Auto ad execs are projecting marketing budget increases ranging from minimal to double-digit this year. Much of the increase will not go into the usual mass-market ad pot, but to the Internet and to programs that will take automakers closer to customers - sporting, music and humanitarian events.
Mike Slagter, corporate marketing manager for the Lexus Division of Toyota Motor Sales U.S.A. Inc., talked with Jeff Vettraino about the Lexus strategy. What follows is an edited transcript.
Do you expect marketing costs to go up, down or stay about the same this year?
We expect to spend modestly more in advertising and in respect to Internet activities. This year Lexus will not have the excitement of a new product launch, so I think we really need to focus on a strong advertising effort.
How will you allocate the money?
We're maintaining a strong presence in network spot television. Our dealer advertising association is doing that, too. We're shifting a little bit out of print and increasing in the interactive areas - the Internet. We're still kind of in an experimental stage in terms of how you advertise on the Internet.
Will you devote more or less money to less conventional marketing programs such as sponsorship?
I would say more. We're doing something called 'The Taste of Lexus' this year. A number of manufacturers have gone in this direction, but we want to take it a step further. We are going to do events in the top 10 markets around the country - consumer market events with owners as well as prospects. They'll drive all of our products. We'll have all of the competitive products there, and it will be a lifestyle-type event - excellent food, entertainment, activities for the children, to really let people come out and enjoy themselves and have a chance in our cars as well. We think we can do about 2,000 consumers, prospects and dealers in a weekend.
Do you plan to target groups such as African Americans, women or Hispanics?
Not more than we've done in the past. Our primary focus is on income demographics. We advertise in women's magazines; we advertise in minority-audience magazines, but we believe that good advertising is good advertising.
Do you think your company does a good job with relationship marketing?
We're kind of exploring how do we do that effectively. Toyota has a number of strong databases around the company, and sometimes they don't always talk to each other. We're working on how to get those combined and unified. We are also trying through our survey system to gather more data. All the associates at Lexus call at least four customers a month and talk with them. With that information, when we do direct marketing efforts we can target very specifically what our owners are interested in.
What do you plan to do to get a better return on your marketing investment?
The big area of question in my mind is interactive. How much money should you be spending there, how do you spend it, and what is the future of interactive?
I think from the television standpoint, we're spending our money very effectively, although we have to stay on top of that because the networks are losing some of their strength and cable is making everything more fragmented. It's becoming more difficult to make your buys. You can't just go in and buy NBC Thursday night and figure you've covered your bases.