TV And Auto Marketers Enjoying Each Other's Company
All around auto marketers are displaying plenty of mettle in showing their metal. And a resurgence there has network executives ecstatic. A report this week augured robust spending not just this year, but into 2013. Along that road, the Moody’s forecast suggested the category might drive a soaring upfront market this spring.
The Moody’s bullishness followed an exceedingly favorable profile Sunday on “60 Minutes” about Chrysler’s seemingly humble, but highly effective chief Sergio Marchionne. Yet, the CBS show at least partly turned the piece into a metaphor about the resurrected domestic car business.
“One of the most encouraging signs in the U.S. economy over the past year has been the resuscitation of the American automobile industry from a near-death experience … and in many ways the most dramatic recovery has been Chrysler’s,” "60 Minutes" said.
Whether Chrysler is in the pole position or not is immaterial at the networks. They’re just enjoying the money flowing in from Detroit, though GM reportedly pulled some some back early this year as it switched agencies. They may not like health care reform, but government funding helping save Chrysler and GM was surely popular.
Also, some Japanese manufacturers that had to reorient themselves after suffering from natural disasters last year in their home country appear back in investment mode.
“60 Minutes” cited Chrysler’s marketing several times. Perhaps most relevantly for sales departments (at both networks and local stations) is the April re-launch of the Dodge Dart, which marks an initial collaboration between Chrysler and Fiat, the Italian company also run by Marchionne.
Fiat has been running ads with Charlie Sheen. Clearly, a similarly large marketing investment will come behind the Dart, which is said to cost under $16,000 and get 40 miles to the gallon.
“Mechanically it’s outstanding,” Marchionne said.
Moody’s projects U.S. auto sales will reach 14 million-plus this year, more than a 9% jump over 2011. That will fuel ad budgets, where much of the dollars will focus on two aspects: gas mileage as prices rise at the pump and all these new-car entertainment and telematics systems.
So, in a twisted way, networks could benefit from that $4 a gallon. Foresight Research conducts an annual “Automotive Marketing Communications Study” and found in 2011, about 52% of new car buyers said fuel economy influenced their decision. That was up from 42% in 2010.
Moody’s expects a significant number of new electric and hybrid models to be introduced in 2012-2014.
(Customers may care about the environment, but they appear to be voting with their pocket books. Only 12% in 2011 said environmental or green factors played a role in their decision -- the same as the year before.)
Overall, Foresight found TV ads remained the fourth-most influential form of marketing communications in influencing car buying, the same as in 2010. TV understandably trailed only more personal interactions: dealership experience, the Internet and brochures.
While many consumers go to the Web simply for price comparisons, Foresight CEO Steve Bruyn said automakers are making increased investments in the look and capabilities of their sites as some consumers warm to opportunities to virtually design a car. “We are finding the acceptance and usage is getting greater and greater,” he said. “The messages being conveyed over the Internet have improved over the years.”
As for brochures, they too are going digital, where Bruyn said last year there was an uptick in downloading them from the Web.
Among the 14 marketing channels Foresight looked at in terms of influence, magazine and newspaper ads topped billboards and radio ads. Social networking was 13th and motorsports marketing finishing last.
(The latest Foresight data was derived from an online panel of 7,850 people who bought a new car or truck between October 2010 and October 2011.)
Social networking has grown, but Bruyn said it still lacks in ability to communicate aspects “like quality, customer satisfaction … customer specifications and pricing.”
Auto marketers surely will continue to upgrade social media initiatives and rely on TV ads to drive traffic to them.
Just another reason, it seems hard to believe auto spending should make so much as a pit stop. If it does, it shouldn’t last long.