With the launch of seven new, restyled or redesigned vehicles this year, Ford Motor Co. is placing more resources into marketing as it tries to build on its return to profitability and higher market share.
As head of Ford's global marketing, sales and service, Jim Farley is determined to continue the marketing momentum.
Farley, 48, has been part of the team that has led the Ford brand's resurgence, helping create a buzz about it through a variety of uncommon marketing activities. Those include the Facebook launch of the 2011 Explorer crossover and the Fiesta Movement, which put the small car into the hands of young buyers nationwide.
With the launch of the Fiesta and Focus in the next 12 months, Farley has the opportunity to continue positioning Ford as a fuel-efficient and dynamic brand on the comeback.
Farley spoke with Automotive News Staff Reporter Jamie LaReau, Executive Editor Edward Lapham and correspondent Laura Clark Geist about Ford's marketing challenges and plans for the future.
How much time are you spending with dealers?
I have kind of a board of directors for dealer principals that I've had for all of the last three years. Even in my South America job before, I spent at least one hour a day talking to dealers in the U.S. on the phone, usually on my way back home. I rotate about 10 to 15 guys and girls who I rely on. When I got here [in 2007], I set up a lot of dealer advisory boards where we set up a whole mechanism of listening, engaging, learning and discussing with the dealers. We have a very active marketing one.
The dealer council is normal but very active. We have subcommittees that we set up on profitability and standards. We have a very active product one that I'm very involved in. So two to three times a month, I'm in on a report out from the dealers and their subcommittees.
Have you had to get involved with other things, such as absorption rate and parts and service? Or has that always been on your screen?
I have always been very involved in the U.S. because it was my job for a while, and then I did the global thing with South America. Now I'm back with marketing, sales and service but globally. So with the U.S. I'm very wired in. Ken Czubay, Mark Fields and I work very closely with marketing, sales and service in the United States.
Ford has had a great year. Sales are up and market share is up. What is the next challenge for Ford marketing? Are you satisfied where marketing is?
With marketing, sales and service, the biggest opportunity for us in the next 12 months is very regionally specific. From the highest level, the launches in western Europe and the United States, and how flawless they are, are probably going to be the most important thing for the company's performance overall. The Focus is the best example -- how effectively we launch that car because it's our first truly global launch as a company. Our industry has not had global launches in mainstream business.
Also, how we approach pricing around the world. The industry -- outside of Europe -- has gotten a very healthy orientation today where if you add content in the product, you want to charge customers for it.
With the Focus being introduced next year, are you ready to battle it out with competitors on price? Is that going to be a challenge with pricing?
We're in a very fortunate situation because we're a brand that used to have a favorability gap with Toyota that was significant. And now we've closed it completely. As we spread out the favorable opinion, more people are dropping down, shopping the brand, and we can be selective of who we sell to. And we've decelerated our incentives, and you've seen the pricing in our financial results in the last year.
Is the perception gap still going to be part of your marketing messages?
Well, the biggest driver for any brand outside of quality, dependability and reliability is fuel economy. Even today, people's sense of their own wealth, their savings and how much equity they have in their home has changed dramatically. And everyone knows, even though fuel prices are low, they can go up within a couple of months. Fuel consumption is a huge differentiator for the brands. We have dramatically changed our reputation for fuel economy.
How about the digital space? You're spending about 25 percent of your marketing budget on digital? Where is that going?
When I got here, digital was really being used in transactional advertising. So when someone went deep down in Edmunds.com, and they are checking an Edge vs. a [Nissan] Murano, that's where they would find our 25 percent investment. Today, they are going to find it in the favorability, very high up in the purchase funnel. In the U.S., we've dramatically changed how we spend our 25 percent.
Around the world, we are seeing a bigger commitment [to digital marketing]. Focus gives us a chance to take it to the next level. We are actually talking to partners like Google and Facebook globally. We want to launch this product not just in the U.S. with those kinds of social media ideas; we want to do it around the globe.
How many of your dealers have their own cell phone applications?
Everyone has one for product training now. The Fiesta is probably the most dramatic that we have. We even have an app for delivery, a self-guided tour for the delivery for customers on Fiesta.
We are seeing a real explosion of dealers using Facebook and social media now. We have been co-oping and using the Fiesta launch to enable them to try new things.
Are you putting money into training them on social media?
Yes and no. We don't have a huge formal program. Every time we go to the dealers, we highlight what opportunities they have and individual sales and service professionals have. Plus, we're writing a lot of apps for smart phones so they can have the product knowledge and content.
Can you talk about the Focus launch and tell us what we can expect?
Ford has been relatively predictable on our launches. What I mean by that is that we have a pre-launch period where we aggressively launch to the people who self-select as early opinion leaders. So instead of using a huge blast of traditional media as soon as the car is wholesale, we start many months before with a large social media and earned media program. Find applications or ways for the customer to interact with the vehicle between then and launch, especially with social media, and then [follow up with] a traditional launch using traditional fixed marketing based on the customers' consumption of the media. You can expect that. The key thing here is that we're going to do that globally.
Can you talk about the wind-down of Mercury? How is that going to go from a marketing perspective? Some Lincoln dealers feel they can't go it alone without the Mercury franchise.
We are right on track with winding down the Mercury franchise. It's been a tough process because we are all very emotionally attached to Mercury. My grandfather was a Lincoln-Mercury dealer on the east side of Detroit.
We did put some special incentives -- I don't want to be specific -- on Mercury, and the inventory is moving out quickly. If you want to get the value of your franchise, you have to basically sell your inventory. So we are basically at that point with the dealers now. We're going in the final production weeks for our retail Mercury [products].
We will be discussing with our dealers where we are going with Lincoln and the Lincoln franchise. We feel like we have a much more solid base with our Lincoln products. We will be outlining to our dealers -- and have on an individual basis -- what is our network vision for Lincoln. We have more work to do. We see a mixed network of dual and stand-alone dealerships. We will focus on the metro markets, where most of the wealthy customers live.
But you are not going to abandon the rural markets?
No. Many of the rural dealers carried Ford as well. Ford business, especially with trucks, is growing in the rural markets. It's been very seamless so far. There haven't been any issues. We've worked with our dealers on the consolidation already.
Literally, we've had very robust conversations with every one of our dealers -- on the Ford side anyway -- with the consolidation. We had been working on simplifying the Lincoln-Mercury franchise just as we were on the Ford side. None of the dealers were surprised as we continued to have conversations on whether they wanted to continue or not.
Last year you said 10 percent of Ford's marketing budget is dedicated to marketing production costs, and you'd like to get that down. Have you been able to do that?
Many world-class organizations spend 3 to 5 percent of their marketing dollars on production. We've seen it on the Focus launch, which we've been working on for two years now, and we expect a level of magnitude less in cost. I can't give you specifics, but we've seen dramatic savings in working together globally as a team.
The key is how do you do that but increase the quality of the assets. You never want to compromise the quality of the assets. Last time we launched Focus, we had 20 different ad campaigns. That's not the level of complexity that we really need. Does it need to be one [ad campaign]? We'll see.
Are you happy with your current set of agencies? Or will we see changes?
We have a very unique relationship with WPP in that we have the train system that we use. It's a talent asset pool where we use teams outside of their agency network and within their agency network. It's kind of a an open architecture instead of a competing architecture where everyone is trying to pitch for the business. It's working really well.
Are you going to be in on the Super Bowl this year?
It really doesn't matter. Super Bowl doesn't matter.
Chevrolet is launching a big blitz for the Camaro. Are you going to increase your marketing muscle for the Mustang?
Customers will determine how many we sell, not advertising.
So we're not going to see a big ad blitz to catch up with the Camaro?
No. We have a very loyal group of Mustang owners, and we are seeing new customers on the V-6.
Where are these new Mustang customers coming from?
Everywhere -- subcompact car, imports, domestics. It's a very eclectic group of people, but mix is almost 50 percent of our sales now.