American Honda is placing a major bet on music as the marketing medium of the future.
The Honda Stage initiative it announced last week will channel a "significant" chunk of the automaker's marketing dollars away from TV and into an array of music-related properties in an effort to showcase its vehicles to younger audiences. It involves an assortment of sponsorship and rights deals and will roll out in phases over the next 12 months.
At its heart is a new Honda-branded music channel on YouTube, the largest distributor of digital music, that eventually will feature videos from hundreds of live performances at festivals, concert halls and other venues, all sponsored by Honda.
The effort represents one of the largest-scale tests by an automaker of so-called content marketing as an alternative to traditional TV commercials, and could signal to competitors that it's time to rethink the allocation of their advertising dollars.
Rather than buying advertising space alongside entertainment content created elsewhere, Honda is charging into the business of hosting, curating and distributing digital media content. And by hitching its brand to music, it's tapping into a category of content with a record of attracting outsize audiences.
The effort aims to address a common problem among marketers: how to command attention of consumers under age 35 who get much of their entertainment -- including TV shows -- on the Web or mobile platforms rather than from the TV screen.
"We can put the ad with the content we want center stage," said Tom Peyton, assistant vice president of advertising and marketing for American Honda. "And we're not sharing the stage with others."
An effective conduit to young buyers is critical for Honda, which is launching two vehicles this year aimed at those consumers: the redesigned 2015 Fit subcompact and the new HR-V subcompact crossover.
The Honda Stage will be a launch platform for both vehicles, as well as for the Civic and Accord, which are the two best-sellers among retail buyers under age 35, said John Mendel, American Honda executive vice president.
Jeff Conrad, Honda Division general manager, described the Honda Stage effort as "a massive investment."
"We are spending more in the digital world than before," Conrad said "We were spending millions. Now we're spending multiples of millions."
Other automakers have experimented with content marketing, with notable success, but mostly for short periods and single vehicle launches.
Mercedes-Benz, for instance, hired filmmaker Casey Neistat to shoot four short films about the new CLA in conjunction with the car's launch last year. Eric Jillard, general manager of marketing services for Mercedes-Benz USA, said the campaign helped put the car on the shopping lists of buyers who hadn't considered Mercedes.
Hyundai, as part of the launch of the 2012 Veloster, produced and distributed a feature-length music documentary that followed disc jockeys creating electronic music. The film, Re:Generation, generated more than a billion media impressions -- the number of times it appeared, without necessarily being clicked on. Those impressions included stories in Rolling Stone and other music-focused media outlets that don't typically touch automotive content.
"It way overdelivered for us," said Steve Shannon, vice president of marketing for Hyundai Motor America.
• YouTube channel featuring videos of live performances and other music programming sponsored by Honda
• Concert series at iHeartRadio Theater Los Angeles to be promoted on Clear Channel's radio stations and its iHeartRadio digital music service
• Concert events and festivals produced by Live Nation
• Live interviews and in-studio performances at Sean Combs' Revolt Studios Hollywood, broadcast through the Revolt TV channel, smartphone apps and Honda's YouTube channel
• Performances at U.S. festivals including Governors Ball in New York, Austin City Limits and Music Midtown in Atlanta
• Expansion of Honda Civic Tour concert series to 3 tours targeting specific genres
Source: American Honda
Honda's program marks a broad expansion of its music-based partnerships, which include the annual Honda Civic Tour concert series and sponsorships of various music festivals.
With the new venture, Honda is partnering with concert promoter Live Nation and radio station giant Clear Channel to co-sponsor the Lollapalooza, Sasquatch, Austin City Limits and Governors Ball music festivals. In all, Honda said it will sponsor 200 live acts over the next 12 months.
The Honda Stage channel on YouTube picks up where those festival sponsorships leave off, featuring exclusive music videos, interviews and live performances. Each video kicks off with a 15-second Honda commercial. Content from the Honda Stage can be streamed into Honda vehicles via a smartphone app.
"This is bigger than sponsoring one event or one tour for a couple months and having it fade into the sunset," Peyton said.
He said TV commercials will continue to play a major role in Honda's advertising, including a campaign for the 2015 Fit this summer.
But dollar for dollar, Peyton said, the Honda Stage effort can generate more impressions and be more effective at reaching the target audience. He said Honda expects about 2 billion impressions from the program and, it hopes, hundreds of millions of views on the Honda Stage channel over the next 12 months.
"At that point, it really becomes a media communication outlet for us similar to anything we do on TV and it becomes really a TV replacement for us," he said. "We are changing the places where people see the ads."