Here's the big question: What would an automotive marketer define as an event?
A sponsorship of a sports property?
A ride and drive?
A wine and cheese party at a dealership?
A vehicle display at a popular tourist attraction?
The final answer may depend on the individual automotive brand and its budget. For some automakers, an event is any program designed to foster a one-on-one relationship with customers. Others define events as broad-based programs, such as community or sports sponsorships.
There is no industrywide definition, but event marketing is growing rapidly among automakers. Those who manage events for automakers say they are seeing 50 percent to 100 percent increases in revenues and the number of events.
'The number of events has doubled in the last year,' said Alex Fedorak, executive vice president of A&M Specialists in Detroit, which has created an events division to serve automakers.
'We've seen growth in sports and consumer ride-and-drive programs,' Fedorak said. 'These events are like recreating a television commerical for consumers.'
Mike Bernacchi, marketing professor at the University of Detroit Mercy, believes the Big 3 alone will spend $345 million in sponsorships and events in 2001, up from around $330 million spent in 2000. He estimates GM will spend $175 million in 2001, a 15 percent increase from 2000. Ford is expected to spend $90 million, or 24 percent above 2000 budgets, Bernacchi said. He is expecting DaimlerChrysler to cut its event/sponsorship budget 18 percent to $80 million in 2001.
Sponsorships are up, too. IEG, a Chicago sponsorship research firm, estimates automakers spent $532 million in sponsorships in 1999, up from $448 million in 1996. In a 1999 survey of 600 events, 65 percent reported an increased interest from automotive related companies.
In fact, marketing executives on brands such as Ford, Chrysler, Dodge, Jeep, Mercedes-Benz and BMW say they are shifting money from traditional media to event marketing.
'There's been a big shift to events; we've found that for our products and our brands, we need to get as close to the customer as possible,' said Ken Enders, vice president of marketing for Mercedes-Benz USA. He said 10 percent to 15 percent of his marketing budget was moved into events between 1999 and 2000.
BMW North America Vice President of Marketing James McDowell agrees. In fact, BMW has 'historically spent 5 to 10 percent' of its marketing budget on events, but McDowell envisions a day when the importer will spend 'four times that amount' on events.
'There are some lower value-added media that we have cut back on to put more money into the Internet and into these experiential type of events,' McDowell said. Newspaper classified advertising, spot TV and general interest magazines are media BMW has cut.
Even the bigger marketers are putting more money into events.
'Event marketing is the way to go. Certainly it doesn't have the reach of traditional media, but it has value and targeting, ' said Bud Liebler, senior vice president of global brand marketing at DaimlerChrysler, who shifted 10 percent of his marketing budget into event management in 2001.
But like traditional media, events must show their worth. Automakers are studying effectiveness of these events and how to follow up with participants. Ford Motor Co. has a major initiative under way to measure events. Liebler has said DaimlerChrysler is not satisfied with the way events are being measured. Even Mercedes and BMW are trying to improve how they follow the behavior of event participants after the event is finished.
Here is an overview of several automakers' event strategies:
Ford Marketing Manager George Murphy said Ford Division will shift 15 percent to 20 percent of its overall marketing budget into events in the next year - Internet and customer care programs.
'We're still looking at what's the right mix of our media to spend, but I will say it's going away from traditional broadcast, magazine and network,' Murphy said.
'It's a lot more spot, more cable and more event kind of things. I think it's important for a person to discover one of our vehicles on their terms instead of pounding them on the media side.'
Part of Ford's enthusiasm is a result of a successful three-month run of its No Boundaries Experience event last year. Ford invited customers to try its five sport-utilities in an event that combined outdoor sports, such as snowboarding and kayaking, with off-road driving. In fact, Ford said it doubled its budget for No Boundaries and expanded the list of cities from five in 2000 to 15 in 2001.
Murphy said Ford is planning more customer events this year for its new Thunderbird and Mustang Bullet models. Ford will take both vehicles to various events and enthusiast clubs, and Murphy is negotiating several T-bird promotions, including classical music and jazz concerts.
One challenge will be to measure the effectiveness of events. Murphy said Ford and ad agency J. Walter Thompson are working on a new metrics program. Ford has tried to gather information about participants before an event, then give them 'swipe cards' to monitor where they go during and after the event.
Mercedes-Benz is targeting high net worth, high-tech consumers. In 2000, Mercedes signed a three-year agreement to become the official automotive sponsor of the Comdex shows, a six-city trade show for top decision makers in the high- tech industry. It also was the official automotive sponsor of the Consumer Electronics Show in Las Vegas.
At both shows, Mercedes offered technology-oriented displays along with its vehicles. At the Comdex in Las Vegas, M-B conducted 5,000 ride-and-drives at a special off-site course.
'We did some research and found our customers were very passionate about technology and personal computing, about fine dining and culinary experiences and music,' said Mike Russell, Mercedes-Benz USA presence marketing manager. 'We'd like to reach those customers through events.'
Mercedes is linking up with Bon Appetit magazine, Conde Nast and SavvyDiner.com to sponsor Tonight's First Course at prestigious restaurants in 19 U.S. markets to promote its new C class. Bon Appetit and Conde Nast will mail their subscribers invitations to the event. They can make reservations online at www.savvydiner.com. Once at the restaurant, participants test drive the new C class before their meal. Mercedes will pay for the appetizer.
Russell said the program runs to November 2001 and costs Mercedes-Benz $1 million. The company is hoping to generate 15,000 to 20,000 test drives.
Enders said the company's follow-up is more important than the event itself. In fact, Mercedes thinks of an event as the start of a 12- to 18-month process of consumer follow-up. It gathers information about a customer before an event, including what vehicle he or she drives and his or her preferences.
'The actual event is a piece of cake,' Enders said. 'The real work and the real payback comes from behind the scenes, what you do with that information, and how you communicate with those people.
'If people have taken time out of their busy schedules to come to the event, they are very receptive to what we're showing and what kind of questions we're going to ask them.'
Toyota prefers sponsorships and dealer events, rather than large-scale customer marketing events. Steve Sturm, vice president of marketing for Toyota Division, said staging one-on-one consumer events is difficult for the division because of its large customer base.
'Can you imagine me doing an off-road event in Los Angeles with 100 dealers?' Sturm said. 'Who do I choose to bring in, and how to I make sure that all the consumers take advantage of the activities?
'It's easier to do these events on small niche products, or products that culturally appeal to people like youth products. We're keeping our dollars about the same.'
Porsche Cars North America President Fred Schwab said the company would like to be more active in event marketing.
This summer the company is planning to bring old and new Porsche owners together at Lime Rock Park, a Lakeville, Conn., racetrack. Schwab said the company has only offered a small number of events in the past but always is amazed at the number of people who attend.
However, Porsche looks at event marketing as an additional marketing expenditure, rather than shifting money out of its estimated $9.5 million annual advertising budget.
'As sales increase and as business grows, we've got more money to spend, and we'll do more things such as event marketing),' Schwab said.
'With the Cayenne (Porsche's new sport-utility coming in 2002), we'll expand more; we've got to get known,' he said.
BMW's McDowell said the company is staying away from big sponsorships in favor of events that put customers into BMW vehicles.
For instance, the company has sponsored The Ultimate Driving Experience in individual markets for the last two years. At the event, participants heard talks on BMW vehicles, then took a ride with a professional driver. This year the event will be in 16 smaller markets.
McDowell said the company works with lists from magazine subscriber databases, R.L. Polk and BMW hand-raisers to ensure the right prospects are invited.
'We assemble that in a file where then we can say `This person looks like they are very close to making a purchase decision; let's put them on top of the pile,' ' McDowell said.
'We manage it like a mutual fund. We find out from those lists who is most likely to attend. We match it over time to see who actually buys.'
The company is also sponsoring a ride-and-drive program with American Ski Co. Resorts, which owns several premium resort hotels.