The automotive category has raised the bar of online marketing through its spending, creativity, use of new tools, and seamless media mix integration.
Automotive is arguably the most important advertiser category on the Web at this time. The category spends a great deal of money online, even if it is 13th of thirteen industry categories as reported by AdRelevance. This category is also among the most innovative, making use of rich media in ways that attract, dazzle, and most importantly, captivate the user.
Indeed, what the automotive industry has done with the medium and its overall philosophy about advertising in general deserves our attention. The approach taken by automotive suggests not only how much money might be spent with online media (which is significant), but also how advertising is approached at all.
What has been the most immediate impact the automotive industry has had on online advertising?
Money, money, money, money…
Certainly the biggest contribution the category has made is from its wallet. Overall spending of the automotive category against measured and unmeasured media is significant: Three of the top ten advertisers for 2002 are automotive (Ford sitting at pole position). And although online only receives a fraction of the billions of dollars the top five automotive manufacturers spend on advertising, this is no small contribution. According to CMR figures reported by AdAge, the top five auto manufacturers spent some 8.3% of total online advertising in 2002 (as reported by CMR).
“Since automotive manufacturers are such big-budget advertisers, even a small percentage of their marketing budget is a huge influx of cash to our industry,” points out Paul Kadin, executive vice president, Marketing and Strategy for EyeBlaster, which has run a number of creative efforts for automotive advertisers.
Automotive advertisers are not, however, spending wildly against online simply because they do have such deep pockets. As advertisers, they may spend a significant amount of money on media, but it is not done without serious consideration and without very well-defined goals. As one agency executive who has spent many years working on the automotive category says, these advertisers aren’t doing things like home-page takeovers and huge portal deals just because they can; there is a purpose to them. And that means the budgets, too, have intent.
“There are no incremental dollars,” says the ad executive who would not speak for attribution. This industry is really tight with budgets, so it is because the agencies can read payout on their investments that spending has increased and will continue to do so.
This may be one of the biggest impacts automotive has on the online advertising industry: taking the innate capabilities of the medium to render accountability and bringing it to the overall marketing mix.
Those working in automotive advertising are really smart marketers, say all the agency folks I spoke with for this article. They aren’t spending money just to get free tickets to sporting events. There is almost a religious fortitude to the marketing and advertising decisions made. There is always a purpose. The automotive category might have the resources to experiment with media in ways that others cannot, but once the answers to their questions are found, they move accordingly and with determination.
Being Creative
It certainly can be argued that the other significant contribution made by auto manufacturers to online media as a result of their adoption of the Internet as an advertising vehicle is creative.
“Automotive advertisers have been very progressive and innovative when it comes to the use of online video,” says Jason Scheidt, director of marketing for EyeWonder. “In fact, some of the very first uses of EyeWonder’s instant streaming video technology were from automotive advertisers.”
When it comes to having a regular parade of new things to try creatively, nothing beats the Web; and when it comes to advertisers willing to try out whatever is new, no one beats the automotive advertiser.
Ad technology companies like Point Roll, Viewpoint and EyeBlaster have all increased their activity in Detroit, points out someone actively selling media to the category. This is largely a result of the category having embraced graphic ads over text links early on. The desire to enhance the static 468x60 banner evolved quickly to executing larger ads like Skyscrapers and others, which was ultimately to grab more real estate on the publisher’s page.
Innovation on the creative front is no doubt among the automotive category’s biggest contribution to the space.
“Although considered a lower excitement marketing industry, compared to something like beer or sports apparel, if you look back on the history of advertising, you’ll see that automakers have led in innovation from the start,” says David Leider, national account director for Automotive at Yahoo!. “Online is no different. Just look to Ford’s groundbreaking Explorer “Birds’ execution in the summer of 2001. It was the first ad of its kind online.”
Bigger is certainly better for the automotive manufacturer. In efforts to increase awareness of the next F-150 this September, Ford developed an integrated communications plan that would sustain F-150's presence in the marketplace and allow Ford to connect with customers in non-traditional environments.
This meant working with all three major Web portals -- AOL, MSN and YAHOO! -- to design custom F-150 Internet roadblocks to run on a specific day in September. It was estimated that approximately 75% of all portal traffic on the Web was exposed to the next F-150 through this one-day online initiative.
Such a campaign does raise a question: Does a user want a car driving across his or her lifestyle ‘content’ OR is that type of execution better utilized on a car content site or search result page where someone actually requested information more pertinent to automotive advertising?
On Target
The quandary of a creative execution’s appropriateness to its location brings up another thing automotive advertisers do creatively: targeting.
There has been a lot of talk about contextual and behavioral marketing as of late. Automotive advertisers are among the first and most avid users of behavioral targeting methods. On sites like NYTimes.com, an automotive advertiser can now reach individuals in different stages of their buying cycles in content environments that do not have a natural affinity with car research or purchasing because that individual has demonstrated behaviors that do have affinity with car research and purchasing.
This method of targeting has opened up access to inventory that didn’t really exist before. By targeting their messages based on behavioral criteria, greater reach is achieved against audiences that until then were restricted to only endemic content locations that were not always available.
“The auto manufacturers tended to only market on ‘auto sites’ where consumers were theoretically ‘in the market’ to immediately purchase an automobile,” says Susana Williams, VP/western director of Interevco.com, a rep firm that has done a good deal of business with the automotive sector. “I’m now seeing more of a desire on the part of the auto manufacturers to go outside that narrow focus and market to consumers who are active, enjoy a particular hobby or sport, etc.”
This is a sign of the kind of targeting referenced above. Williams explains that Interevco recently worked with Mazda on a promotional campaign for the Mazda RX8 and the X-Men 2 film, as well as with Honda on a late summer motorcycle campaign. Both were targeting consumers in more of a ‘lifestyle’ frame of mind than an “I’m buying a vehicle” state of mind.
The Most Important Lesson: The Future
The most interesting thing to have come to light while researching how the automotive industry approaches online is its view of online as part of the overall marketing mix.
In Detroit, online media planning and placement aren’t looked at as some wholly separate endeavor to be taken on by wunderkind technophiles who happen to be working in an agency. Online is a natural part of the consideration.
At agencies in Detroit handling an automotive account, says Kristen Bergmann, senior partner and digital media director of J. Walter Thompson in Detroit, interactive is not treated distinctly from the rest of media. They do not run separate silos to work on just digital.
“Automakers will clearly lead the way in making online an integral part of the media mix,” says Leider of Yahoo!, meaning that the Balkanization of media may come to an end due to the approach the automakers take to putting together their communications packages.
This makes sense, of course, because when you are investing hundreds of millions of dollars to convince people to spend a great deal of money on a product that has only a very thin margin, you want to be absolutely sure you’ve got the right kind of mix. Not to say that mistakes aren’t made and choices made are not driven by political considerations, but there is little room for doing things without serious attention to cause and effect.
It is this kind of attention that has given the automotive category advertiser the kind of learning it needs to make better informed decisions about the allocation of its budget.
And it looks like those allocations are likely to grow.
Mitch Lowe, president and CEO of Jumpstart Digital Marketing, representing auto sites to the market and putting together auto market shopping programs, sees continued growth. “The car companies simply have to be online and they need to be in front of consumers who are RIGHT NOW making buying decisions. By 2007, I suspect 7% of media budgets -- approximately $550 million -- will be spent online.”
“The point is that online advertising works – it achieves their goals,” says Kadin of EyeBlaster. “They have the resources to truly exploit [the medium’s] effectiveness while exploring the creative and technological boundaries.”
The automotive category’s biggest legacy regarding the use of online media may be that it gives cause to other advertisers to move away from the one-off media buy or a separate media plan and “towards being more – or totally – integrated with the larger, central plan for the brand,” says Kadin.