Industry Watch: The Web Takes the Wheel
In the race to win customers' hearts and minds, automakers are increasingly turning to the Web to set themselves apart from the competition. Detroit has made online media and marketing an integral part of its promotional activities, deploying games, streaming video, podcasts, blogs, short films, and other forms of new media ranging from the sublime to the ridiculous.
The ultimate goal is to generate buzz about products -- and draw Gen X and younger consumers into the purchasing funnel. The interactive marketing trend is young but building steam, auto industry watchers say.
"Whether [automotive marketers] do direct or interactive marketing, it's achieving economies of reach manufacturers are looking for," says Mike McFall, industry consultant and president of Veretech Inc., which licenses BlackBook Online. "The new media does have enormous reach in getting eyeballs [on sites], but the impact on the marketplace is still fairly limited."
Big Web Bucks
Despite protests of being cash-strapped, car manufacturers are shelling out for Internet real estate. Major automakers spent $177,099 million on Internet marketing in the first three quarters of 2005, up from $165,819 million in the same period in 2004, according to TNS Media Intelligence.
The Chrysler Group spent $34.8 million on interactive media in 2004 out of $1.5 billion total, up significantly from a year earlier, TNS reports. That compares to the roughly $60 million shelled out in 2004 by General Motors, the biggest category spender. In nine months, gm had already poured $64.9 million into Internet advertising.
To be sure, Internet-driven interactive marketing is gaining converts who are taking greater creative risks. Consider the unconventional way Chrysler launched the 2006 Jeep Commander SUV in 2005 with "The Mudds," Jeep's ongoing viral marketing campaign.
Literally mud-covered, The Mudds are Chrysler's online sitcom family, described in Chrysler spin as an "active, well-adjusted family of five that enjoys an adventurous Jeep lifestyle." The Web site (wearethemudds.com) includes emblematic contests, driving visitors to dealers to win the new Jeep SUV.
"It's a time of rapidly increasing experimentation for automakers," says Jeff Bell, group vice president for Chrysler and Jeep. "One year ago, no question, putting video onto an iPod was silly, but now people do it. So much is changing so fast."
Bell, who calls himself "a Netizen, or citizen of the Net," easily endorsed The Mudds campaign. The viral campaign continues this quarter, after which it will be evaluated. After all, the proof is in the sales data.
So far so good for Organic Inc., Chrysler's interactive agency. Organic conceived The Mudds as an evolving Web-based show. Launched last October, the story unfolds via Webisodes, biography pages, screensavers, wallpapers, and even a blog, posted by daughter Victoria Mudd, so that viewers can follow daily family adventures. The first Webisode attracted 500,000 unique visitors, who watched for an average of 1.47 seconds, Bell relates. That turns into 2.1 rating points, worth many millions. Compare that to an average 15- to 30-second TV spot, costing upwards of $300,000, which viewers might tune out.
The Mudds represents the first commercial integration of virtual geo-caching, fully integrated with a Google Maps Application Programming Interface. According to Chrysler's Bell, it's also the first online branded experience that fuses Webisodes, mapping technology, and rich media to offer a totally immersive experience for consumers, who are referred to dealer links for quotes.
Before The Mudds, Audi of America Inc. spent a cool $5 million last year to run "The Art of the Heist" viral campaign to help launch the Audi A3 hatchback. Centering on a fictitious multimedia car theft from a Manhattan Audi car dealership, the storyline involved a character called Ian Yarborough, a computer hacker and stolen art recovery dealer. The automaker reports that hits to its Web site jumped 140 percent from the year before, with heavy hit patterns coming from "Heist" game site visits.
In December, Audi sister division Volkswagen launched a mini-site (www.forceofgood.com) to "spread fun and good cheer" in promoting the 2006 New Beetle. A throwback to flower children of the 1960s, when the original Beetle was king, the site shows fun-loving New Beetle owners performing random acts of kindness coast to coast. These goodwill ambassadors surprise drivers by paying parking meters, quenching thirst with IZZE juice, delivering free coffee to rush-hour-numbed motorists, and volunteering for public projects.
Podcasts and Blogs
Carmakers are also using blogs and podcasts to tout their products. Spotting growth opportunities, Volvo is reportedly the first major automaker to sponsor a podcast. Volvo, a division of Ford Motor Co., signed on last February to launch Weblog Inc.'s Autoblog, an automotive podcast, at autoblog.com.
Volvo recently paid $60,000 to advertise on Weblogs' Autoblog, according to Business Week Online. The medium delivers an MP3 via Really Simple Syndication (RSS) so users can receive it automatically. For the Internet real estate, Volvo gets a 60-second spot before the podcast, repeated mentions, plus logo signage on Autoblog's Podcast page.
On gm's FastLane blog (fastlane.gmblogs.com), execs expound on GM vehicles and complicated industry issues such as offshoring. Even better than a spy photo, a recent FastLane podcast reveals the 2007 Cadillac Escalade at a preview party in Beverly Hills, Calif. Radio host Deb Ochs interviews Jim Taylor, Cadillac general manager, who hints at the future Caddy's features and plays up the Cadillac image and celebrity interest. A follow-up podcast takes place after the reveals.
Further evidence of new media's street cred: Toyota's luxury division, Lexus, went to a blog page late in 2005 to clear up negative speculation that the Cabir wireless worm posed a risk to Bluetooth-capable navigation systems featured in pricey Lexus vehicles, according to ZDNet.
Where is this online boom heading -- gridlock or the fast lane? "We're going to see more of it," predicts Veretech's McFall. "More inventory online, more accountability with return on investment for the new media, more robustness, more contextual and behavioral advertising to create a positive customer experience, and more leveraging of new-channel media." McFall says he estimates the industry spent more than $300 million on new media in 2005.