Art & Commerce: Drivers Wanted

With money flooding into adland from the dot.coms, one might forget who the industry’s largest customer is. It’s the car guys–chipping in one out of every $8 spent on advertising. Since more than half of the automotive category’s ad outlays goes to over-the-air broadcasters, according to CMR, it’s not surprising that the Television Bureau of Advertising, a leading trade organization, keeps the auto industry in sharp focus.
At a recent meeting, TVB’s Automotive Advisory Committee, a group representing a range of auto advertising buyers, creators and sellers, discussed important trends and developments. The Internet, of course, was a hot topic. It has had a profound effect on the auto business, actually selling cars on occasion, but mostly equipping car buyers with better information on pricing and the confidence to bargain with the dealers.
The price-sensitive buyer will always be a feature in an industry where the typical product can cost $20,000; but 70 percent of customers are more concerned about not getting screwed than haggling over the last nickel. In other words, image and positioning remain vitally important in car marketing. In this regard, according to one speaker at the conference, the auto industry has plenty of opportunity to blast its way into the digital age.
In any given second, there’s probably more computing taking place in the typical car (ignition, braking, climate control, radio, cell phone, etc.) than in the typical desktop computer.
Today’s cars use extremely sophisticated technology and require more than the archetypical grease monkey to maintain them. Perhaps there’s an opportunity for manufacturers and dealers to reposition themselves around this technological mastery and not only tell a new story but build new businesses selling, financing and maintaining all sorts of big-ticket, high-tech appliances.
Market studies show that eight out of 10 buyers are satisfied with their car. Despite that, only four in 10 thought it likely they’d buy the same brand again. Contrast this, say, with cell-phone service, where there’s a growing degree of customer disaffection but fairly high brand loyalty. If ever an industry had an opening for relationship marketing around a good product, but with low repeat purchasing–and with a big payoff for getting it right–cars are it.
Can a 100-year-old industry make fundamental changes? It may not have a choice. The stock-market rumor that News Corp. might buy GM (to get the satellite business owned within the Hughes subsidiary) sent GM shares into orbit. That rumor didn’t pan out, but the stock’s reaction showed that many investors thought the idea credible. And the flash-in-the-pan may well have sparked an acquisitive thought or two somewhere on Wall Street.
Were GM acquired for its media properties, the buyer would likely sell the auto operation, perhaps to an Internet-rich entity with bold ideas and deep pockets. That sounds farfetched, sure. But weird stuff can happen. Three years ago, the notion that AOL would acquire Time Warner would have seemed even funnier than News Corp. and GM. Here we are on the verge of that deal. K
Alan Gottesman
is principal of West End Consulting in New York. He can be reached at