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The automotive sector hits the data jackpot

  • Graham Tricker
  • 3 min read

Some sectors are naturally data-rich. Retailers, for example, particularly those that run loyalty card programs, collect enormous amounts of information about their customers.

Other sectors are data-poor. Brands that don’t have a direct relationship with their end-users, such as CPG, typically know very little about them.

But some of these sectors are about to win the data lottery. One of them is Automotive.

Car manufacturers used to struggle with the big gaps between people’s purchases, finding it all-but-impossible to maintain a relationship with customers. They didn’t know when prospects – or even existing owners – were back in-market. And when a customer was in-market, the manufacturers didn’t know who was in their consideration set.

Now, however, a new ecosystem is emerging in the sector which promises to solve all these problems.

Components of the new automotive ecosystem

This ecosystem includes many of the traditional players: manufacturers, insurance companies and finance firms. It also involves existing players in new roles, such as comparison site Carwow which uses car configurator data to see who’s in the market, and for what. But crucially, they‘re being joined by new and disruptive entrants. These include electric vehicle manufacturers like Tesla and Polestar with their D2C sales models; roadside charging infrastructure providers such as Gridserve and Ionity; and home charging specialists like Zap and Ohme . 

The new world runs on data. At every stage of the consumer’s path to purchase, different businesses share, licence or activate their data to build a better picture of that consumer. They either make money directly, or increase their chances of doing so in the future. Everybody wins.

Laws and rules

This revolution is happening just in time. The laws around how people’s personal data is collected, stored and used continue to tighten. Technology giants change their rules to address public concerns, and to further their own ambitions.

Most high-profile has been Google’s decision to stop supporting third-party cookies in its Chrome browser. This follows similar moves by Apple with Safari and Mozilla with Firefox. It will mean that only one browser in ten worldwide will accept these cookies. The infrastructure that has allowed targeting, retargeting, measurement, frequency capping, attribution, campaign optimisation, and dynamic creative optimisation will virtually disappear. For the automotive sector, high-value events such as brochure downloads, test drive bookings and car configurations become much more difficult to measure and attribute value to.

Google has postponed the switch-off repeatedly since its initial announcement in January 2020. The move is now expected to happen in the second half of 2024. In the interim, marketers and agencies have scrambled to find alternatives to third-party cookies, yet according to LiveRamp’s recent research, 73% still feel unprepared despite 92% expecting cookie depreciation to go through. 

The most popular move has been to focus on opted-in first-party data, often in the form of sign-ups for email newsletters. This is partly why everything from razors to ready-meals is now available on subscription. It’s also partly behind the rapid growth of retail media, where retailers use their own first-party data to target brand advertising on their own sites, or licence it to help brands target their advertising elsewhere.

So while third-party cookies are on their way out, third-party data is alive and well.

Familiarity breeds content

GDPR – and the legislation that followed – scared many marketers away from third-party data. Compliance seemed so challenging, and the potential fines so onerous, that people felt it wasn’t worth the risk. But brands’ understanding of the regulations has improved since then. They now know what questions to ask potential data partners to make sure they’re compliant. Meanwhile, new technologies allow companies to share their first-party data in a privacy-compliant way (another factor behind the rise of retail media).

This is the data jackpot. Automotive marketers no longer have to follow anonymous consumers around the web. They don’t have to struggle with imprecise targeting and over-simplified attribution. Instead, they can combine their own first-party data with rich data sets from relevant partners. They can understand their customers, derive insights, activate campaigns, identify leads and measure results. All they have to do is partner with the right organisations at the right point in the customer journey. And I’ll look at the challenge that presents in my next post.