Internet Shopping Shoots Holes in the Purchase Funnel

(MoneyWatch)  NEW YORK -- Automotive marketers have been slow to recognize that Internet shopping has shot the traditional "purchase funnel" full of holes.

"Until recently, the auto business and consumer package goods were the two holdouts from the digital revolution. We've been stragglers in the digital age," said Chrysler's Deborah Meyer, in a Sept. 22 speech here to the MIXX Conference and Expo, a confab for online marketers.

"Our consumers ?€" those nice folks that buy our automobiles ?€" have made us change," said Meyer, vice president and chief marketing officer.

The purchase funnel starts with "Awareness" at the top, and works its way down through "Favorable Opinion" and "Consideration" to "Shopping" and ultimately "Purchase," at the narrow end.

A big part of the market research industry was created to monitor, measure and analyze the purchase funnel. Within the industry, the classic example is the Allison Fisher International Purchase Funnel model, which through survey data actually assigns estimated numbers of consumers at each step in the funnel for a given brand.

A classic example might be the Yugo brand, which had high awareness but low favorable opinion. Therefore, few people made it down into the lower end of the funnel. Another classic use of the funnel is that the car companies address the upper funnel with coast-to-coast ads designed to boost awareness and opinion, while dealer groups advertise the best deals locally, to people who are already primed to buy their brand.

The trouble with using that model to manage your messaging is that it's too linear. In theory, consumers only enter the funnel at the top. They have to have their tickets punched at every stage, before they precipitate out at the bottom as actual buyers.

But with Internet shopping, consumers have much greater control over where they jump and out of the funnel, without following the "correct" order. The upside of the Internet is, the car companies can use Internet marketing to more precisely target people who are already close to making a purchase, instead of wasting money on shotgun-distributing messages to people who aren't interested.

"Advertisers talked at consumers. Sometimes it stuck. A lot of times, it bounced off," Meyer said.

To be fair, the Allison Fisher guys are big advocates of targeted messages. And they would argue that logically, no matter at what stage shoppers choose to make themselves known to the car companies, you have to be aware before you can have an opinion, you have to have a positive opinion before you consider, etc. etc.

Meyer said that today, online shoppers typically start with a search engine, which likely takes them to a shopping site like edmunds.com that already lists all the brands that offer a particular product segment.

That makes building high-level awareness a waste of money, she said. "Awareness is overrated," Meyer said.

Rather, Chrysler is putting more resources into generating positive opinions. "That's what's going to put us on the short list."