Why Volkswagen Australia’s CMO is investing into programmatic

Automotive brand shares its programmatic journey so far and why data lies at the heart of its importance

The valuable data delivered through programmatic technology and the ability to use it to improve customer experiences lies at the heart of Volkswagen Australia’s decision to invest into programmatic buying.

Speaking at this year’s Programmatic Summit in Sydney in conversation with Mediacom’s chief digital officer, Willie Pang, the automotive brand’s GM of marketing, Ben Wilks, took the audience through his experience rolling out programmatic buying in the organisation, including business objectives, structural ramifications, its wider applications and measures of success.

Volkswagen partnered with Mediacom on programmatic buying unit (PBU) last year in an arrangement that see the media agency providing a range of services, while giving Volkswagen ownership of data.

Wilks saw Volkswagen’s programmatic journey as part of an ongoing quest to embrace innovation. He positioned programmatic ultimately as a data capture game that leads to better outcomes and value for customers, while delivering strong efficiencies and lead conversions to the brand.

“The end game [for programmatic] is much bigger than advertising potential – it’s about harnessing all the data available, that we hold and that is held by actions we all take in the process of looking for a new car, and being able offer a better experience to customers,” he said. “It’s then how we translate that online into the offline experience and a better service for a customer as a result of the things they’re able to tell us about what they’ve been doing so far.”

With anything new like programmatic, the temptation for marketers is to wait for “to design perfection”, Wilks said.

“But that’s the exact opposite to what we know about tech divergence,” he told attendees. “You need to get moving, and you need to try new things. I don’t want to say fail fast... but you need to leave room for innovation as brands, and be able to make that move.”

Wilks described programmatic as a test-and-learn game, and noted taking the first steps into programmatic were worth it in order to gain the initial round of data insights. These then informed Volkswagen’s second round of programmatic activities and drove even better media optimisation and effectiveness.

“Our results at first were OK - not massively worth all the talk and investment - but in the second phase, as we were able to use the data, we started to ramp up,” he commented. “We expect that to continue this year, so we’ll continue to push our investments. Like everything, you have to just get started.”

Likewise, it’s important to look at how that data is used. And to do that, Wilks flagged the importance of involving the CIO and IT infrastructure teams.

"There is nothing more important to us than our customers' data and there is a duty of care as a corporate how you manage it," he said.

Wilks said Volkswagen’s initial media brief was focused on driving more leads into dealerships.

“We were seeing a lack of conversion possibility, and wanted to do it more economically,” he explained. “We’re conscious of the effect of consumers in-market; Google’s path to purchase and percentage of people in-market to buy now, versus in two months, or six months. It was about having a solution to be always-on for all those people.

“We not only wanted to drive activity on our website, but take advantage of what’s happening online to reinform activity.”

Wilks admitted taking the rest of the organisation on the programmatic journey was a challenge he faced internally, not least because of the lack of knowledge around new technologies and processes. His team’s willingness to experiment helped overcome these challenges.

“A big part of the process is to start getting ourselves as marketers and our teams around all these concepts and take advantage of the myriad ideas thrown at us by agency teams and all tech businesses in this sphere,” he said. “We had to make sense of it and translate that into something that generates a useful outcome.

“If we can get involved with programmatic and divert some budget, and it gives us more leads and sells more cars, or gives customers a better experience in some way, that’s an obvious benefit. The story is about the benefit in the end.”

Wilks has also adjusted Volkswagen’s team structure from a campaign-based approach, with people working on big campaigns, then digital, CRM and so on, to one where digital expertise is provided more as a service across brand management teams looking after specific products.

“Brand managers then actively fight for every opportunity to take advantage of our always-on budget to push their product,” he said. “It’s meant the opportunity to have knowledge spread through teams at an interwoven level.”

Core to Volkswagen’s brand approach and messaging is building an emotional engagement with prospects and customers, something programmatically is well on track to deliver, Wilks continued.

“Part of our job is about creating mass awareness and emotional response – it’s important for a person looking at a new car that their peer can back up their choice,” he said. “Our job is to engage an emotional response even if that doesn’t directly lead to a specific action.

“Where I see potential is being more clever about how we engage that emotional response. If at any stage of the funnel, we can grab you and give you a more interesting message that suits where you’re at and what you’re about to do... we can be smarter about how we reach all those people and still generate a decent emotional response.

“If we are clever about who gets that emotional response, then perfect, there should be a mass stampede towards programmatic in the next five years.”

In terms of measuring success, Wilks said Volkswagen needed to set up a structure from the outset to measure programmatic’s impact. To do this, the team developed a ‘results and measurements’ meeting every couple of weeks, looking at what was happening and why, as well as what to optimise.

“For example, the first metric of success at the end of 2015 was a drastic increase in test drive leads of 400 per cent – although that’s not that many test drives to start with and didn’t end up with that,” he said. “But it was interesting to know we could increase intensity of our test drive messaging and even a small amount of test drives is hugely enormous because they are much higher conversion.”

Dynamic creative is another important part of the puzzle, which Wilks described as “deceptively simple”.

“The challenge is informing your own teams, and making sure you have enough horsepower to drive what needs to happen,” he said. “You’re still putting messages out that have to be in line with brand expectations, but also have to change easily. This comes down to team structure plus how the agency works with you so you can sustainable work with dynamic creative.”

Wilks also cited a 50 per cent reduction on costs per lead thanks to its use of dynamic creative.

“The learnings we have already have us excited about other possibilities,” Wilks said. “Everyone in automotive, or any industry, will sense the importance of using and collecting data responsibly in a way to change the user experience. The more quickly you start, the more quickly you can move, then build advantage and stay ahead.

“The ultimate strategic outcome is bridging the gap between online and offline.”

Pang added programmatic is not about more efficient media buying, it’s about how to connect advertising to a brand’s CRM, CMS, and the bricks-and-mortar experience.

“If we can do that as agencies, we will change the game,” he said. “If we don’t, we’re at risk of consolidation or secondly, for media businesses, we end up at the end of value chain for distribution.”

Follow CMO on Twitter: @CMOAustralia, take part in the CMO conversation on LinkedIn: CMO ANZ, join us on Facebook: https://www.facebook.com/CMOAustralia, or check us out on Google+: google.com/+CmoAu

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