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Volvo plans Net budget increase

Volvo Cars of North America expects to continue as an Internet leader among automakers next year.

Phil Bienert, Volvo’s manager of e-business and future product strategy, would not give exact numbers but said the brand will increase online spending 20 percent. Based on Volvo’s estimated Internet spending of $5.1 million this year, the 20 percent increase would amount to $6.1 million.

The money will be diverted mostly from a mixture of traditional media, including TV and print.

“We’re not just doing this because it’s neat or fun to talk about. We’re doing it because this is where our customers are,” Bienert said. “The Internet is very efficient. It can be very targeted. We can make radical changes quickly. We can track somebody from click-through to purchase.”

Volvo has sought online marketing opportunities aggressively since 1994. Most recently, the company aligned with Microsoft for interactive TV and, through MSN CarPoint, a virtual showroom and customizable digital garage.

The MSN relationship also will be leveraged to help launch Volvo’s XC90 — its first sport-utility — in November. An online teaser campaign will start with a Webcast from the North American International Auto Show in January.

Gordon Wangers, a managing partner at Automotive Marketing Consultants in San Diego, said Volvo is smart to increase Internet spending next year to promote the XC90.

“I saw it (XC90), and I think it’s a major home run,” he said. “It makes sense for Volvo to expand its Internet presence, because the type of buyer they’re interested in is Web-savvy and perhaps most likely to research on the Internet before buying. They will attract the young active-lifestyle buyer.”

Michael Lazarus, president of Volvoville USA in Massapequa, N.Y., agrees. “For a pre-launch, I think it’s a good strategy because the Internet is a place for information. But we shouldn’t exclude other media. For a launch, you’ve got to have people see and hear you.”

Bienert said Volvo will have a stronger presence in traditional media for the XC90 launch than it did for the S60 launch. Volvo, with a limited advertising budget, took a risk in launching the S60 solely on the Internet in fall 2000, and initial sales were slow.

Ray Ciccolo, Volvo line chairman for the National Automobile Dealers Association and owner of Boston Volvo in Boston, said he’s excited about additional, dealer-related services that could spring from Volvo’s relationship with MSN.

Said Ciccolo: “They’re just rolling this out, but we’ll definitely be involved.”

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