Recently on NPR's Morning Edition, host Renee Montagne interviewed 20-plus year auto-exec-turned-industry-analyst Jim Harbour (to Jim's credit, "industry analysis" must be the only growth sector in the U.S. auto industry for the past couple years). Montagne was quizzing Harbour on the problems the auto industry is facing.
Here's an excerpt from their exchange:
NPR: What about the perception that U.S. automakers aren't making cars as well built as foreign cars? How can U.S. automakers change the perception?
Jim Harbour: I am not a marketing expert at all. I don't know how you change the perception of the American people who think we're still building junk. And I know, I'm from the time that I was doing that. I was building the junk. We used to build cars with eight defects, and we'd ship them out and ship them to the dealer.
Now, I realize the U.S. auto industry's situation is complex, but I think it's fair to say that they're making better cars than they used to. The industry's products have improved, and yet the companies are still dogged by the perception that they're making junk.
Imagine that, coming from the third-largest advertiser in the U.S. This is a company that spent $3 billion in 2008, and saturated our media with messages about how great its cars are and how much everyone loves GM. And consumers still don't have a positive perception of its brand.
What's going on here is an epic battle for the consumer's mind. In one corner sits massive, far-reaching paid media ad campaigns. In the other corner, consumer word of mouth.
In the end, billions of dollars in paid media are no match for a group of consumers chatting about your product.
Of course, around 30 years ago, when GM's negative buzz started spreading, it took longer for word of mouth to spread. That was a pre-internet, pre-mobile phone, pre-fax, even pre-cable era for much of the country. If a company was producing junk or mistreating customers, unless there was a "60 Minutes" type expose produced or published, it took a long time for word to get around. Thus paid media messaging was able to continue working because there simply wasn't any contradictory information available on a mass scale. In short, companies had a lot of control over the messages people heard about them.
Contrast that with today, where product-defect stories tear across the web like a virus. And what's enabling that spreading of information? Social media.
A recent article in Brandweek summarized a survey of 110 CMOs and concluded that "social media was a relatively low priority -- ranked in the bottom third. Mostly it's because of analytics. The things that are measurable are a top priority. Most marketers see [social media] as an experiment."
This, in an environment in which some of our country's most venerable media giants are collapsing because consumers have found new media formats to be more in line with how they gather and share information. It's a time when a $3 billion annual advertising budget can't move the needle on brand favorability. There are currently more than 200 million Facebook users, with 1 million domestic users joining every week. Even Twitter, what I consider an emerging tool with an early adopter user base, is approaching 10 million users and ascending like a rocket.
That doesn't sound like an experiment to me.
And yet, those CMOs are still asking if social media works? Guys, the monster's out of the cage. Shouldn't the question be, how quickly and thoroughly can we figure this thing out?
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