How CarMax, Cars.com, and Autotrader Are Pivoting Their Ad Strategies

Pathmatics ,  April 19, 2022

While drivers feel pain at the pump, record high new and used car prices only add insult to injury. According to a CarFax report, listing prices for used cars in January 2022 were up 40 percent year-over-year. The ongoing global microchip shortage is primarily to blame. Auto manufacturers cannot get their hands on enough chips to keep production lines running, contributing to the sharp uptick in used sales.

The biggest players in the used car marketplace have been tailoring their messaging to reluctant buyers and eager sellers. Today, we’ll look at CarMax, Cars.com and Autotrader to analyze how these brands have pivoted their digital strategies to account for the moment used cars are having in this inflated market.

CarMax Leverages Instant Offer Feature to Entice Car Sellers

CarMax, the largest retailer of used vehicles in the U.S., funneled roughly $45 million into its digital campaigns from January 2021 to February 2022. The online car retailer leaned into video creative to convey its messaging and cheeky tone.

CarMax targeted its digital campaigns to sellers, acknowledging the pain-staking task of selling a used vehicle on the open marketplace or the stress of haggling with seedy used car salespeople. One video creative showed a car with a “for sale” sign displayed in its window sitting untouched through an alien invasion and the collapse of human civilization. It’s a quirky ad, no doubt, but perhaps a bit too cynical when you consider that used car inventories are at an all-time low. There’s never been a better and arguably easier time to sell a used vehicle.

Additionally, enticing buyers with curbside delivery and online buying options may have been a fool-proof strategy at the height of the pandemic, but will buyers place as much stock into these benefits now that COVID is receding into the back of peoples’ minds?

CarMax threw a lot of its weight behind streaming platforms. In December 2021 alone, the brand channeled over $4.3 million into OTT campaigns. Although CarMax invested a hefty sum in OTT spend (23 percent), they allocated the majority of their budget towards Facebook (30 percent) and Instagram (25 percent).

Cars.com Promises a “Match-ical” Car Buying Experience

While Cars.com doesn’t hold a physical inventory, it does provide shoppers a way to find new, used and certified pre-owned cars at several different car lots in their area. Their website also offers a “Sell My Car” feature that allows users to create an online listing.

From January 2021 to February 2022, Cars.com invested more than $9 million into its digital campaigns. While the brand doesn’t have the competitive edge CarMax offers with its own used car inventory, Cars.com positions its intuitive car matching system as their key differentiator.

Their fun video campaigns play out like a romantic comedy, featuring a catchy slogan and sultry narration, “it’s match-ical”. With over 50,000 cars added to their inventory every day, Cars.com is confident they can connect anyone with their 1 in 4 million car match.

When reviewing spending trends during this period, some interesting points jumped out. The brand bet big on Mobile Display ads in March 2021 ($489,500), when Cars.com launched a 2021 Hyundai Venue giveaway. Spikes in Desktop Display spending in March also correlated with the car giveaway. Facebook spend remained consistent throughout the year until peaking in February 2022 ($557,000). OTT spend was low but remained consistent until dropping to zero by February 2022.

Autotrader Taps SNL star, Kenan Thompson, To Capture Consideration

Like Cars.com, Autotrader doesn’t hold a physical inventory or own the cars listed on its website. Instead, it provides a way for customers to shop for new and used cars across several different car lots in their area.

From January 2021 to February 2022, Autotrader invested nearly $22.5 million into its digital ad campaigns. The brand landed a deal with Kenan Thompson for a video campaign where Kenan, having a slightly codependent relationship with his smart appliances, raved over the benefits of buying on Autotrader, including curbside delivery, home test drives and virtual appointments with dealers.

Like CarMax, Autotrader leveraged humor and prodded at the pandemic to capture their audience’s consideration. We typically see the most tempting incentives for new cars in October, November, and December. Year-end sales events, three-day holiday weekends such as Memorial Day and Labor Day, and the end of each month have traditionally been the best times to get great deals on a car. We saw parallel trends in Autotrader’s spending habits in 2021. The brand started 2021 off on a high note with an estimated $1.2 million in Desktop Video spend in January to push new year’s savings and keep the car buying experience as close to home as possible due to the pandemic.

Additional spikes in spending correlated with summer sales events and the holiday season. The brand invested a fair amount of their budget into 2021 holiday OTT campaigns, with over $4.9 million funneled into streaming platforms during the holiday season. Altogether, spend share was split between Desktop Video (36 percent), Facebook (30 percent), and OTT (22 percent).

Industry experts predict that it will take well into 2022 (or beyond) for the used car market to stabilize. In the meantime, used car retailers can continue to appeal to buyers and sellers alike by pushing a convenient, comfortable and hassle-free online car buying or selling experience. Features like curbside delivery, home test drives, and instant offer tools to help people sell their used car for a competitive price will keep these brands top of mind while the market is hot.

To learn more about the data behind this article and what Pathmatics has to offer, visit www.pathmatics.com.