Special Report: Automotive

DETROIT For all the talk about the automobile industry’s marketing move to the Web and its over-reliance on key prime-time media buys, the networks can take heart in the knowledge that their upfront pitches are still crucial.

Still, they may also want to consider that, because of the auto industry’s continued fragmentation, automakers can turn a profit on lesser sales without the big media buys. Pontiac last summer became the first automaker to launch a model, the G5 sedan, with an all-Internet campaign. Meanwhile, the Big 3 automakers’ combined spending on broadcast has declined 4.3 percent.

Of course, Ford will continue its sponsorship of Fox’s American Idol to build awareness of its youth-targeted Edge crossover. Toyota’s prime-time product placement will also continue; marketing for its Tundra has included mentions on Fox’s 24 and NBC’s Friday Night Lights.

Automakers, both domestic and import, continue to turn to the Web and other alternatives in their search for measurable media that deliver—without spending the huge dollars the upfront commands.

“Ideally, I’d like to have click-screen data from television as I have from the Internet and from other forms of digital media,” says Mark Kaline, global media manager for auto giant Ford, speaking at a conference on the upfront this month in New York. “That’s somewhat of a far-off hope and dream. I don’t think we should take our eye off of it as television becomes more and more digitalized.”

Ford, which traditionally has been bullish on broadcast, last year increased its TV spend by 16 percent to $1.3 billion, per Nielsen Monitor-Plus, representing nearly 75 percent of its $1.75 billion total ad outlay.

Hyundai, whose latest campaign includes a large broadcast buy and spots that compare its models to luxury brands BMW and Lexus, will do big business in the upfront, says marketing chief Joel Ewanick. Hyundai is fast becoming a major player in the U.S., selling 455,520 vehicles last year, a 21 percent jump versus 2002. The Korean automaker last year spent $420 million on TV ads, 76 percent of its total ad spending of $549 million.

“This is your opportunity to get exactly what you want and design it and get out front,” Ewanick says. “We have strategic plans, and if we don’t do this [upfront buy], well, we will have to patch it together later. So we come and say, ‘This is what we’re going to do.'”

Ditto Suzuki, a minor player that last year made news for doing much of its online buy upfront, one of the first automakers to do so.

“The upfront is, in a way, more important for niche players like us,” says Gene Brown, vp, marketing. “If we come to the market late, we won’t get something that is affordable.”

Because of limited inventory, the upfront is just as important for Web buys as it is for TV, even though the wisdom was always that network deals were a top priority. With a limited number of third-party sites for shoppers to compare vehicles, Web buys can outstrip broadcast in terms of importance.

“There is no equivalent to Kelley Blue Book on television,” Brown says, referring to one of the top sites.

For some brands, TV and the masses it brings doesn’t pack the punch it used to.

“I’m going to Whole Foods, not Costco,” says Tim Mahoney, chief marketing officer for Subaru, suggesting that the mainstream reach of network does not suit his needs. Subaru will sit out the upfront but, Mahoney says, will boost its investment in print by 60 percent.

“We’ve shifted a lot of emphasis from a media perspective,” he explains. “We are doing more spot-market investment in TV, and as a niche player, I can be laser focused. For the Impreza WRX, I can just buy in the X Games, and for the Forester, I can buy on HGTV. I like that ability. So we haven’t gotten too involved in the upfront this year.”

That represents a major change for the brand, which last year spent $104 million of its $159 total ad budget on TV. It sold 200,703 autos, an increase of 2.4 percent over 2005.

Despite all the buzz, Internet doesn’t always deliver. Pontiac’s Web-exclusive campaign last summer in support of the new G5 translated to total 2006 sales of a dismal 7,902 units.

“The upfront is a long process, but we don’t expect there to be huge changes,” says Christine MacKenzie, executive director, multibrand marketing and agency relations at Chrysler. “The issues of measurement have not been worked out, and that remains to be a challenge. The opportunities for integration with various media channels will continue to be part of the negotiation.”