Car manufacturers spend billions trying to capture consumers’ attention. Research shows that putting that money behind integrated marketing that includes the Web pays off.

The automotive industry in 2000 spent more than $50 billion on marketing. Although more than half of that marketing spend took the form of rebates and incentives, the major auto manufacturers still spend enough on advertising to consistently dominate the top 25 advertising spenders. Car manufacturers spend billions waging a war for share of mind, in hopes that they will catch consumers as they are about to consider the purchase of a new automobile.

Auto manufacturers also spend money in interactive, although less so in media than in Website development. While car manufacturers dominate overall ad spending, it is rare to see a car manufacturer creep into the top 25 on a weekly Netratings report. Auto manufacturers spent heavily on their Websites after the commercial explosion of the Web, yet they seem to have little faith in Web advertising as a branding vehicle. As Kevin Brown of Ford Motor Media shares, “If you look at Ford Motor company in terms of online spend, you’ll see the downward spiral. Three years ago, Ford was in the top 10 spenders. Where we’re tracking today, we’ll be lucky to see half of that.” Instead, the Web tends to be seen as consumer research vehicle.

In an October, 2001 speech at a Business Week conference in Chicago, Mark Hogan, president of e-GM, claimed that more U.S. consumers go online to shop for a vehicle than go to dealers. He pegged that number at 55% of auto consumers and expected that number to increase to 75% within two years. Research tends to bear this out. According to JD Power and Associates, 62% of new car buyers in the United States went online to research their car purchases in 2001, up from 54% in 2000.

Unfortunately for Mr. Hogan and the rest of the automobile manufacturers, only 20% of consumers indicate they are “very satisfied” with automaker Websites, according to a survey released by Accenture last year. The same study revealed that 48% of consumers are “neutral/dissatisfied” with automaker sites.

As the old adage goes, a chain is only as strong as its weakest link. As so many car buyers are using the Internet to research their purchases and form critical opinions on car models and brands, perhaps it is time for automakers to really step up to the plate by making interactive media a cornerstone of their overall marketing efforts.

New Media, Old Techniques

Over the past few years, we’ve seen the Web play many different roles for the auto industry. Some manufacturers, like Kia, do precious little to drive consumers to their Websites other than tagging traditional ads with their URL. In the middle, companies like Ford are, according to Kevin, “programming our brand, and doing that by putting together high-value entertainment content.” On the other end of the spectrum, BMW has made the Web a primary focus of its branding efforts, producing several short films and using television and other traditional media to promote the films and drive consumers to a more robust experience than can be delivered efficiently on television or through other media (see BMW Films: The Ultimate Marketing Scheme.)

“Branding online should be more about share-of-voice now, with sponsorships, larger ad units and rich media used correctly," says Arthur Chan of Team One Advertising, which works with Lexus. “We stress the importance of our use of rich media and sponsorships within areas that are psychographically relevant to our target audience.”

Successful online branding within the auto space might borrow from concepts popular in traditional media, such as Share of Voice (SOV).

“From what I see and what I hear, I think we’re going to see a larger shift in more share-of-voice media buys," says Chan. “There’s an (over-used) analogy I like to use…everybody says this is like the wild west, and what tamed the wild west back in the 1800's? The pioneers that staked claims to ground and built on that land. All brand advertisers should be claiming territories."

Branding Matters

A McKinsey Quarterly report, issued earlier this year, asks why two nearly identical cars (the Toyota Corolla and the Chevy Prizm), which are built side-by-side at a plant in California, can experience two completely different fates in the marketplace. The differences between the two cars are minor, yet it costs up to $750 more in buyer incentives per car to support sales of the Prizm. McKinsey attributes the disparity to the lack of brand equity on the part of the Prizm. “[C]onsumers are influenced by the emotional connections they form with products – and with manufacturers, dealers and other owners,” according to the report. “Companies that act on all the elements of brand affiliation – that is, the emotional relationship, the purchase process, and product attributes – build an advantage that competitors find hard to duplicate.”

In other words, “Where is the brand?”

"A lot of upscale brands need to play to the emotional side," says Michael Hirshoren, eastern vice president of sales at Salon.com, which counts Lexus, Mercedes, and Porsche among its advertisers. "Each car has become its own intimate brand ... Each brand creates different relationships with its own aspect of life."

In late 2000, Volvo decided to give AOL users a "first look" at its new S60 sedan, choosing online media over more traditional launch vehicles like TV and radio. Online buyers could add custom options packages worth up to $2,100 at no additional cost. Unfortunately, this approach didn't generate the reach needed to pull off a new product launch. According to Iconocast, the online-only portion of the S60 launch reached only 10 million viewers. However, Volvo quickly learned its lesson and turned around an integrated college basketball promotion in March 2001 in which online media figured prominently. With the added reach generated by traditional media vehicles working in tandem with online, the promotion was a great success.

The integrated approach also worked very well for Volkswagen. In 2000, Volkswagen of America used national broadcast and print to drive potential customers to its Website, where it offered New Beetles in two limited edition colors, available only online. The promotion generated over 2,500 online car sales, 60% of which were for Vapor Blue – one of the custom colors.

Perhaps the lesson to be learned here is that interactive media are simply just a part of the media mix. Both VW and Volvo used the Internet to enhance the brand experience for Internet users -- an important target for both companies -- but success is most attainable when online is added to a mixture of broad-reaching media.

“The type of media person that will best fit the integration is someone who has experience on both sides," says Meridee Alter, vice president and media director at rpinteractive, which handles online ad duties for Honda. "When separation happened between online and offline, you had people on the traditional side who didn’t have interactive experience, and likewise [people on the] interactive [side] who didn’t have experience with traditional. So the future media person who will look at integrated campaigns should be conversant in all media types.”

The Pinnacle of Integration

Perhaps the best example to date of an automaker using the Web to enhance its brand image is BMW Films. Spending over $15 million, BMW enlisted the help of several top-notch Hollywood directors like Guy Ritchie, John Frankenheimer and Ang Lee to produce four short films that highlighted its cars. Each short film featured British actor Clive Owen as a wheelman hired to help people out of difficult situations. Paying particular attention to portraying its cars as high-performance driving machines, BMW conveyed the essence of its brand to a whole new audience.

BMWFilms.com was supported by television commercials that were essentially "trailers" for the short films. Delivering the films exclusively via the Internet, either by streaming or in the form of a downloadable player, BMW was able to utilize a longer-format unit that conveyed the personality behind the BMW brand in a way that would have been prohibitively expensive on television. And the results were phenomenal.

"I never knew they were such amazing performance machines … I will definitely consider a BMW for my next car purchase," responded one viewer. "My next car will be a BMW, so help me God," said another.

One of the reasons why BMW Films became such a success was its integrated approach. Not only did television do a tremendous job of driving consumers to view the films and interact with the BMW brand, but national news media also jumped on the story of the unique way in which BMW was promoting its autos. Magazines like Time and Entertainment Weekly, as well as newspapers like USA Today and The New York Times printed reviews of the films themselves. The innovative new online branding vehicle was news in and of itself, which helped make BMW Films one of the most talked-about campaigns in both the trade and mainstream press.

The Bottom Line

In looking at the Internet efforts of the major auto makers, the drivers of success borrow from both the old school of marketing and the new school of emerging media. The messages are clear: Do use the Internet to connect in a more meaningful way with potential buyers. Don't let online campaigns go without support from traditional media. And perhaps most importantly, use integrated marketing to convey a cohesive brand experience.