NADA Top Takeaways

I went into the 2024 NADA Show thinking that “AI” was going to be the phrase du jour—and it was certainly present—but “integrated” and “turnkey” were just as prevalent.

No surprise, I suppose, as this was all against the backdrop of a year that saw rising vehicle prices, interest rates, and inventory levels. Dealers could do no wrong during the first two years of COVID-19, but the gravy train barreled into a tank of molasses in 2023.

Naturally, a dip in profits leads to a search for efficiencies.

Getting the most bang for your buck should always be in style, but this latest surge in solutions wreaks of businesses ignoring the long game. And I say businesses because this isn’t just a car dealer problem.

As a previous employee of the world’s largest advertising holding company (measured by total agencies), I’ve had the great pleasure of working or crossing paths with hundreds of incredibly talented folks. Sadly, I’m seeing more and more of these mid- to senior-level creatives activating the “open to work” feature on LinkedIn.

I try to avoid sweeping generalizations, but it’s hard not to put 2 and 2 together here and discern that quality creative is increasingly being sacrificed at the altar of quarterly results.

Perhaps you’ve heard the adage “good, fast, cheap: pick two.” I tend to lean towards Benek Lisefski’s take on this being a false premise, but anyone who’s worked on Tier 3 automotive for a half-second understands the never-ending battle between good and good enough. And as costs rise for, well, everything, GMs/dealer principals will be tempted to lower the minimum requirements for “good enough” as more and more vendors sing the siren song of faster/cheaper.

Cuneo’s post-NADA rundown included a lengthy conversation about how AI efficiencies in the automotive space, like in many others, isn’t artificial or intelligence. Chalk it up as another topic for Linda Richman’s Coffee Talk audience. And the efficiencies these new tools are creating, regardless of classification, appear to be financially benefitting agencies more than their clients. We’re hyper-sensitive of this at Cuneo as we develop our own AI capabilities, but that’s a topic for another day. The takeaway here is that dealerships relying more and more on OEM-driven solutions—whether through their own marketing teams or agency partners touting “AI”—are at risk of what we call homogenized marketing: ultimately causing long-term damage via brand erosion in attempts to boost their bottom line.

Think of it this way—the more dealership ads look and feel like the manufacturer, the less differentiation there will be between same-market dealers, and the more consumers will believe it doesn’t really matter WHERE they make their purchase. The consideration stage of the funnel will be increasingly influenced by some mix of price/availability/proximity.

Dealerships need to make consumers feel something about their stores to push the consideration needle in their direction beyond those factors. For customers who’ve already purchased or serviced at any given location, branding won’t supersede their experience. Was the service they received efficient and helpful? Were the people nice? Was the store clean? Did they sweat the details? It’s why the best GMs/dealer principals stay focused on the fundamentals: so their customers become advocates, they get good online reviews, and repeat business becomes increasingly reliable.

For all the other potential customers out there, it’s branding that’s going to do the heavy lifting. Consider it as raising the floor for business expectations. White Bear Mitsubishi is a fantastic case study in this. For any dealership, the monthly offers are a caffeine shot. They may increase sales for a particular model for a specific amount of time, but there’s no long-term impact—and the inevitable crash that follows has you constantly looking for that next cup of coffee. But businesses that emphasize building their brand get a steadily increasing slow-drip benefit. Sure, those monthly offers will never go away, but instead of trying to increase the baseline model sales from, say, 5-10 per month, eventually that increases to 10-15, or 15-20, or beyond.

It takes time. It takes attention. It takes investment. But there’s a reason that branding has been around for more than 4,000 years. It works. And the dealers that understand this will have an incredible opportunity right now to take advantage of the shifting environment. While everyone zigs, you zag. In my past life as a fantasy sports writer/analyst, this was Paul Charchian’s Do the Opposite draft approach that later gained traction as Zero RB. In my Cuneo life, it’s helping our clients understand that a focus on strong branding creative—not in lieu of, but in addition to other creative efficiencies—is how you stand out from the crowd.

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