August 21, 2017 — The segment is still in its nascent phase but the roll up of marketing attribution firms in the automotive retail space has started. Late last week, Semcasting acquired TransparencyAI, a data analytics firm which has come on strong in the last year helping publishers measure the effectiveness of their digital advertising platforms.
Transparency is the former Minneapolis-based Visible Customer company, once owned by the Minnesota Automobile Dealers Association. Jon Lamb invested in the company a couple of years ago, changed its name and focus last year and brought on Darren Haygood, a former Dealer.com executive, to be president.
Lamb, as will the partnerships Transparency has with third party publishers along with all of the services they provide will continue with Semcasting, a tech firm in North Andover, MA. The company, founded by Ray Kingman, focuses on IP targeting which is identifying customers based on Internet-protocol addresses — instead of using cookies or pixels — and matching their online behavior with offline transactional behavior.
The acquisition makes sense for Semcasting, which did not have a direct play in automotive, but now will have a strong presence with several of the online publishers such as CarGurus, Autotrader and Cars.com. There may be other announcements regarding other platforms using Transparency’s solution forthcoming in the next few weeks. Transparency has used Semcasting’s address anonymization capabilities the last several months. The branding resulting from the acquisition should be rolled out by the end of August or beginning of September, Lamb tells TBR.
Single Source Attribution vs. Multi-Channel Attribution
The acquisition is important for a few reasons. First, is the conversation that has erupted over the last year among automotive retail marketers about attribution — which marketing effort or online publisher generated the sale, also known as “Last Click” or “Single Source Attribution.” The thinking is whichever platform or media outlet the consumer clicked on last before buying the vehicle is the platform that should get the credit for the sale. The issue has been brewing for years. The challenge is customers visit multiple sites multiple times before purchasing a vehicle. Trying to ascribe full credit to one is nearly impossible.
Digital third party platforms such as Cars.com, Autotrader, CarGurus, and others, have come under significant pressure the last 18 to 24 months from dealers to prove the value of their traffic. Much of that pressure comes from the auto retail industry’s focus on single source attribution — especially at the Tier 3, or dealer level. And that pressure has led to the creation of a cottage industry of sorts focused on attribution. Companies such as Transparency, Clarivoy and Vista Dash have popped up within the last two years with the goal of helping dealers and online agencies and publishers better define their value while moving the focus from single source to multi-channel attribution.
AutoHook, which was acquired by Urban Science two years ago, was one of the first attribution companies, partnering with companies to create customized incentive programs.
Transparency conducted studies for thousands of dealerships that had listed inventory as of September 1 on either of Cox Automotive’s two third party sites — Autotrader and Kelley Blue Book — and how many consumers looking at specific inventory on those sites actually bought a vehicle from a specific store.
Clarivoy also conducted a study with Cars.com earlier this year evaluating 100 dealerships using Clarivoy’s multi-touch attribution tracking system. The study showed Cars.com was directly influencing — if not creating sales — at a higher level then dealers realized.
TrueCar, however, has built its business model on last click attribution. The debate over attribution is going to get interesting as TrueCar and the push their definitions of attribution. Brian Pasch, who created the Vista Dash solution that is now run by Dan Moore (a former Vin Solutions executive) is driving much of the conversation, and is working to develop an industry committee to establish standards for analytics and attribution. He’s also behind a conference focusing on that topic in November in Florida.
Google’s Walled Garden
A second layer of the attribution conversation is what role Google is playing. Google recently unveiled a product it’s calling “Google Attribution.” On the surface, the solution sounds like it should be welcomed development for online publishers because it is a shift from Google’s previous last click attribution model to a multi-channel model. It provides analytics, AdWords and DoubleClick reporting.
The problem, though, critics (such as Transparency and Clarivoy) say, is that Google is a vendor just like the other publishers, and shouldn’t be measuring itself. It’s analytics likely will downplay the effectiveness of third party publishers.
Stay tuned — this conversation may have a long shelf life.
TBR’s quarterly and annual reports and analysis of the automotive retail vendor M&A and investment market are available to subscribers of The Banks Report:
2017 Mid-Year Auto Retail M&A Report
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