Volvo dealers are spending significantly more on regional advertising under a new ad association program.
Volvo's dealer associations grew to 40 under a program that started Jan. 1. Last year the company had 19 groups that could pick their own ad agencies.
'We needed to improve our message on the regional level,' said Gail Timmerman, field marketing manager. The regional ads focus on features, benefits and prices of cars yet complement national ads, she said.
The new system brings a more uniform message to local markets, said Mark LaNeve, vice president of marketing.
Under the new program, dealers contribute a minimum of $300 a car or maximum of $500, for their area's ad fund. Volvo contributes $150 a car on the dealers' $300. To get matching funds, dealers must use ads from Fuel North America, a new unit of Volvo's national agency, Messner Vetere Berger McNamee Schmetterer/Euro RSCG in New York. Messner buys the regional media.
Dealer ad contributions more than tripled this year over 1998, LaNeve said, declining to be more specific. Dealer contributions last year varied by group. LaNeve expects the associations to spend $45 million this year, nearly as much as he projects for national media.
Volvo spent $81.9 million in national measured media last year, according to Competitive Media Re-porting. Thus, national media spending will drop significantly this year.
The factory won't buy regional TV time in late September for the launch of the new S40 sedan and V40 wagon, LaNeve said.
Dealers' reactions to the new program vary widely, from contempt to delight. 'A lot of dealers didn't want the factory's (ad) agency,' said one dealer who asked not to be named.
Kjell Bergh, a dealer with stores in Delray Beach, Fla., and Minne-apolis, said it is too soon to say whether the program is a success. His Minneapolis group consists of himself and one other dealer. He believes the program makes more sense for larger markets with more retailers and more ad dollars.
Ray Ciccolo, a Boston dealer, said he has heard other dealers complain about the new dealer funding formula, losing control of how their ad money is spent and ad content. But he is satisfied with the program. 'If you're a small dealer, sometimes you feel like you're not getting enough (ad dollars) in your market. It works.'
Separately, Volvo eliminated one of four regions July 1 in a drive to be more efficient. Most of the central region was merged with the north area because the two markets are so similar. No jobs were lost.
Ken Brusca, vice president of the central region, moved to president of Volvo Cars Canada Ltd.