Campaigns for automobiles must serve two gods: short-term sales and long-term brand equity and consideration. Such was the consensus among marketers from Audi, Land Rover, Volvo, and Subaru who spoke at an Ad Club breakfast on Tuesday in New York.
The panel -- led by Google automotive analyst Meredith Guerriero, who heads the auto industry practice for Google's East Coast operations -- traversed a lot of ground, from the importance of customization to the meaning of value to post-recession luxury customers.
Guerriero set the tone, noting that online mobile, social media, cloud computing, and scale are the four major trends. She reeled off some impressive stats: mobile Web adoption now is eight times faster than it was 10 years ago for that of personal computers; there are more smartphones now than PCs; half of all Internet use is via a mobile device; one out of six minutes spent online is spent on a social network; 19% percent of tweets mention a brand or product, with a large proportion of those expressing an opinion; Facebook and YouTube constitute 9% of all online time and 25% of mobile users spend two hours a day on mobile.
"When VW launched GTI in the U.S. with an iPhone app, the company experienced an 81% jump in sales leads," she said.
Loren Angelo, Audi U.S. brand marketing manager, said Audi awareness and consideration are up 30% in the U.S., adding that Audi KPI (key performance indicators) have been focused more on the long-term brand consideration issues than strictly on sales numbers.
"We have to have clear, long-standing goals," he said. "We have had those very specific goals even before the economic downturn two years ago." He said a longer view for brand performance allowed Audi to stay the course over the past two years. "As a brand, Audi had been isolated and niche-oriented in the U.S. In fact, our top competitors still have much higher [awareness and consideration] numbers than where we are now," he said. "We should be there."
Chris Marchand, Land Rover's EVP marketing and sales for North America, said the brand realized during the downturn that it had to do more than just hand prospective customers to dealers; it had to get dealers to play a larger role. "We have focused on the purchase funnel down to the customer," he said. "Dealers need to understand how everything works. That our business is up 20% this year reflects how we have been working with dealers."
John Maloney, Volvo VP marketing, told attendees the automaker's sales-centric efforts include tracking leads and consideration. "At Volvo, we are screening, in real-time, leads that come from every dealer in the in U.S."
Volvo has also been working to cut cost of ownership. "Even affluent customers are managing their budgets, so managing cost of ownership has been a fundamental change," he said. "We have also reduced MSRP [manufacturer's suggested retail price] to get closer to transaction pricing," he said, giving props to Hyundai's Assurance program as a way of addressing how the economy has changed consumers' definition of value. Volvo's approach was to take out all expense and cost of ownership in the first five years. "Even affluent customers have reacted to that."
Customization has been raison d'être for brands like Scion, and has been almost entirely an aftermarket program. But the panelists said luxury brands must offer customized products at production, making it part of the ordering process. Land Rover's Marchand said the brand has launched such a program, which it calls "Auto Biography." He says the program means customers have to sit on their hands rather than drive off the lot the weekend they make their decision.
"There is pent-up demand for this because customers have a need to make a product unique," he said. "Up 'til this point, customization meant aftermarket, but there is a market there, and some customers are willing to wait longer for that." Land Rover builds all vehicles in the U.K., so there is lag time. "The key is finding the customers [for such a program], and communicating with them during the process. But there is money to make in customization and a brand-building opportunity."