When the chips are down: how marketers can surmount the chip shortage

Worldwide automotive vehicle production has hit a serious speed bump. An overdetermination of factors – supply chain complications emergent of the pandemic, frosty US-China trade relations, competition for components across sectors of the economy – is driving a global chip shortage. 

The real effect for OEMs is startling: the Society of Motor Manufacturers and Traders (the largest trade association for the UK automotive industry) recorded a fall in new vehicle production of -40% in October and November 2021, and a further -28% in December.

The importance of “chips” – the semiconductors essential for powering your graphics card, gaming console, VR-headset, laptop, smartwatch etc. – for the operation of modern vehicles cannot be underestimated. The average car produced today uses between 1500–3000 chips (as part of brake sensors, emissions control, power steering and airbag systems, entertainment and navigation consoles …).

For consumers, those innovative features which rely on semiconductors aren’t simply a “nice to have”: they’re a differentiator that pushes a model or brand ahead of others on the market. “Getting from A–B” might still be the brass tacks of vehicle ownership, but cars that can also double as a reliable mobile office, entertainment centre, holiday-enhancer or even living space holds huge appeal for modern consumers.

While the semiconductor shortage is driving a global productivity slowdown, on the buyer-side of the equation post-pandemic green shoots are beginning to emerge: as per the ING’s 2022 car market outlook, “[some] recovery did materialise in 2021 … sales volumes in 2021 have remained just over 10% below the 2019 levels.”

The acceleration of electric vehicle adoption is behind at least some of that resurgence in consumer interest. According to the SMMT “more electric cars were registered in 2021 than in the previous five years combined.” (BBC News) So for automotive OEMs, the mid-term outlook is promising: as the global economy continues to heal and consumer spending power climbs back to pre-pandemic levels, the confluence of policy and social macro trends will encourage greater adoption of EVs. A win for the planet, the consumer, and a win for the manufacturer too.

But in the short-term, those supply chain headwinds are making on-the-ground sales conversations even trickier and caveat-laden than ever before. Put an increase in consumer interest together with a decrease in production capacity and what you get is rising costs (for both new and used vehicles), and long wait times.

While supply chain logistics remain the jurisdiction of the manufacturing and executive arms of an OEM – the chip shortage holds implications for marketing teams too. Charged with capturing, nurturing, and converting consumer interest into action, the lengthening of the buyer’s journey by external, broadly contextual factors is a novel challenge. Marketing a car that a customer can drive off the concourse tomorrow is a very different prospect to marketing a car that a customer can only have the keys to in six months’ time.

For marketing teams facing an elongated “messy middle”, the chip shortage brings about a different kind of paucity: namely, a content shortage.

Imagine it this way. I’m a car owner ready to trade my 2015 model in for something decidedly more 2022. I’ve spent a month firing out queries into search engines, comparing feature lists and costs, trawling through OEM websites, and I’ve narrowed the field to three models. In each instance though, tentative expressions of interest reveal that there will be a delay. Options A and B ask me to wait 3 months for my vehicle, Option C six months. Suddenly, I’m at a crossroads: I can wait, but I need to be sure that the wait is worthwhile (my 2015 trade-in is losing value by the week, after all). I need to be sure that whatever way I choose to go, I’ve made the right choice.

Approaching that “zero moment of truth”, a consumer needs a different kind of content to what they’ve seen so far. Your consumer is now well-educated in the specs and benefits and has likely offered a precis of their purchase rationale to anyone with the time to listen. Now, they need to make a leap of faith. For a marketer facing a consumer at this delicate point of the conversation, the removal of any doubt is imperative. And the best way to do that? UGC.

It’s an often-quoted line that 92% of consumers trust User-generated Content more than content created by brands (Nielsen). And the case for UGC in automotive marketing is well-established too: brands including CUPRA, Porsche, Mazda, Mercedes-AMG are using UGC to boost engagement and conversion across their site.

The psychology underpinning the fruitfulness of UGC for brands can be summarised simply: real people trust real content. But the mechanisms at work are more subtle, and it is this subtlety that a marketer facing a content shortage needs to lean into. An educated buyer has turned what you’ve told them into knowledge enough to inform a purchase decision, now it’s time to show them what getting the show on the road will really feel like for them.

Authentic customer-created and earned content stands head-and-shoulders above all else on that front. And the kicker? It’s content that a brand doesn’t need to spend the resources and energy-producing themselves (if only semiconductors could be user-generated!).

At StoryStream we’re proud to partner with the world’s biggest automotive brands. Whether it be by managing the usage rights for user-generated content, curating content for conversion rate optimisation across brand websites, or integrating earned media and UGC into email outreach and nurture strategies: surfacing the power of customer and expert testimony to new prospects as they move through the decision journey is where the value of our partnerships really comes to life.

Here are our five top thought starters (with some examples) for how to start engaging your prospects through earned media and UGC:

  • Integrate earned media modules onto your site to build trust through expert and user reviews. EMMs are particularly effective at increasing engagement and conversion across product pages and campaigns, as in this example from Hyundai: “What’s everyone saying about the Hyundai IONIQ 5?” (Full case study here.)
  • Put the “social” back into Social Media: boost organic engagement by 33% by reposting user-shared content to your brand channel (check out the NYX Cosmetics/Instagram case study). Increase click-throughs on paid ads by 30%, and reduce cost per acquisition by 30% by using rights approved UGC in your campaigns.
  • Editorial: engage audiences with a beautifully curated digital magazine, or create unique and compelling experiences through content (see “Volvo Saved My Life”, and Porsche’s EV-focussed hub “Electrifying Stories”).
  • Email: keep your prospects engaged (and your brand’s promise front-of-mind) by integrating personalised UGC into email campaigns. With VW Group, we’ve seen click-through rates increase by up to 26% across campaigns powered by UGC. In a marketing discipline that rewards marginal gains (typically through A/B testing subject lines, CTA button colours etc.), connecting your UGC to your email strategy – using it to offer-up content tailored to the user’s interests or last action – can represent a real game-changer.
  • Rethink the link in bio: LinkStream – StoryStream’s answer to the underwhelming “menu of links” experience familiar across social platforms – is making waves in the eCommerce world already (check out Christophe Robin’s shoppable link in bio, for example). The opportunity for auto brands to use earned media and UGC whilst making the most of the limited real estate offered by social networks (Instagram, TikTok especially), connecting in-market prospects to meaningful actions for your brand, is there for the taking.

If solving for the content shortage through authentic, trusted content is a priority for you, drop us a line now and we can walk you through the StoryStream platform.

Photo thanks to Alexandre Debiève on Unsplash