This article was originally featured in Marketing Dive

The emergence of electric vehicles (EVs) has been a story of both rapid growth and stubborn obstacles. Indeed, according to Urban Science™, a Detroit-based automotive consulting and technology company, combined sales of plug-in hybrid EVs (PHEVs) and hybrid electric (HEVs) increased 31 percent between 2023 and 2024. According to Urban Science, one in six vehicles sold by the end of 2023 featured an electrified powertrain; by April 30, 2024, that figure rose to about one in five.

Not surprisingly, automakers are responding to elevated consumer interest in EVs. Once a sector dominated by Tesla, traditional and emerging original equipment manufacturers (OEMs) are dramatically expanding the type and variety of EVs they offer for sale. Despite this progress, however, EV sales are challenged by a host of factors – including everything from traditionally high sticker prices compared to gas-powered vehicles to concerns about the availability and quality of high-speed public charging infrastructure.

Audience uncertainty diminishes marketing ROI

OEMs, auto dealers along with their demand side platforms (DSPs) and agencies face another hurdle in the growing but increasingly competitive EV market: how to pinpoint and market to consumers with a likelihood of purchasing their cars and trucks. At its core, the problem for OEMs, dealers and their marketing partners is a lack of quality audience data.

“Modern EVs have only been around for so long. It’s such a new consumer product for marketers to merchandize,” said Scott Clark, Director of Product Development at Urban Science, which serves OEMs, dealers, and the advertising technology companies that support them. “Advertisers are challenged by how they identify EV intenders in an adtech supply chain that can be more noise than informative at times.”

In the absence of good data, OEMs, dealer networks, DSPs and their agencies must rely on proxy data and methodologies. One approach is to simply focus marketing budgets regionally in places like New York and California, where lots of EVs are sold. But that is hardly a precise strategy for identifying potential customers and maximizing the return on advertising spending.

Another status quo strategy for identifying households interested in EVs is to create buyer profiles that can be used to target digital marketing initiatives. But the strategy is inherently limited because the source data used to build profiles is incomplete and not EV-specific. It’s difficult to create a good EV model without EV data. “There’s a lot of bad modeling being done,” said Carl Matter, Urban Science’s Director of AdTech Performance “For example, data providers that have observed only a portion of the population will use inferential statistics to model up to 100 percent and make claims about the entire population.” Or, to put it simply, inferential statistics are used to make up for the fact that data providers don’t have comprehensive EV sales data.

Sales data as a foundation for targeted marketing

Unfortunately, targeting based exclusively on proxy data is limited in its capacity to identify people who are in the market for an EV both because of inadequate data and a lack of analytics able to pinpoint trends and opportunities in large data sets. There is undoubtedly value in demographic and geographic data and inferential statistics. It’s just that there is more predictive power and nuanced understanding of audiences in leveraging past purchase data.  For instance, Urban Science’s Matter points out that an in-depth examination of sales data reveals that preconceptions about EV interest among truck owners are simply wrong.

“We’ve seen a tremendous uptick in truck owners adding EVs. They’re not getting rid of their trucks, they’re still very loyal to their trucks, but they add an EV as well,” said Matter. “That wouldn’t be conventional wisdom to a lot of people. It’s certainly not to me. Part of the reason data is so important is if you’re going to spend your dollars in this space where resources are at a premium, you must get your audience right.”

It’s impossible to overestimate the importance of detailed and localized purchase volume data combined with sophisticated analysis to inform effective short and long-term marketing campaigns. For instance, Urban Science leverages data, crafted from decades-long relationships with OEMs, to identify households across the country most likely to purchase a specific EV model or brand. It all starts with quality data.

“We know that historical sales data has the most predictive power for future sales,” said Matter. “That’s our advantage. We have a detailed understanding of the who, what, when, and where of each purchase. Having sales volume data down to an individual level it’s an essential component of efficient targeting strategies to empower greater precision and personalization”

Making the most of good data

This kind of audience data is helpful to marketers on its own but can become even more valuable when it’s augmented with intelligence. For example, Urban Science’s algorithms analyze the data to come up with buyer propensity scores.

“There are patterns in the data that you and I wouldn’t be able to see with our naked eyes, but that finely tuned algorithms can pick up,” said Clark. “Similar to how Netflix predicts what someone may watch next based on past viewing habits, our machine learning techniques predict a household’s likelihood to buy a given vehicle segment, brand or even model based on past purchase behavior. For example, households we predicted to be in market to buy an EV did so at a rate 5x higher than households we deemed had a lower likelihood. EV advertisers can benefit from these analytical capabilities in their campaigns today.”

Robust and continuously updated data promotes accuracy, efficiency, and accountability that EV marketing dollars are having an impact. For instance, because Urban Science receives daily sales data, it can continually refresh, validate and improve the performance of their predictive models.  Even so, it’s still important to measure whether the targeting delivers on the intended goal.

Urban Science has a measurement product that enables one-to-one deterministic matching of media exposures to sales. “Measuring the impact of your ad dollars on sales conversions is table stakes,” said Clark.  “With the right data and analytics partner, you can reach EV intenders and validate performance by measuring when they convert.”

The EV market is in a moment of great change, uncertainty, and opportunity. Navigating it efficiently and successfully will require savvy marketing targeted at receptive consumers. The foundation of those efforts is comprehensive and detailed sales data.

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