Event marketing is becoming one of the fastest-growing categories for advertisers, with General Motors hot on the heels of leading event spender Philip Morris Co.
While the auto industry is expected to represent only about 4 percent of the $7.6 billion advertisers likely will spend on event marketing this year, auto spending on events is expected to rise as much as 15 percent this year, compared with 12 percent in overall event spending.
But automakers aren't spending their money willy-nilly. Increasingly, they expect measurable results. And they're turning to more sophisticated targeting methods to reach specific prime prospects.
'We're seeing a movement of trying to do it more affordably and effectively, using database marketing, research and creativity to get the most out of the
expenditure,' says David Stokols, a partner with Automotive Marketing Consultants Inc., a Red-ondo Beach, Calif., marketing firm.
Volkswagen is a good example. Two years ago it hired LaBov & Beyond, a marketing firm in Fort Wayne, Ind., to set up a comparative ride-and-drive for prospective buyers. Drivers were asked to rate the new Passat against its primary competitors. The Passat started out dead last on almost everyone's list, according to Ann Ringwalt, an account executive at LaBov & Beyond. When the event was over, however, 81 percent of attendees said the Passat was the vehicle that most exceeded their expectations.
To maximize its investment, Volks-wagen also videotaped the consumer part of the event and repackaged it as a direct-mail program to 2,000 prospects. According to Ringwalt, 263 people receiving the tape purchased a Volkswagen, and 23 percent of those purchased a Passat.
Automakers aren't turning their backs on traditional media. The money they are spending on events is peanuts compared with what they spend on media such as TV and magazines. The Chicago-based event-marketing consulting firm IEG estimates GM will spend $110 million on events this year, almost double the estimated $60 million DaimlerChrysler, the next-highest automotive spender, will allot to events. Most other automakers spend between $2 million and $30 million each on events, IEG says.
But experts expect the car companies to increase their event sponsorships as a tool to combat increasing competition, media fragmentation and declining TV ratings. 'Customers desire experiences,' adds Steve Schultz, COO of Visual Services Inc., an automotive events marketer in Bloomfield Hills, Mich. 'Companies are developing events so consumers can experience their products.'
Nowhere is the auto industry's presence at events more evident than in golf. Last year the sport absorbed an estimated $35 million from automaker sponsors, with about $21 million coming from GM, according to IEG. GM's Buick brand is the oldest sponsor on the prestigious PGA Tour, at 40 years. This year Buick will be title sponsor of four events on the PGA Tour's schedule of 44 golf tournaments and will have a presence at 11 additional tournaments. At each one, Buick will target a slightly different audience with a different model.
Among other automakers sponsoring events on the PGA Tour circuit this year are Ford, Nissan and DaimlerChrysler.
Golf's attraction is easy to understand. It draws an upscale audience and is custom-made for covering a variety of different markets. It also offers an excellent way to get local dealerships involved. But savvy automakers don't wait for the event itself. They promote sales through in-store promotions and dealership events. 'There are more incentives, free tickets, sweepstakes and test-driving programs than we ever saw before,' says Ric Clarson, vice president of tournament business affairs for the PGA Tour in Ponte Vedra Beach, Fla.
Automotive marketers also see special events as the key to reaching young adults and busy families, groups that are especially difficult to target through mainstream media. Consider last year's marketing tie-in between the Oldsmobile Intrigue sedan and the film The X-Files. It aimed to get young, married adults with children to consider and test-drive the Intrigue, complete with free movie tickets, prizes and photo opportunities with stars of the film near an Intrigue. Frankel & Co. in Chicago handled the event, which encompassed several 'X-Files Expo' events in major cities.
'It was a very powerful way to associate the brand with a real experience,' says Alan Kercinik, an account supervisor with Frankel's event marketing division. Kercinik says that as a result of the program, 8,554 consumers test-drove the Intrigue and 10,000 consumers requested product information on it.
1999's hot button
Getting consumers to test-drive cars at events is undoubtedly the hot button for 1999, says Stokols of Automotive Marketing Consultants. The firm manages automotive brand events involving consumer test-driving opportunities - for example, at the Hyundai Learn & Drive events associated with Universal Sports' Hoop-It-Up basketball competitions, where families killing time between tournaments are invited to test-drive Hyundai cars on a nearby track. Mercedes-Benz and Lexus also have offered test-driving events to consumers through Automotive Marketing Consultants.
'Our opinion is there's a day in the not too distant future where, in certain auto categories, people will have gone to an event before they choose their vehicle,' Stokols says. 'The race is on now to see which automotive marketer gets to these people first and does the best job at convincing them.'
The trend isn't lost on advertising agencies. Many have set up new event marketing departments or formed alliances with event marketing specialists. They are pitching their events capabilities as the latest wrinkle in integrated brand marketing that merges advertising with direct mail, database marketing, the Internet and hands-on experience.
Nick Lico contributed to this report