind a desk running an ad tech company right, and a very successful one at that. You're grinding out every day in the retail world trying to get every up fight for every vehicle, get the right allocations, do all the right. I mean, god bless people on the retail front lines, right, especially in major markets. It is just, it's just a tremendous amount of work, but it's it's knowing who you are right, it's knowing. Is this the right vehicle for me today to get to the next destination point in growing my business?
Speaker 2:right, it doesn't do me any good to go out and buy a car I can barely afford get financed and six months later the repo man's getting it right.
Speaker 2:If you can't afford that car, step it down a little bit, but maybe that's a category or classification of vehicle that you shouldn't be in to begin with until your situation changes and where I think dealers, again they need to go back and they really need to think about what was I spending pre-COVID? How much of that was going to traditional, because, again, there's a lot of value in traditional if done correctly. How much do you remember back when you and I were coming up through the ranks in the digital world? And one of the biggest mistakes that a lot of sales guys would make when going into talking to dealers is immediately attacking them spending money on traditional. You can't track it, you can't prove it, you can't do this.
Speaker 2:And I would always tell my salespeople please don't do that. You're insulting someone who has grown a very successful business by doing the things that they're doing. Challenge them to reallocate some of that budget to see if they can get a better measurement and a better result, and that's all we're doing here today. We're asking you, mr and Mrs Dealer please think about the hard fought ad dollars that you fight to put together to grow your business, and what is it doing for you. Are you checking the box? And if you're not, and if you're asking a lot of the right questions because I have dealers, I'm on the phone with them and they'll ask me hey, jeff, what about fraud? How do you deal with it? Man, I got a laundry list for you, right? I'll tell you what we do, I'll tell you how we do it, I'll tell you why we do it and I'll also tell you you know what?
Speaker 2:We ourselves sometimes are victims of fraud and we do this for a living. But when we find it, we set it aside and we move on. Anytime there's enough dollars at play, whether it's in Bitcoin, buying media, anything else someone's going to figure out a way to spoof it and to create fraud. Unfortunately, it's society and we can't change that. But what?
Speaker 2:we can change is the demand and the expectation. And the other thing that I'll share with you, because this is another one of those key takeaways I had a professor in college that used to smack the podium every time something was going to be on the midterm. Well, I'm smacking my desk here, right? Cpm doesn't matter, cost per thousand does not matter. It is a vanity metric and it is complete and utter noise. Jeff, why do you say that? I'll tell you why. Because you're forcibly making your advertiser buy inexpensive traffic to show you that you can get a cheaper cost per thousand. I don't care what it costs me per thousand as long as I'm selling cars and I'm getting the results. So if you're being approached and if you're being sold to, it doesn't mean that the people selling it to you are bad intention, because that's how they've been taught to sell it to you.
Speaker 1:Yeah.
Speaker 2:Right, so stop focusing on. Well, I've got a $40 CPM and that's wonderful. Who cares? Yeah, who cares, yeah, you're, you cares. You're stepping over dollars to pick up dimes because you're proud of the fact. I mean, back in the day, how many times do we remember time on site was a major metric. Today, all the data shows us the less time you're on your site, the better design site you have. Now, if there're repeat visitors that have come back time and time again and are spending a little bit more time each time, that's just showing the path that they're going down towards the sale. So I know I throw a lot at you, but clearly I get passionate about this subject because I want people to understand that there's a huge value to doing CTV properly.
Speaker 1:that there's a huge value to doing CTV properly.
Speaker 1:Yeah, I pick up on a couple of things.
Speaker 1:Is it safe for me to assume that part of the dialogue that you have with dealers when they're even just considering it, even if they haven't signed a deal and you guys are implementing but one of the things that you guys do with them is to help them understand if they actually have a budget that would pay off for them Using that eight grand, versus you need to be at 20 or 30 to even be in your market dictates this. Is it safe for me to assume that that's part of what you guys go through with a dealer of like, hey, if you want to get in the game, here's the places and probably you could give them a good, better best. But if they're like, yeah, we were wondering what we could do for $600 in OTT, you guys would be like, yeah, nothing, but in a way that's consultative that helps them understand that if you want to get into the game, this is kind of how you guys assess that it's safe to assume that you guys kind of walk dealers through that.
Speaker 2:Absolutely that it's safe to assume that you guys kind of walk dealers through that Absolutely. And here's an interesting statistic. This came from a very notable source Dealers are capturing less than 5% of the addressable market in the OTT CTV arena.
Speaker 2:Less than 5% of the addressable market. 95% of dealers out there aren't. And again, just because you're doing some OTT does not mean that you're truly in the game. Because you just got your pay-per-click, your display, your retargeting, your remarketing, your SEO. I mean budgets have swollen to just epic levels. I remember as you and I had built a company together looking and watching how those budgets had shifted over time.
Speaker 2:The same growth that you've seen over the last probably 15 years with paid search is the exact same growth that you will start to see with OTT and CTV, because people will begin to appreciate the value and what it actually provides them in terms of an ROI. And that's when you're going to really start to see the light bulb go off for some folks, because again, we can actually prove it to you Now. Does it take us 60 days to be able to get all the metrics back and sit down and show you the lift you've had? Absolutely it does. It doesn't happen instantaneously and in the automotive world we want everything to happen today. So you got to be a little patient for that data to be gathered and to be adjusted and explained. But the wonderful thing about it is is it's all attributed.
Speaker 1:Every last piece of it. Yeah, that's one of the things I was going to ask you is how do the dealerships measure OTT for success or just kind of what's happening there? I'm not as familiar with that in terms of the measurement of this type of advertising.
Speaker 2:It's being able to tie that consumer at that household to entering into the physical dealership. So we all know this wonderful device right and I go back to this because this is something that people spend hours every day with their head buried into.
Speaker 2:It's the very first thing you pick up when you wake up in the morning other than a cup of coffee right, it's the very last thing that you look at before you go to sleep at night, unequivocally right. And with that, you have this wonderful thing called location services. Right, this phone literally gives off what's known as a gray pulse. So when you pick up your phone I literally just yesterday got back from New York and when you're in New York, what's one of the things that you really want to do? You want to have some New York style pizza, right? So when I plug in pizza, it was giving me pizza for Manhattan. Right, I didn't get a chance to have pizza in Manhattan. It wasn't until I got back to Long Island. But, sure enough, when I plugged in just the simple word pizza, I started getting Long Island-based pizza shops.
Speaker 2:That very technology, as simplistic as it is, tells everything about you. Your phone knows your political beliefs. It knows the apps that you're running, if they're open. Almost everyone has ways Almost everyone has, whether it's Facebook or Snapchat. All these different apps are gathering data on you. You agree to it when you sign up for the app under the wonderful thing called a EULA, a user licensing agreement that gives those advertisers permission to track your whereabouts.
Speaker 2:So it is so simplistic that the fact that we can see when you've engaged, we know if a phone call has come from that household where we've targeted and I'm Jeff calling Sean at the dealership. Hey, I'm looking for a forerunner for my son. I saw your ad. Is this vehicle still in stock? And, of course, what am I going to do? I'm going to want to come down to the dealership after I've done some research and maybe test drive the vehicle, talk with my wife about it to see if it's the right purchase for our son, and just it kind of goes on and on and on. So gone are the days of spray and pray. Right, you can genuinely track a consumer all the way through to the point of visit and purchase through CTV, if done correctly.
Speaker 1:Now are there specific like OTT platforms or maybe they're called services that you believe are maybe more beneficial or ideal for car dealers?
Speaker 2:You know there's some wonderful companies in the market today. I would encourage every dealer out there to talk to their ad agency. You're welcome to reach out to Dealer Alchemist directly, even ask for me directly, and I'm happy to have those discussions. The problem with OTT today is it truly is the wild west.
Speaker 2:I could go out tomorrow and set up an OTT business with no formal background other than my years of experience of running companies in the automotive space, and I can go to the exchange and I can buy media and I can sell it to a dealer and, as long as I've got capital to do the float or the right billing processes for my consumer, and now I'm off selling media, right. So I would dig in a little bit deeper and find out what is your experience in OTT? Where do you buy your media from? So I had shared with you earlier today, before we got on the call, a chart that shows market share by major players, right, and that's something that when this is released to the public and you take a look at it, some of the biggest names in all of streaming only have about that much of the market share, right, because there's so many players, whether it's.
Speaker 2:Peacock, whether it's Hulu, whether it's Netflix, I mean you would think some of these names would have this much market share. Well, remember, it's a $25 billion addressable market, so their percentage calculates to a lot of dollars. But how do you get the right mix? What's the right mix for your brand, your market? Toyota dealership in Texas is different than one in Florida, it's different than one in New York and it's different than one in California. Buyers are different. Their buying habits are different. You can't just say, hey, I've got a dealer here and they do this, and why can't you do that? Well, because it's two different markets. And you'll find that, when it comes to buying media, we have a very strict rule here. If it doesn't convert, you're gone. Period, end of story. We'll look at it, we'll try to analyze the data, but we're looking for activity. Right, we want to see the ground shake. We'll look at it. We'll try to analyze the data, but we're looking for activity. Right, we want to see the ground shake. We want to see movement.
Speaker 2:Now, as you the dealer, it's entirely up to you to put that consumer into a car. That's not my job. My job is to bring you an interested consumer and deliver them to you in a cost-effective manner, where it's good for you and it's good for me and it's been a pleasurable experience for the consumer, and when you can target them and speak to them directly. Look, nothing drives me more crazy than snail mail. I still, to this day, get pieces of mail on a Lexus LS that I owned 10 years ago Nine years ago, right.
Speaker 1:Nine years.
Speaker 2:I'm getting media. Someone wasted a stamp and killed a tree to send me something on a car that I haven't had in nine years, which tells me they've got bad data. Their advertising partners aren't flushing out the lists and we're just we again. We're so rushed, we're so hurried to do the same thing time and time and time again. Man, check the box, check the box. Did I do this? Did my ads get out? Did I do that? Boom boom, boom, boom, boom, boom. And you're always chasing that next number.
Speaker 1:Yeah, that it's interesting. You mentioned that around data. Um, I can only imagine um around data. I can only imagine. Feel free to share your thoughts, but that analytics and audience data play actually a really significant role in OTT in terms of optimizing, but without having a lot of personal experience myself of kind of looking especially on the analytics side, but um, I would. I would guess that that would also then become a really um, you know, a significant thing to be kind of tracking in the analytics world, because you would be learning things that you would then pour back into optimizing the campaign for even better and better, like continually improved performance.
Speaker 2:Absolutely so. Our philosophy is it's a continual process improvement. Right, we're constantly looking at the traffic that's being driven and is activity being taken Because, again, we can see and I don't want this to spook people, but we can see inside the household, we know when a consumer has seen an ad, we know when the ad was delivered, right.
Speaker 2:We know the activity that's taking place. We know when someone has gone to the website. You know something that's interesting some advertisers will talk about. Your ad was delivered at this time. By the way, one of the things we don't do is we don't run ads overnight, right During the late night hours into the early morning. We're not spending a dealer's money because one of two things is happening if someone's up that late at night right, neither of which are probably good, and you don't need to be spending your ad dollars to do those things and there are advertisers out there that will show. Our ads ran on this network and you got this much of completion time. So I share this story because this comes from a friend of mine. You familiar with something called dog TV.
Speaker 1:No, okay, dog TV Dog.
Speaker 2:TV.
Speaker 1:Like my dog, like your dog, your dog. Tv my dog.
Speaker 2:Like your dog, your dog, easy I didn't know what dog tv was until I heard this story, so I went and looked it up and dog tv was designed and built for diehard pet lovers. So when you leave to go to work, you don't want your dog being lonely while you're gone, so they turn on dog TV.
Speaker 1:Okay.
Speaker 2:True story right.
Speaker 1:I believe it. I didn't know that existed, but when we're going to be gone for a while. We turn on a game and leave it on for the dog Look.
Speaker 2:I would rather you leave the Rangers game on for the dog right. We do, you know, nonetheless, and what we had found through our partners was there was all this consumption. There was all this consumption going on, yet we weren't seeing a single clickable action coming out of any of it.
Speaker 1:We'll come to find out.
Speaker 2:The consumer in the household was interested in the car, but they weren't seeing the ad because the dog was the one watching TV Right. Like you can't make these things up.
Speaker 2:And that's when I go back to. I don't believe for a moment the advertisers ever felt like that was fraudulent. Some young media buyer sat there and said I've got to fulfill this media order. I need to place this much media with this much activity at this cost per thousand impression. Yeah, and as such, I've hit my golden. Hey, here's my CPM number and I got you this much activity.
Speaker 1:Yeah.
Speaker 2:Well, as an educated dealer, I'm going to go back and say, well, what channels were you showing my media on? And a really good advertiser will tell you the date, the time and the place that that media was shown. They can do that right Now. I love dogs. I'm a huge dog lover. I think dogs are wonderful. Matter of fact, I like dogs better than I do people. Truth be told, right.
Speaker 1:Me too.
Speaker 2:But the interesting thing of it is and again, this isn't to poke fun at anyone, but the interesting thing of it is and again, this isn't to poke fun at anyone this is a chance to make light of what is a real situation that sometimes our dealers find themselves in. And look, I feel you when you say how are they supposed to stay on top of all this stuff? I'm old enough, as are you, to remember when websites first started hitting dealerships, and I remember dealerships.
Speaker 2:I don't need a website. No one will ever buy a car online. I remember when eBay hit.
Speaker 1:Who's?
Speaker 2:ever going to buy a car, sight unseen. Well, guess what? I got a newsflash for you Three million cars later. Right? What do people do? So I think, as retailers, we make the mistake of thinking well, we would never do that, so why would anyone else do that?
Speaker 1:Yeah.
Speaker 2:And that's where the shift, the paradigm shift, the opening your mind to what consumers can do, will help you better understand or appreciate what can be done. If you open your mind to saying, okay, I'm spending and again, this is no attack on direct mail, right, but I recently met a dealer that was shifting a massive amount of his budget to direct mail Massive, I mean, I'm talking tens and tens and tens of thousands of dollars. I was interested so I asked you know who's your direct mail company? You know what do you feel that they do? We kind of went through the whole discussion and what it all boiled down to was nothing else was working for him. He had had success in direct mail previously, I assume with the same partner, don't know, didn't ask, so now he was going to go back to what once worked for him.
Speaker 1:So now he was going to go back to what once worked for him which is direct mail.
Speaker 2:That's a pretty risky play, sitting from my side of the desk, to put that much of your budget, or your total addressable budget, into direct mail when I know for me personally, every single one of those things goes directly in the trash. I don't even look at them.
Speaker 1:Right, me too.
Speaker 2:Now again, not knocking a direct mail company and not knocking a dealer on a decision. What's the traditional 1% to 2%? If the math pencils, great, but having something where you know that the market continues to do this, with consumers cutting the cord and more people on streaming services and less people tied to a cable box right.
Speaker 1:Yeah.
Speaker 2:Why wouldn't you want to put your message there, or at least gamble a little bit and take part of that money and put it in direct mail because you're passionate about it? It's work for you. Why change it right? Yeah, but take another part of it and shift it over here and sit still for 90 days yes, so you know, the quick takeaway is don't tell your media company how to spend your money in ott and what channels to spend it on. Just don't.
Speaker 1:It's a really bad idea, right uh, those are really really great points and, as a B2B marketing guy now but my foundation being in B2C it applies to both business to consumer and business to business. When you're talking about marketing, you need to always tell people that most of marketing is experimentation. And if you've done something once and it paid dividends or, like you said, the math pencils great, but if it stopped doing that, therefore you stopped investing in it it may not be the best thing to go back around to something that you already exhausted, versus remembering that most of marketing is experimental, where, when you begin something and I try to tell and not just dealers, but businesses, just like dealer alchemists there's always a segment of your marketing budget that you should have in its infancy stage or phase one, where your expectations of what's going to happen with it are nothing. Don't expect anything, expect that.
Speaker 1:You always have to be curious about the places where it seems like, hmm, there's something to this and the audience is great, and where are all the fish? Where are you going to start fishing? Ott seems like a no brainer and it seems like a place that's rapidly evolving has been since it kind of hit the marketplace, but with so much more upside that it seems like a smart place to be doing that. So I would tell dealers just to kind of piggyback on what you're sharing, jeff.
Speaker 2:So I love your analogy on the fish thing and I shared this with a dealer the other day and it seemed to work, so I think I'm going to kind of keep with it. And I had no idea what his response would be. And I said to him I said, sir, are you a fisherman? And man, he lit up like that smile couldn't have been any bigger, right he?
Speaker 1:goes.
Speaker 2:I am, do you fish? I said sometimes I'm not very good and I have zero patience, right. But I said every time we go to our lake house, my son enjoys fishing. So, trying to be a good dad, I'm going to go down there, even though I don't know what I'm doing, and I'm going to fish. And he goes. Well, you know, that's good, that's great. So you know, we talked to kids and grandkids and fishing and shared a couple of fish stories. I said so if you're a fisherman, you have a boat, he goes, oh yeah. I said you have a fishing boat, he goes, oh yeah, you know. Told me all about the boat and the size and the engines and, okay, great. I said do you have a fish finder on your boat? He goes, I do. I said that is OTT, that is CTV. Ctv and OTT are the fish finder for consumers in your market. Now, your consumers aren't fish, obviously, but you want to hook them like fish and drag them in like fish and you want to get a big haul right.
Speaker 2:That is the most realistic kind of measurement. So for anyone listening, whether you're a fisherman or not, if you know what a fish finder is, that's ideally what OTT and CTV can do for a dealership, if done properly, because you can literally find that consumer or that fish, whether they're in a cove or in the deeper part of the lake, or early morning or later in the day.
Speaker 2:You know again the wonderful thing about technology is it tells all. And if you're just smart enough to listen to technology and embrace it and I love your analogy about set aside of your budget set aside part of your budget to try things with zero expectations and you can hope and see what it does. Because too oftentimes the automotive industry is reactive instead of proactive.
Speaker 2:And that's one of the things that I would encourage you know start being more proactive, start challenging what your market looks like, and if you're in a market where you've got advertisers that just own the airways, that's fine. You can compete with those bigger guys by going down the CTV route and spend a fraction of the money and still reach a pretty significant amount of the addressable market.
Speaker 1:Absolutely. You put that stuff in phase one and if it passes phase one then you move it on. But that no expectation phase that's where you always learn the new stuff and a lot of people dealers and companies that are selling services to dealers they get a little bit apprehensive, or some very apprehensive about that phase one of, but zero expectation. We don't know if it's going to work, but every single thing you've ever done with marketing at one point in time was at phase one and it passed your sniff test. So you moved into phase two because it was worth it, or you threw it out, and so I love the. The fishing metaphor is fantastic, it's really great. Believe it or not, we've uh, we've been burning miles on this road so quickly that we're, we're at my last question, at least for this episode, and and that is just a future, do you see, kind of, where's this where, especially for our industry? Where is it going in the next couple of years? Do you have any, any insight on that?
Speaker 2:I I don't have a crystal ball, but what I can tell you is is you know, I've been, I've been closely monitoring the OTTC TV landscape for the last six years. That really came about more through just education and sitting at conferences and working with people and talking, you know, with some of the thought leaders about what's that next greatest thing. Just the last six years alone, you can see almost hockey stick growth for OTT Again, even though 3% to 5% of dealers are doing it. There's another portion that are just again kind of sticking their toes in the water a little bit to see what is possible. I believe what's going to happen is you're going to get even more increased clarity into the ad dollars and into the networks.
Speaker 2:I do believe that there are a number of companies out there that are going to address the fraud issues right, because it has become a real concern in some places.
Speaker 2:There are two or three companies doing amazing jobs being able to catch that fraud and, again, people given the chance to act poorly. Some people are going to act poorly, period, but it's having advertisers around you that can catch it, correct it and make sure, at the end of the day, that they're placing your dollars in the right place and I think the ease of things is going to be better. One of the struggles with CTV and the OTT platform was just the creative piece. One of the hurdles to it is that to put an ad out there so oftentimes the dealer needed to go create essentially a commercial. Today there are automation tools that can do that without creative and production costs. Now I don't think much beats a really high-quality production piece that markets and stands out with your dealership. Piece that markets and stands out with your dealership, but sometimes using automation to create an ad for Tundras, if you're heavy on them, or Tacomas and I give a lot of love to Toyota because Toyota as a brand is very creative they're very forward thinking.
Speaker 2:I've had the pleasure of working with Toyota as a brand for well over 20 years, and I can tell you there are some other really great brands out there that put a lot of effort and time, but both you and I know from our time together Toyota was always the ones making the major investments and making sure that their dealers had all the best assets and the best guidance, and so I give a lot of love to that brand because they're always such a pleasure to work with and for. I think you're going to see attribution become the core, similar to what you saw and I love George Nemi, by the way, and all that he's done to work on GA4 and the transparency, because that was a big deal too Moving from analytics as we knew it before to GA4, you're going to see that same migration take place within the OTTC TV realm. It's not there. It won't be there for a while, right, that is something that's going to take time, but as more advertisers come to market and as dealers demand more transparency, you're going to see that take place and I think, frankly, you're going to find that a lot of the DSPs and ISPs are going to do a better job of making sure that the traffic that goes out there and the data that goes out there is of high quality.
Speaker 2:So, just again, I encourage people if you don't know, ask, and if you're doing something, to just go through the motions, that's okay.
Speaker 2:At least you tried.
Speaker 2:You can't ever be mad at yourself for trying, but try to educate yourself, try to learn, try to find someone who knows better, so you can really kind of go through the progressive steps to say am I getting just a YouTube pre-roll product?
Speaker 2:Am I buying just from Amazon because they're Amazon and, by the way, I love Amazon, the Amazon driver knows my wife, my kids and what we eat pretty much every night of the week, because at some point I come home and there's a package outside. Yes, a lot of these companies know a lot of things about you, but no one company not Netflix, not Amazon, not Hulu, not Fubu none of them know everything about your buying habits. And that's where having a data partner who can find the right mechanisms, find the right media for you and then address it to your market and address your message to the consumer, only then will the industry really start to hit stride. We're still a little ways away, but I'm really encouraged by the growth and very much encouraged by some of the players in the market, bringing innovation to the forefront of what is really the new media for car dealers.
Speaker 1:Fantastic. What a great episode. I'm already thinking of things that I want to ask you on the next episode where we talk about OTT and CTV, because I feel like we scratched the surface, but there's so much more depth that we can explore. So, ladies and gentlemen, jeff Clark, president and partner at Dealer Alchemist, has been our guest today. Thanks for joining us for another episode of Automotive Alchemy Like this. Subscribe If you're on the YouTube and you're consuming this through YouTube. Subscribe so you'll know every time we drop a new episode. We also put a lot of small short form content from these episodes all over, but we certainly do that in LinkedIn, instagram and YouTube. Follow us, of course. The LinkedIn page is a great place to follow and get more information. If you want to go deeper, to take advantage even of a complimentary digital marketing audit, go to dealeralchemistcom and get in touch. And, of course, don't miss us. We'll have another episode before you know it, where we'll continue to turn automotive challenges into gold. Until next time.