The Current State of Automotive Marketing with Aharon Horwitz

Ishan Pandey: Hi Aharon, welcome to our series “Behind the Startup.” Please tell us about yourself and the story behind AutoLeadStar?

Aharon Horwitz: Thank you! I am excited to be here.

AutoLeadStar was co-founded in Jerusalem by myself, Eliav Moshe, and Yishai Goldstein. We became friends in the military and university and connected years later over a shared passion about empowering small businesses to win at modern marketing and stay relevant against the monopolizing forces sweeping modern capitalism. We got going in the broad category for small and medium enterprises until, in 2016, an advisor angel of ours suggested we look at the automotive industry. This was 2016 going into 2017. We dove in and never looked back, today offering a powerful platform to car retailers that uses AI to understand shoppers and dealer inventory and help dealers market and sell online the way they would in a showroom.

Ishan Pandey: Every year, cars with new features are launched by companies that wish to keep their market competitiveness alive and thriving. What role does digital marketing play in aligning the buyer’s wishes to the automotive company’s goals?

Aharon Horwitz: So much is dependent on the vehicle and car maker. A bad run of models, either lack of shopper interest or quality manufacturing issues, absolutely kills a brand and can set it back for four, five years or longer. The opposite is true too. So a big part has to do with the manufacturer. But the retailers play a massive role in guiding shoppers to the features that they need and want.

The best salespeople at car dealers today are not pushy or aggressive; they are entirely consultative and supportive. Many dealers are moving to one-price models to remove all the haggling and complexity from what’s inherently a complicated process. We think that digital marketing has to be like this. First, it should be super specific to the shopper interest. No billboards on the internet. Second, it should be fully scaled on all the offerings and features available in the inventory so it can find the right matches. This should be updated and optimized around the clock to meet shoppers when and where they want it.

Ishan Pandey: Can you explain how automated marketing strategies work and why content marketing strategy plays a key role in attracting the desired customer base?

Aharon Horwitz: Great question. Google and Facebook today are not the Google and Facebook of five years ago. When dealing with a huge amount of inventory and first-party data, there’s practically no way for a manual-oriented marketer to max out the opportunities these platforms provide truly. An automated platform that can sync with the niche market is entirely necessary. Content has to be useful, but it’s much more important to test and optimise continually than designing the perfect ad or website CTA. Having learning built into automation is the key to success.

Ishan Pandey: How exactly has digital marketing remodelled the automotive industry and what has been the most significant shift in terms of it becoming a trendsetter for innovation?

Aharon Horwitz: This is a fascinating little history. Car dealers are the inheritors of the previous modes of mass transportation, including carriages dealerships and bike shops. Inherently these were family-owned community businesses, passed down through the generations, and employing locals. Dealers were known hubs and destinations in towns across the US and really beyond.

When the internet emerged, dealers began to get disintermediated from their customers. In the early days, they started to build their own rudimentary websites and online catalogues, but quite soon along came classified websites that became mass aggregators of vehicles. As shopping shifted online suddenly, dealers were no longer community rooted brands, and they came to be seen as merely a price, a phone number, and email address.

This started to change around 2015 when dealers started to regain their direct to customer brand and marketing channels. I’d bet spend on aggregator sites has dropped since, and spend on direct has gone up. The reasons for this change came from dealers understanding what digital mastery and maturity look like; the rise of pure-play digital dealers like Carvana, Shift and Vroom spurred this on as well.

Ishan Pandey: What technology stack is deployed by AutoLeadStar to increase the sales of vehicles?

Aharon Horwitz: AutoLeadStar knows how to mimic dealer insights into digital, and uses a very powerful engine to find high-quality shoppers on the web, engage them with differentiated personalization on the website, and support the ongoing sale and nurture by activating the dealer’s data through the process.

Technically, we merge a marketing automation platform (think Hubspot or Drift with advertising automation baked in) with commerce enablement tools.

The impact is usually a far more significant amount of quality leads for less cost, which is the result of how AutoLeadStar leverages data, optimizes performance, and interacts with the marketing platforms

Ishan Pandey: According to you, what policies and practices should digital marketing companies employ to protect consumers against data exploitation, especially in automated ads?

Aharon Horwitz: I think the principle of treating people the way you would want to be treated should be the guiding star. We think first-party opt-in data is the best data to market around. We have largely stayed away from 3rd party data and showed dealers that we can heavily bring results that outperform those using 3rd party data. From what I’ve seen in the industry, most dealers are looking for top-tier solutions that follow consumer protection guidelines and best practices. There are bad actors, but we’ve largely seen those as the exception, not the rule.

Ishan Pandey: In this age of technological advancement, what do you think will be the future of small, personally owned car dealerships?

Aharon Horwitz: It’s clear that buying a car is a different sort of purchase than a pair of shoes or a new shirt. There’s a clear value add in a customer-centric operation on the other side of that massive purchase. Therefore, I believe that dealerships should excel in customer service and support and embrace technology wherever it supports that mission. Those that do have a future, though we also see a lot of consolidation around bigger, more corporate and tech-forward groups.

Ishan Pandey: Why do you think automated marketing is necessary for these small businesses?

Aharon Horwitz: To compete and win business on the internet today, you need a pretty robust and sophisticated strategy. It’s very hard to do this manually. What ends up having is you start working for the tech instead of the tech working for you. It becomes a bottomless pit of frustration and missed opportunity. An automated solution like AutoLeadStar’s does all the work, leverages the data to get results beyond what any human could do, and does it under the dealer marketing leader’s strategic guidance.

Ishan Pandey: In the automotive industry, the Covid-19 pandemic and its aftermath will cause negative impact and sudden shifts in consumer purchasing behaviour. What are your views on Tesla and the future of the automotive industry?

Aharon Horwitz: Similar to general retail, we saw in our data that COVID drove a huge spike in digital activity in automotive. However, unlike retail, automotive digital shopping didn’t make up for the loss in foot traffic. It’s simply clear that buying cars purely online isn’t fully baked yet for the mass market.

In this sense, Tesla is an exception that proves a rule and reinforces what’s common in the more traditional retail universe. For example, Tesla makes use of showrooms, test drives, and dealer-like activity. People largely still want to touch, feel, and experience a vehicle before buying.

We, therefore, believe dealers need to become “click and brick,” or even better, “click or brick.” Sell, service and support customers in the way they want. In that constellation a physical store can be a big compliment to the digital showroom and order process.

Today only about 2% of cars are sold through pure-play digital dealers (Carvana, Tesla). 98% of non-private transactions are on traditional retailers. They are modernizing and aim to be a significant force in the future.

As a side note, but incredibly important: it’s those 98%, the traditional car dealers, that employ millions of people across the US with reasonable wages. It’s one of those few strongholds left where you can get a good-paying job without a degree from MIT. I cherish that, and that’s why we’re proud to provide them with powerful technology to thrive in the future.

Ishan Pandey: According to you, what new trends are we going to see in digital marketing in the auto industry moving forward?

Aharon Horwitz: Everything is going to be about customer service. The whole industry is shifting to the philosophies and processes that reflect high-end consumer expectations, and that will be very apparent in the digital infrastructure that dealers build over the next few years.

Thank you!