Consider the state of affairs when viewers tuned in to the Super Bowl in February: Banks had failed, a stimulus package still hadn't been announced, and unemployment was surging toward 8 percent, up from 4.8 percent the year before.
Escapism was the order of the day, and most advertisers played right along, with brands like Coke and Pepsi offering saccharine happy-happy-joy-joy visions that jarred with the bleak reality.
But one advertiser didn't. In the third quarter, in an otherwise standard-issue cars-rolling-through-landscape spot, a voice-over brought into the light of day something that ranks up there with death and erectile dysfunction as something people don't want to talk about.
"Now finance or lease any new Hyundai, and if you lose your income in the next year, you can return it with no impact on your credit."
With that bold stroke, Hyundai -- yes, Hyundai, an automaker not historically known for fearless marketing -- began in earnest a frontal assault on a recession that was not dampening consumer enthusiasm but drowning it.
But while the brand's Assurance program received heavy support, it wasn't the sole route of advance for the Fountain Valley, Calif., automaker. Hyundai also took an upmarket route with its successful efforts to push the Genesis, its entry into the premium-car market that also was pushed during the Super Bowl as well as during the game's female-skewing equivalent, the Academy Awards, where the carmaker bought an eye-popping nine spots.
By engaging with both the broken dreams and the intact ones through high-profile ad buys that garnered plenty of positive press, Hyundai stood in sharp contrast to the tail-between-the-legs mode of its rivals, many of which had slashed budgets and retreated into retail-focused advertising. The effort was recognized by readers of Automotive News sister publication Advertising Age, who named Hyundai this year's top U.S. marketer in an annual poll.
Forty percent of readers selected Hyundai in a vote on AdAge.com. It was followed by Wal-Mart (30%), McDonald's (14%), Lego (10%) and Amazon (7%).
Example of opportunism
An example of the opportunism: those nine Oscar spots -- purchased when General Motors, then on the verge of bankruptcy, bailed out of the show. For Hyundai, the overall results were clear: Sales and market share were up and its brand image overhauled.
Hyundai's market share jumped to 4.3 percent in the first 10 months of 2009 from 3.1 percent in the same period a year ago. In September, while the industry overall suffered a 22 percent sales drop in a post-cash-for-clunkers hangover, Hyundai managed to increase its new-vehicle tally by 27 percent to 31,511 units.
Scott Fink, chairman of Hyundai's national dealer council, said he has more showroom traffic today than two years ago. And while his New Port Richey, Fla., dealership used to get mostly Detroit model trade-ins, he's now seeing mostly Japanese nameplates.
Fink said many Saturn Auras, along with BMWs and Mercedes-Benzes, are being traded in for the new Genesis. "We're really eroding other brands," he said.
Before the recession, "these same people [that] never would have been caught dead in a Hyundai" might have worried about what their neighbors would think, Fink said. "Now people are very comfortable because the brand has been elevated. We used to be a price player, but now we're a mainstream player."
Searching for stability
A lot has been done to change an ingrained image of Hyundai in a short time. Hyundai entered the United States in 1986 with small, affordable, entry-level models that were often the butt of jokes by late-night TV hosts. After early success with these cars, Hyundai hit a speed bump with quality.
The automaker started building momentum in late 1998 after introducing the industry's first 100,000-mile warranty, repricing its lineup closer to transaction prices and slashing build combinations. In the middle part of this decade, Hyundai management ranks had a revolving door, and there was a great deal of instability at the company.
Ex-COO Steve Wilhite disbanded all regional dealer ad groups shortly after he signed on in 2006. That angered many dealers and slowed momentum, as the move eliminated about $300 million in regional ad spending for uniform messages. Most groups have since re-formed.
In early 2007, things began to stabilize. Joel Ewanick, Hyundai's vice president of marketing, arrived from Richards Group, then Hyundai's creative and media agency, where he had been director of brand planning.
In Chris Perry -- the director of marketing communications who had been at Hyundai since 2000 -- Ewanick found an ally who thought along the same lines he did.
Ewanick said the two men "share the same mind-set" for marketing, so they don't need to be at all the same meetings. That's why Perry has autonomy in many cases to make decisions for fast-track online ad deals, and "he doesn't have to wait for me," Ewanick said.
Agency ditched
One major move came quickly. In April 2007, after a two-month review, Ewanick ditched his old shop and hired Omnicom Group's Goodby, Silverstein & Partners to handle advertising.
One of the team's most important challenges was helping Hyundai get into the driveways of more affluent drivers, something auto pundits were skeptical of. The then-new Genesis sedan started in the $30,000 range and was the automaker's most ambitious and priciest product ever. (Hyundai launched the two-door coupe version during the Super Bowl this year.)
Nevertheless, Hyundai Motor America was in a funk at the end of 2008. With the U.S. auto industry in a tailspin because of the economy, the credit crunch and plummeting consumer confidence, the brand's fourth-quarter sales dropped 41 percent -- more than the total industry's 34.7 percent. And Hyundai's 2008 vehicle sales slid 14 percent from the prior year's tally of 467,009 -- the highest since the American arm of the South Korean carmaker started selling here in 1986.
The Genesis launch also wasn't exactly a huge hit, as early sales targets were missed and dealers became disenchanted with Goodby's "Think About It" campaign. By fall, there were reports that the Hyundai-Goodby relationship was about to fall apart.
The genesis of Assurance
But this year was a different story. In the first week of January, the automaker announced it was launching the Hyundai Assurance program to let buyers or lessees return their new vehicles if they lost their jobs within the first year of ownership. The program was launched with Goodby's high-profile commercial during the Super Bowl and another in-game spot dubbed "Bosses" that touted the Genesis' win as North American Car of the Year at the Detroit auto show. Hyundai scooped up sponsorship of the pre-game show and three 30-second commercials there.
"This is a recession of fear," Ewanick told Advertising Age in February. "We realized that the elephant in the room was the fear of losing your job. I feel the same way. We all do. The idea of giving people the option to give the car back if they were struggling … seemed a great way to make customers comfortable and increase our market share in an economy like this."
In a recent interview, Ewanick said the Assurance program came together in 37 days from concept to ads on the air. A relatively lean, flat organization has been one of the automaker's core strengths, he said.
"One of the things that have served us well is our ability to adapt quickly to the changing economy and competitive marketplace," Ewanick said.
Nielsen's online post-game survey found that 43 percent of participants said Hyundai's Super Bowl ads improved their opinion of the brand. Rebecca Lindland, research director of the automotive group at consultant IHS Global Insight, said the Assurance plan "made people feel Hyundai cared about their situation -- that they were sympathetic, and there's a lot of human emotion sort of selling there."
She said Hyundai is "certainly outpacing the market this year, gaining significant share."
Americans were apparently so wowed by the ads and press exposure of the Assurance program that consideration for new Hyundai vehicles jumped to 59 percent in the first two months of the year, CNW Marketing Research found.
Filling a void
Hyundai followed up its Super Bowl gambit with an ad blitz during ABC's Academy Awards broadcast, the brand's first national play with the Oscars. The automaker's new media agency, Initiative, of Irvine, Calif., had alerted Hyundai to the void left by financially ailing GM as exclusive auto sponsor of the program.
Hyundai will be filling that vacuum for three years, after signing a deal less than two months before the broadcast.
Hyundai also signed a deal with the Fox network to place vehicles in "24" and advertise during the show, after Ford Motor Co. pulled out.
In April, the automaker dropped Goodby and moved its national creative account, including digital -- without a review -- to Innocean Worldwide Americas, a subsidiary of the automaker's South Korean parent, Hyundai Motor Group. Innocean also provides media oversight, promotion and event planning for Hyundai and affiliate Kia Motors America.
Jim Sanfilippo, executive vice president and CEO of Innocean's Irvine, Calif., office, said Goodby was "a tough act to follow." After reviewing all the metrics, which Innocean had as media coordinator, the agency opted to stick with the "Think About It" theme.
"We love the brand voice that Joel has achieved, and that's rare in automotive these days," Sanfilippo said of Ewanick's work. Hyundai is "no longer an alternative; we're a rival," Sanfilippo said.
For the first half of the year, Hyundai posted an all-time high U.S. market share of 4.2 percent, compared with 3.1 percent at the end of June 2008. And although June sales slid 24 percent from the prior June, Hyundai outsold Chrysler Group's Dodge brand for the first time. That boosted Hyundai to the sixth-biggest brand by sales in the United States in the industry's worst climate in decades.
The month brought another accolade: Hyundai ranked fourth behind Lexus, Porsche and Cadillac in consultant J.D. Power and Associates' annual Initial Quality Survey. In 2008, Hyundai ranked 13th in that survey, in which consumers rate their new vehicles after 90 days of ownership.
The automaker kept the pressure on competitors in July. Rather than advertise incentives that can damage brand image, Hyundai introduced Assurance Gas Lock, which guaranteed summer buyers $1.49 per gallon for a year. The feisty automaker then jumped the gun in early July, weeks ahead of the federal government's cash-for-clunkers' program, with an ad campaign saying it already was offering the tax credits ahead of Uncle Sam's July 24 start date.
Good marks
Hyundai saw the clunkers program coming and understood the government's rules, “so we mobilized the program and had ads running July Fourth weekend," said Ewanick. Hyundai's messages of the early clunker rebates, along with the Assurance and Gas Lock programs, gave the brand "a better and richer story to tell," he said.
In early October, Hyundai started advertising the new HyundaiMomentum.com, a Web site for people to see what third parties are writing about the brand's cars and trucks. Ads from Innocean will run online and during NFL TV broadcasts through November.
"We have been receiving a lot of accolades, awards and positive reinforcement from the press and consumers, and shoppers are noticing this," said Perry, Hyundai's marketing communications director. "We needed to find a way to harness this momentum and offer it up in a way that is easy for the consumer to access and understand."
"Hyundai is really ahead of the game," said Art Spinella, president of CNW Marketing Research. The brand has managed to capture many shoppers who had Toyota on their lists, he said.
Hyundai is building its brand and consideration the same way Toyota did decades ago, Spinella said, "with a good car at a good price and a lot of exposure with a lot of ads."
Hyundai said 60 percent of Americans today are now aware of the brand and willing to buy it, compared with just 40 percent two years ago. Ewanick credited better products backed by the "Think about it" campaign.
"It's a proof campaign, and we are giving people evidence about our cars and our quality and our styling, and we keep shoveling on the facts and information," he said.
Different buyers
Ewanick admitted his budgets have been flat and will stay that way in 2010, give or take a few percentage points. This year he shifted dollars from print to online, buying more on newspaper and magazine sites.
The automaker spent nearly $115 million in U.S. measured media in the first half of 2009 vs. $107 million in the same period of 2008, according to TNS Media Intelligence. Both figures are without Internet spending. Hyundai spent $348 million last year, including Internet, TNS reported.
"Hyundai has been very successful with their new-product launches," especially the Genesis line, said Alexander Edwards, president of the auto group at consultant Strategic Vision. The sedan and coupe attract buyers with median annual household incomes of $120,000, compared with $75,000 across the rest of Hyundai, Strategic Vision data show.
"Clearly the Genesis has brought in a new kind of buyer to Hyundai," Edwards said.
As for what rivals make of Hyundai's innovation streak, he said, the "Bosses" Super Bowl spot showing German- and Japanese-speaking car execs screaming at underlings because of Genesis' Car of the Year win isn't so far-fetched. Competitors that Edwards wouldn't name, including mass and premium makers, are asking him, "What do we have to worry about with Hyundai?"
Said Edwards: "Everybody wants to find out what Hyundai will do next."
