TREND TRUTH
Cash for Clunkers Aids Auto Makers
Using innovative mining techniques, FGI has been scanning social media sites to unearth consumer insight in a variety of subjects. Michael Jackson’s recent death dominated the discussion, understandably. But FGI also found out this month that social media sites are abuzz with consumer talk about the “Cash for Clunkers” program. Even then, the frequency with which social media users talked about the term depended on demographics. Middle-aged people and Hispanics were less likely to be aware of the program, whereas other groups showed greater interest.
Google Trends: “Cash for Clunkers” is “Volcanic”
“Cash for Clunkers,” for those who are unfamiliar, is a government stimulus program that promises incentivies to trade in an inefficient “clunker” for a new, more fuel-efficient vehicle. News about and discussions involving this term have had a huge impact on social media. FGI Research noticed an enormous spike in blog traffic surrounding the subject, and Google Trends rated the term “Cash for Clunkers” as “Volcanic,” meaning it earned the top spot on their most-frequently-searched list. Although this trend is spreading rapidly on the internet, the question for automakers is: Is this social media trend really “volcanic” for all consumers, or do demographics make a difference?
Demographics: Look Who’s Talking
FGI Research turned to SmartPanel panelists to uncover who, exactly, was behind the demonstrated interest in “Cash for Clunkers.” We asked those surveyed if they were aware of the program. 82% of respondents said that they had heard of it, but we discovered that awareness depended on demographic factors; for example, 70% of Hispanics said they had heard of this program, as opposed to 84% for non-Hispanics. There was also a significant drop in the awareness of people ages 31-34 (57%) when compared to the average respondent awareness (87%). Those between 35-44 and over 65 demonstrated the highest awareness of the program. More research into social media use by these demographic groups could reveal if they are also responsible for the spike in Internet traffic of the subject.
Who Will Use the Program?
The study also included questions about who might benefit from “Cash for Clunkers.” Our results suggest that the future looks brighter for the auto industry. Only 12% of respondents said that they had bought a car in the past six months, but 23% said that they planned to buy a car in the next six months. Of respondents who had not bought a car in the past six months, and had not heard of “Cash for Clunkers” before taking the survey, 17% said that they were more likely to buy a new car after learning of the program. It’s easy to see what a tremendous impact this government program has on the American consumer in terms of new car purchases. The chart below illustrates consumer sentiment on the subject of “Cash for Clunkers.”
Actionable Insights
We can take a number of insights away from this research. First, social media has demonstrated a powerful influence on consumer awareness of a subject, and a powerful ability to reflect consumer interest in that subject. People get information from social media, and they also express their views through social media, which means there are opportunities to use social media for marketing as well as research into marketing. FGI’s independent study suggests that “Cash for Clunkers” has great potential to positively impact auto purchases this year, yet only if all demographic groups are aware of it. Depending on who uses social media, companies could use it as a tool to reach every demographic effectively, inform them of the program, and so benefit from online marketing. More research into the demographics of social media use could further support those efforts.
Next Steps You Can Take
Survey Methods
Date of Study: 7/31/2009
Total Responders: 295
Sample Source: FGI SmartPanel
August 27th, 2009 at 1:12 pm
I couldn’t use Cash for Clunkers because I would have no way to pay for a new car. I’m sure there are a lot of others who are in the same boat. Even the $4,500 incentive wouldn’t help me or them.
August 27th, 2009 at 1:22 pm
In the area where I live, there was a lot of information about “Cash for Clunkers” on local and network TV. Numerous auto dealers had great sales during this program. However, it seems that the program ended almost a soon as it began!
August 27th, 2009 at 2:37 pm
cash for clunkers is great fore some people but didn’t really do anything for me
August 28th, 2009 at 5:15 am
It definitely is boosting the car industry in term of sale. But, at the same time, it is such a “waste of money” move by the government. We can call it a Spending Frenzy. Why? First, clearly, the environment issues will not be solved by “Cash for Clunker” program. Gasoline-fueled car will continue to damage the environment. Second, this program is the “good” way to contribute more to our nation outstanding debt. Third, during the recession, trading in our cars and buying new ones do not make any sense since there are many people are suffering and desperately in need for help.
February 15th, 2010 at 4:04 pm
What a farce! People who used it to buy a new car were going to buy a new car anyway. It was an effort to buoy up the Big Three, who still face big obstacles. They were just able to unload a large amount of the 2009 models that littered their lots. With the exception of Ford, GM and Chrysler are now run by the Fed. Again, what a farce!
February 19th, 2010 at 4:54 am
Thank you for the excellent article. Best thing I read all day. Look forward to reading more from you in the future