DETROIT -- Jan Thompson, Nissan North America's vice president of marketing, scolded the U.S. auto industry for resorting to "a less risky approach to marketing" leading to a big disparity in where automakers spend their ad dollars and consumers invest their time.
Speaking at the Automotive News Marketing Seminar in Los Angeles on Wedneday, May 31, Thompson said Nissan has extended its relationships with Yahoo, MSN and Google, which "we now recognize as networks in their own rights, able to deliver audiences comparable to prime time."
It's a recognition lost on most of the auto industry, she said, and the reason why automakers account for 25 percent, or $17 billion, of the nation's annual advertising spending. Auto marketing outlays skyrocketed over the past two decades because automakers "were having a hard time figuring out the right way to send the right message to the right person at the right time." So the industry drove the safe route by using a combination of carpet bombing and adding incremental spending for new-media tactics.
Thompson called the $17 billion figure "shocking" and told Advertising Age before the speech that new-media choices offer opportunities to save money.
Auto advertising soared in the past 20 years by 1,378 percent while new-vehicle sales increased by only 17 percent, Thompson said. The industry-wide marketing cost per new vehicle sold increased from $50 to $1,000 in the past two decades. When incentives are added, which she said totaled roughly $51 billion last year, automakers are spending around $4,000 in marketing and incentive costs for each vehicle sold.
Nissan North America spent $1.02 billion in U.S. measured media last year, according to TNS Media Intelligence. The automaker spent $950 in measured media per new Nissan and Infiniti sold, based on the automaker's 1.07 million units it said it sold in 2005, an Advertising Age analysis shows.
Thompson said the automaker has a Business Intelligence unit that includes people with doctor's degrees in math and statistics to analyze "gobs of data" and evaluate Nissan's marketing return on investments with greater precision.
Nissan's extended deal with Microsoft and its MSN arm will now cross all platforms, including gaming, mobile, blogs and search, allowing Nissan to understand how consumers want to interact with its two brands. The automaker will also develop an array of marketing programs geared to the local level for its dealers.
Nissan formed a more strategic deal with Yahoo, which Thompson said reaches 73 percent of the total online audience and streams more than 50 percent of all video streamed online, more than any other site.
The extended Google partnership will allow Nissan to use its technology to better target consumers with content relevant to them. The automaker's paid-search strategy for its recent spring sales event drove almost 40 percent of its Web traffic to the Nissan USA site and 31 percent of the event's vehicle sales were tracked back to search marketing.
The rules of "transformational marketing," as outlined by Thompson, include measuring the impact and mix of communications often; adapting faster to things that measurement shows aren't working; and getting rid of silos at ad agencies, media outlets and in client organizations. She encouraged the audience to "enjoy the revolution because we are all at the center of it."
You may e-mail Jean Halliday at [email protected]