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Don Rainey is a general partner at Grotech Ventures, a Washington, DC-area venture capital firm with a 25-year history investing in high-potential technology companies such as Advertising.com, which was acquired by AOL for $435 million in 2004.

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Automakers Need to Become Better Conversationalists

Written on
Jul 6, 2009 
Author
Don Rainey  |
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Automakers Need to Become Better Conversationalists

cars_small.jpgADOTAS — Today, many car buyers are making their purchases — or, at the very least, conducting substantial, decisive research — online from the comforts of their homes and offices.

Prospective automobile buyers are no longer watching TV commercials, reading newspapers and walking into dealerships for all of their purchasing needs and information. These changes in behavior have created excellent opportunities for automakers to invest in online marketing initiatives that reach highly targeted consumers at a fraction of the cost of national TV commercials.

Consider this: zero U.S. automakers purchased TV advertising during the tube’s marquee 2009 event, Super Bowl XLIII. By comparison, during Super Bowl XLII in 2008, GM purchased 11 30-second spots at a total cost of $28.6 million. Soon afterwards, GM announced plans to shift half of its advertising budget online by 2011. TV advertising has become prohibitively expensive for U.S. automakers. The good news is that there are viable alternatives.

Many automakers have started to migrate towards the burgeoning online advertising market (2008 brought a 21.1% year-over-year increase in automakers’ online ad spending, which was the only growth segment in a year that saw an 8.2% drop in automakers’ overall ad spending). However, the Big Three face stiff opposition from foreign competitors like Toyota, which generated over 2.5 billion impressions with a 2008 Matrix campaign on MySpace, and Honda, which reached 600 million impressions with a MySpace campaign in Q1 2009.

The social media context provides a unique starting point for a two-way marketing dialogue. The “Pick Your 5” application from LivingSocial, which set a monthly record by attracting nearly 30 million unique Facebook users in April, allows consumers to identify their 5 favorite items in any self-titled list. This list is then placed into the user’s Facebook feed which can be viewed by friends. Lists identifying favorite movies, music, actors, etc. abound.

Two automobile-related lists provide a natural starting point for automakers to engage in the social medium. Over two million users have completed lists entitled “Five Cars I Want in My Garage,” while another 1.1 million users have listed their “First Five Cars I Owned.”

The “Five Cars I Want in My Garage” list might be overly aspirational, but the list of first cars and the emotional strings they pull? That’s a great place for any automaker to begin a dialogue. You loved your first (Ford/Chevy/Dodge) – why not look again now?

Another example of the potential for interactive automotive advertising is demonstrated by the award-winning campaign that Pontiac is running on Kelley Blue Book’s website. The ad relies on an interstitially presented avatar and progresses with user interaction that educates and entices the consumer with comprehensive information about the Pontiac G8.
Here is the referenced ad.

The advent of social gaming within the social media environment also presents automakers with a host of new advertising methods for engaging with consumers. Ford model or engine trivia, anyone? Would a racing game be too obvious a way to demonstrate power and handling? How about a Family Feud-style game where users guess at top selling models by year or style? It appears that social gaming is the next move down the board in social media and automakers clearly have the budgets to lead rather than follow.

U.S. automakers need to make better use of their most formidable “hidden assets” — i.e. many Americans still believe in them and are still proponents of their products. The Big Three should capitalize on car buyers’ nostalgia and patriotism, such as the positive memories evoked by the 1984 Ford Tempo that they drove when they were in high school.

By shifting billions of TV advertising dollars to the social Web, the U.S. auto industry has the ability to engage consumers in revolutionary ways. It is clear that the industry’s re-invention must be based in a world where the customers’ voice counts. The Internet is all about conversations and automakers have a huge opportunity to engage customers in a positive two-way dialogue about their brands.





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