DETROIT -- The auto-marketing watchword in 2009: Do more with less.
With few exceptions, executives at the Detroit auto show last week said they are dialing down marketing spending, partly to match the slowdown in sales.
General Motors has instituted zero-based budgeting, said Mark LaNeve, GMs vice president of sales, service and marketing in North America. For 2009 it started at zero and looked at how much was needed to hit objectives, reach target buyers and drive revenue.
We are not going to do anything because we did it for 20 years, he told Advertising Age, an affiliate of Automotive News. GM has cut all marketing budgets and cancelled a lot of promotions, such as courtesy cars at the Super Bowl and Academy Awards. The carmaker's so-called consumer-influencer budget took a heavier hit than media spending, he said.
GM will also try something different this year with its sales events, such as the coming Presidents' Day Sale. Instead of ads focusing on the deals, the ads for GM's vehicle brands will include key messages about fuel economy, design and quality.
Despite less spending, LaNeve said he thinks the marketing will stand out. I really believe, in spite of a lot of cuts in our overall budgets in terms of promotions, [ad] production and media, our share of market will be roughly equal to our share of voice because the competition is not going to spend as much money either, he said.
Ford Motor Co., realizing that its dealers were under so much financial pressure that they stopped advertising, has started a co-op ad program so retailers could buy media, mostly in radio and newspapers, said Jim Farley, group vice president of marketing and communications. However, to qualify they have to use creative from JWT Team Detroit.
Farley has also spearheaded a pre-launch program for the 2011 model Fiesta, which arrives in 2010. This spring, the automaker will tap up to 100 consumers to drive the existing European version of the Fiesta, then have them give feedback on social-media sites as well as to Ford engineers.
Cutbacks by competitors are seen as an advantage by Mercedes-Benz USA's Steve Cannon, vice president of marketing. He said a lot of his competitors are coming out of the gates in 2009 with more distressed marketing. Mercedes is introducing a smaller SUV called the GLK, with advertising breaking tonight. Product drives the business even in a down market, Cannon said.
Dealers will spend half their regional ad-association dollars backing the introduction, which makes the launch that much bigger, Cannon said. That's not to say Mercedes-Benz isn't shaking the couch cushions for loose change: When it launches the next-generation of the E-Class later this year, Mercedes will put the sedan and coupe in the same ads for marketing efficiency.
You have to do more with less, he said.
Chrysler's plan is to shift from a lot of national TV network to spot, partly due to uncertainty in the market, and to give it more flexibility on timing, said Vice Chairman Jim Press. We can get out of some of these long-term contracts we've had that tie up the money and takes the flexibility away, he said. Those include promotions at race tracks and deals with sports franchises; it's already trimmed back its deals with the National Hockey League.
Honda swooped up Dodge's NHL auto partnership last fall, inking a three-year deal, valued at $4 million annually.
Audi on upswing
Of all the car executives interviewed at the Detroit show, only one, Audi of America, said they planned to increase ad budgets in 2009.
Chief Marketing Officer Scott Keogh said his spending is 15 percent higher than last year, encompassing events, online and media. He said he's been encouraged by the metrics showing Audi's improvement from the second quarter of 2006 through 2008's third quarter: awareness up 15 percent or eight percentage points; consideration up 44 percent to 52 points and opinion up 20 percent -- Audi's highest metrics ever.
That's why Audi is keeping its foot on the gas by returning to the Super Bowl for a second year and will have a pair of new commercials for the Academy Awards, a show which GM gave up last year.
Said Keogh: If the industry is generally locking the brakes by cutting [ad] spending, then [sales and image] gains that may have taken five to six years we may be able to make in two to three.