Avis, Zipcar Deal Meets Marketing Challenges

Word-of-mouth essential to car-sharing business model

For established corporate brands like Avis, buying a trendy “sharing economy” business like Zipcar is akin to gaining custody of an unruly child. Sharing companies build their brands on a connected cadre of loyal customers, and marketing to that vocal community has its challenges.

Zipcar members lit up Facebook with their opinions when giant Avis Budget announced Jan. 2 its intention to buy the car-sharing network for $500 million. Most were skeptical. Trisha Weir, a program manager at Google, posted, ”What terrible news for a modern company to be bought by out-of-touch dinosaurs.”

Shelby Clark, founder of RelayRides, a Zipcar rival, saw the Avis acquisition as a validation of the fledgling car-sharing industry, but said he recognizes marketing challenges abound. Key issues are brand awareness and authenticity. “First you show people how your network operates, then you need to maintain an authentic voice and emphasize your community,” he said.

As any sharing company grows, it becomes increasingly important for it to be transparent, maintain its authenticity and help people understand new [business] relationships can be good, Clark added.

Social media and local events have anchored Zipcar’s marketing up to now, with about 97,000 likes on Facebook and 19,000 followers on Twitter. (The company has about 760,000 members.) Social media outreach promotes branded contests, charity fundraisers and crowdsourced projects.

Both Zipcar and RelayRides use digital ads to build awareness. On the traditional ad front, Zipcar has run quirky out-of-home ads in cities where it has high membership, such as San Francisco. RelayRides ran a TV ad in November 2012 in its major markets, including Boston.

But the real meat of marketing for a sharing company is through its members. RelayRides’ Clark said its most effective marketing comes from “evangelizing our members. We share people’s amazing stories of what they have been able to do when they rent our members' cars." Likewise at Zipcar. A popular activity among Zipcar’s Facebook fans is sharing pictures from road trips they've taken in their rented cars.

For Avis, which has only 14 percent of the Facebook following of Zipcar (about 14,000 likes), this might mean a learning curve ahead. “We are committed to retaining the elements of the Zipcar brand and culture that have allowed Zipcar to achieve such rapid growth and success over the last 12 years," said CEO Ronald Nelson in a statement. But as far as marketing goes, “pending shareholder approval, it is premature to speculate on what the impact might be on the marketing and advertising of either of the brands involved,” said an Avis rep.