Toyota seeks more input from multicultural ad agencies

Jack Hollis: Getting rid of advertising silos.
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LOS ANGELES -- The advertising agencies Toyota uses to reach African-American, Hispanic and Asian-American consumers will soon have a larger role in crafting the brand’s general-market advertising, Toyota’s U.S. marketing boss said.

Effective at the April 1 start of Toyota’s upcoming fiscal year, the automaker’s multicultural agencies will work as a team led by Toyota’s agency of record, Saatchi & Saatchi, as opposed to the more “siloed” approach currently in place, said Jack Hollis, vice president of Toyota marketing.

The new team, called Total Toyota, was created so that the general-market advertising traditionally handled primarily by Saatchi can have more input from Toyota’s African-American agency Burrell Communications, Hispanic-market agency Conill and InterTrend Communications, which handles Asian-American advertising for the automaker, Hollis said.

Toyota planned to issue a statement about the marketing shift today.

The agencies will remain independent, but instead of marketing to ethnic groups individually, Hollis wants Toyota to adopt more of a “total market” approach to better position the Toyota brand as ethnic minorities account for a greater share of U.S. car buyers.

“The three multicultural agencies each have sat in a silo and then we have this general-market silo,” Hollis said. “The total market is really defined as breaking down those four siloed areas and making it one, so the total market is the general market combined with the multicultural market.”

The move underscores the auto industry’s burgeoning recognition of the buying power of ethnic minorities.

More buying power

Data from IHS Automotive says combined U.S. auto sales to Hispanic, African-American and Asian consumers grew 15 percent in the first three-quarters of 2013 compared to the year-earlier period, while sales to all consumers increased 10 percent. Ethnic minorities accounted for 24 percent of U.S. new vehicle registrations in the first nine months of 2013, according to IHS data from Polk.

The U.S. auto industry’s sales growth this year, while healthy, “pales in comparison to the growth of the minority consumer,” said Marc Bland, vice president of diversity and inclusion at IHS Automotive. “If investing for growth, the ethnic consumer is an excellent place to start.”

In a statement, Toyota cited U.S. Census data saying multicultural consumers will account for 88 percent of U.S. population growth by 2030.

Toyota has already made major inroads with minority consumers, selling more vehicles to African-American, Hispanic and Asian-American consumers than any other brand in the industry, according to IHS Automotive.

A different approach

Hollis said precisely how the agencies will collaborate on marketing initiatives will vary on a case-by-case basis. The move may also affect Toyota’s media-buying setup in the future, but those details are still being worked out, Hollis said.

But Hollis said the move will result in Toyota spending more money to reach multicultural consumers, though he declined to elaborate on the extent of any such increases.

He said the shift could change how Toyota launches its vehicles in the future. For example, Toyota ran two distinct campaigns to launch its redesigned Avalon full-sized sedan last year, one led by Saatchi for general market and the other by Burrell to reach African-American consumers.

“We gave them specific directives, they had slightly different briefings and proposals, but both were centered around the significant changes of the vehicle,” Hollis said. “Both were very successful … but if we brought them together, could we have done just one, spent money differently, or gone to the communities differently with just one message?”

Hollis also said creative personnel from some or all agencies may also work together on a single vehicle launch campaign.

“It’s about really saying I want to add (each agency’s) insights to a total market approach, and each of our agencies are so good, that we think we can contribute better to the total marketplace,” Hollis said.

You can reach Ryan Beene at rbeene@crain.com. -- Follow Ryan on Twitter


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