How automotive advertising works

Andy Nairn

Admap

May 2014

 

 

How automotive advertising works

Andy Nairn

Lucky Generals

Analysing the IPA Effectiveness case studies for auto advertising shows that ads that target penetration, rather

than loyalty, and that balance emotional cues with rational information work best.

The UK automotive industry generates revenues of £59 billion a year, according to the Society of Motor Manufacturers &

Traders. Advertising has always played a huge role in the business, but the relationship between communications and the

bottom line has sometimes been unclear. No manufacturer would seriously question the general importance of advertising in

this market, but many do grapple with the more specific questions of what works best, where and why. And effectiveness

experts regularly note that proving accountability in this market is 'fiendishly difficult' (as the IPA notes).

Picture courtesy of Bartle Bogle Hegarty

In an attempt to dispel some of the mystery, the IPA recently commissioned a review of all the automotive papers in its

Databank. Drawing on 51 papers, spanning four decades, five continents, 200,000 words, 23 marques and all the major

product sectors, this is the largest, and most robust, study of its kind ever to be conducted.

Naturally, for a full understanding of the nuances and variations in this vast and complex category, it is necessary to read the

full report. However, it is still possible to identify some common ground, for the purposes of distilling best practice. In particular,

seven key themes emerge across the piece:

1. The particular importance of a good product

   Title: How automotive advertising works

   Author(s): Andy Nairn

   Source: Admap

   Issue: May 2014

 

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The vast majority of papers in this study acknowledge the importance of having a strong product in the first place. This pre-

dates the more general truism that, in the digital era, good advertising cannot hide poor quality: it is a more specific

observation, based on the unusually physical, public, visceral and well-scrutinised nature of this particular product. For

instance, way back in 1986, the Ford Granada paper noted that:

'In the car market, impressions of both manufacturers and models are based primarily on the products themselves. Advertising

can only help shape these reactions and responses such that good cars are seen to be good cars, and reacted to as such, by

as many potential prospects as possible.'

Put another way, while consumers are unlikely to compare bread brands side by side, or consult magazines to decide their

supermarket of choice, or investigate a charity's efficacy, or ever experience their insurance provider's claims service – they

will do all this, and more, when it comes to buying a car.

2. The insufficiency of a good product

However, while it is true that 'success in the automobile industry begins with great products' as Alan R. Mulally, Ford CEO and

President, said in Ford's 2011 annual report, it does not end there. The ultra-competitive nature of this market (compounded

by chronic over-supply), means that all of the most successful campaigns in this study did much more than just 'show a bit of

metal'. In fact, several of the IPA papers refer to equally strong rivals who fared much less well1, previous launches of the

same product that were much less successful2, or international campaigns that did not achieve the same results for the same

car3. The 2002 Skoda paper cites all three.

What is clear, then, is that car marketers must use a good product as a springboard for success, and not as a guarantee. This

simple truth occasionally seems to escape some manufacturers.

3. A strong, enduring vision

Over and above the product, it is telling that many of the strongest campaigns appear to be driven by an inspirational

corporate vision. This sense of purpose has been identified in other studies, as a key predictor of success4 but seems to be

particularly true of this market. For Audi, the philosophy was encapsulated as 'Vorsprung durch Technik': a German mantra,

which advertising has made familiar to 84% of the British public5. For BMW, it was the pursuit of 'the ultimate driving

machine'6. For Honda7, it was the founder's belief in 'the power of dreams' and, for Saab, it was the desire to live up to the

company's aeronautical heritage8.

Perhaps the most radical example of this purpose-driven advertising approach, though, was Daewoo's launch into the UK, in

1995. Here, the vision was nothing less than redefining what it meant to be a car brand. The company was the fourth Korean

entry to an already oversupplied market. Its budget was small and its vehicles were unexceptional. But the agency-client team

identified a great deal of dissatisfaction about the whole process of buying a car.

Armed with this insight, Daewoo took the audacious step of positioning itself as a service, rather than promoting its cars as

products. Its entire marketing strategy then flowed from this vision: from its generous use of warranties to its family-friendly

showrooms. Daewoo virtually hit its three-year target within 12 months, making it the most successful marque launch since

1975.

4. A penetration strategy, rather than loyalty

 

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Armed with a decent product and a strong vision, the next question is whether to pursue growth via penetration or loyalty. The

answer appears to be the former. A previous analysis of the full IPA Databank has shown that penetration-focused campaigns

are three times more effective than loyalty-focused activity9.

The same study concluded that campaigns for durable goods (which would encompass cars) show an even greater bias

towards attracting new customers. Meanwhile, several other academic reports10 point to the difficulties of boosting loyalty in

the car market, unless as a side-effect of increasing penetration in the first place. So it would appear that car manufacturers

are more likely to grow via new customers, rather than by seeking to boost retention as a primary aim. Indeed, several of the

papers in this study imply that overly high levels of loyalty can be indicative of a marque that has stagnated, and has become

off-putting to others11.

5. The right balance of emotions and rational information

Previous Databank analysis has shown that emotional strategies typically outscore rational approaches on virtually every

single measure of commercial success. However, this finding by Binet and Field was accompanied by the caveat that: 'in

categories where purchase intervals are long… it may be effective to target passive consumers with more emotional brand

messages, while using more information-rich channels to influence active shoppers.'12

The automotive market certainly seems to be one of these exceptions to the rule. Almost all of the successful car studies in the

Databank use emotions to great effect: this reflects the profound role of the car in our lives and society. However, most

campaigns also underpin this visceral appeal with a more logical tack: this reflects the need for some rational (or often, post-

rational) reassurance for such a big purchase. In other words, a balance needs to be struck, depending on the brand and its

business problem.

For instance, Honda was always seen as a very functional marque in the UK. The company's 2004 paper describes how it set

out to engage people with a much more emotional approach. This strategy – brought to life with animated hummingbirds,

philosophical bananas and enigmatic bottles of perfume – transformed perceptions of the brand and generated £388 million of

incremental revenue (or £84 million of extra profit) for Honda within two years.

 

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Picture courtesy of Nexus and Wieden+Kennedy

In contrast, Audi recently had the opposite problem: a brand that was very emotionally resonant, but seen as lacking

substance when it came to practical issues such as affordability, fuel efficiency, environmental credentials and taxation

bracket. The company's 2010 paper describes a shift to a more rational communications model, albeit one that was true to the

marque's aspirational heritage. More than £50 million of incremental profits were generated in the first year: a short- term RoI

of 1.7 to 1.

6. A brilliantly flexible creative idea

A well-balanced strategy is worthless without the right execution though. For, in the words of Bill Bernbach (the creative

behind Volkswagen's iconic campaigns of the 1960s), "If your advertising goes unnoticed, everything else is academic."

The relationship between creativity and effectiveness has been proven time and again: most recently in another Databank

analysis13 in 2011, which found that campaigns which had won major creative awards were also 12 times more likely to

demonstrate major commercial effects.

However, this is precisely where many car manufacturers appear to go wrong. It is difficult to think of another category, where

there is such a divergence of creative standards. On the one hand, it is often noted how 'conservative'14, 'dull'15 and

'clichéridden'16 much car advertising is, 'with its laboured shots of leather interiors, alloy wheels and sleek bodywork'17

according to Superbrands Volume VI and its 'fantasy driving sequences with beautiful people'18 (Daewoo's case study). But,

on the other hand, there are all the case studies cited in this paper, which do not exhibit any of these faults. It surely cannot be

coincidental that the IPA's Databank of the most effective car campaigns contains virtually no examples of the former, and

many of the latter. Or that manufacturers appear to be learning for themselves, and consciously seeking to improve on this

front.19

So it is certainly true that the commercially successful campaigns contained in this study have been unusually creative.

However, beyond this – and perhaps an understandable bias towards product demonstration over comedy or celebrity – there

 

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is no single formula for success. Indeed, the complex nature of the car market means that the most successful campaigns are

often the most loosely defined. Several of the papers talk of the importance of focusing on an enduring tone of voice, that will

allow many different messages to be incorporated over time and across media.20

Or, as the 2006 VW Golf case study put it: 'How have we achieved this enduring [success in the UK over 30 years]? Ironically,

because client and agency have never defined the brand too rigidly. There has been no one creative idea, no single endline,

no brand onions or pyramids. Instead, communications have been unusually free – able to reflect the times, without ever

getting trapped in any one time.'

While simpler categories may require a more traditional, single-minded approach, it appears that the most successful creative

ideas in the car market are those which are brilliantly flexible, not just wonderfully simple.

7. A 'Snakes and Ladders' media model

Car advertisers have always had to deal with a more complex customer journey than most marketers. At a simplistic level, this

has meant that they have used more multi-layered channel strategies than is normally the case. So, the car case studies in the

IPA Databank over-index on most of the main media (Figure 1).

Figure 1

This, then, is an example where car advertisers are actually ahead of the game: previous analysis of the IPA Databank has

shown that multi-layered campaigns are generally more effective than single-channel campaigns. However, within this

simplistic overview, a number of more profound points emerge.

Firstly, TV advertising remains an extraordinarily powerful force in this market. Previous analysis of the Databank has shown

the medium's enduring – and, indeed, increasing – effectiveness in the world at large. But many of the papers testify to its

even greater potency in this sector, because of its highly public nature21, its unrivalled ability to convey emotions22 and

stature23, its social value24 and its galvanising effect on the dealer network25. What is also clear, though, is that TV is

undergoing a transformation of its own and that car advertising is at the vanguard of these changes. For while the early papers

typically described big, blockbuster TV ad spots, the later papers cite everything from in-film placement26 to movie

production27, YouTube strategies28 and brand-specific channels.29

Secondly, outdoor advertising and direct marketing remain unusually powerful weapons in this market. Of course, like TV,

these media are being transformed by digital technology, but there will always be a need for what they do best: namely build

roadside presence and nurture a high-quality relationship with customers, respectively.30

 

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Thirdly, and most profoundly, the deployment of all these different media layers has changed, in response to the more complex

customer journey described above. The early case studies invariably described a 'sales funnel', whereby broadcast

advertising would be used to build long-term desire among 'passive' buyers who were not 'in market' – then more specific

channels would be used to persuade the much smaller group of purchasers who were 'actively' shopping at any one point in

time.

However, the modern papers talk of a consumer who is 'always on' and so needs to be engaged throughout the year, and

across all sorts of touchpoints. In this new model, the neat, sequential layers of yesteryear are replaced by messier media

structures, which 2011's Fiat case study described as being 'more like snakes and ladders than a funnel'.31 the evidence from

these later papers is that creative channel planning will be just as important as executional brilliance going forwards.

The automotive market is vast and complex. But despite this, successful brands do seem to share some common

characteristics. Although the market will continue to change dramatically, these fundamentals are likely to remain true. While

evaluation will remain difficult, the principles of best practice are increasingly clear.

The article is a summary of 'Effective marketing strategies for automotive campaigns', which can be found on the IPA's

Effectiveness hub: http://www.ipa.co.uk/effectiveness.

About the author

Andy Nairn is a co-founder of Lucky Generals. He is also an expert on effectiveness, having won more IPA Awards than any

other planner, and was made an inaugural member of the IPA's Effectiveness Hall of Fame in 2013.

andy@luckygenerals.com

Further reading

1. Ford Galaxy (1998), Renault Clio (1992), Audi (1990) IPA case studies

2. Skoda 2002 IPA case study

3. Renault Clio (1992), Honda (2004) and Audi 2010 IPA case studies

4. Built to Last by Jim Collins and Jerry I Porras, Random House Business, 2005

5. Audi IPA case study 2008

6. BMW IPA case study 1994

7. Honda IPA case study 2004

8. Saab IPA case study 1998

9. Marketing in the era of accountability, by Les Binet and Peter Field, 2008

10. Reichheld (Harvard Business Review) and Experian (Automotive Loyalty survey)

11. Ford Galaxy IPA case study 1998, Skoda IPA case study 2002 or Honda IPA case study 2004

12. Marketing in the era of accountability by Les Binet and Peter Field, 2008

13. The link between creativity and effectiveness, 2011

14. Nissan Micra IPA case study 1994

15. VW IPA case study

16. Daewoo IPA case study 1996

 

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17. Audi IPA case study 2008, quoting Superbrands Volume VI

18. Daewoo IPA case study

19. Honda 2004 IPA case study

20. The BMW (1994), Honda (2004) and Audi (2008) IPA case studies

21. Skoda 2002 IPA case study

22. VW 2006 IPA case study

23. Daewoo 1996 IPA case study

24. Nissan 2012 IPA case study

25. Honda 2004 IPA case study

26. BMW 2004 IPA case study

27. BMW 2004 IPA case study

28. Nissan 2012 IPA case study

29. Audi 2008 IPA case study

30. Audi 2012 IPA case study

31. Fiat IPA case study 2011

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