VW keeps spending on ads, which helps its market share
NEW YORK -- Car advertisers that maintain their ad spending can rev up market share in down times, gaining an edge to exploit in a recovery.
Sure, the auto industry is in the doldrums. Car sales through April this year are down 37%, to about 3 million vehicles from 4.8 million through April last year, according to Autodata's latest sales report out Friday.
But while some brands all but stopped spending on marketing, others kept or increased their budgets, particularly for new or improved models. Among those for whom that paid off:
• Kia Motors increased U.S. ad spending 43% in 2008 vs. 2007, according to ad tracker TNS Media Intelligence. Its U.S. market share is up from 1.9% at the end of 2007 to 3.1% through April of this year, according to Autodata.
• Mercedes-Benz raised ad spending 39.8% in 2008 vs. 2007. Its U.S. market share is up from 1.6% at the end of 2007 to 1.8% through April this year.
• Volkswagen raised ad spending 45.7% in 2008 vs. 2007. Its U.S. market share is up from 1.4% at the end of 2007 to 1.9% through April of this year.
VW's U.S. marketing chief, Tim Ellis, says that despite the tough sales year, 2009 ad expenditures will be held even with 2008.
"When we invest in marketing, things happen," says Ellis. "We think it's important to stick to our roots and stick to our value message. We're getting a higher percentage of the dwindling marketplace. And when this crazy situation comes straight side up again, we'll be positioned to increase our share even further."
Ellis says that three new models this year and a new ad campaign by Crispin Porter + Bogusky, which includes a big Facebook effort, should help continue momentum. TV ads begin Monday.
The campaign is dubbed "Meet the Volkswagens" and will introduce "Bus," a fully restored white and ruby red 1968 Microbus. Bus will join Max, the restored black VW Beetle that began appearing in ads a year ago. Max speaks with a German accent, while Bus will be an all-American character voiced by actor Thomas Haden Church.
Five ads running over eight weeks will promote fuel efficiency, green credentials, cost of ownership and safety by highlighting VW's performance compared with rival brands.
Ads for different VW vehicles challenge Mercedes-Benz in cost of ownership and German engineering, Volvo in safety, Toyota Prius in fuel efficiency and being environmentally friendly and Honda Odyssey in family vehicles.
The competitive jabs are intended to put VW alongside those brands on consumers' lists as they consider car purchases.
"Part of the big plan for Volkswagen is to grow the brand in the U.S.," says Ellis. "As part of that strategy, we can no longer afford to be a small, quirky niche brand here."
The marketing will include VW's first foray on Facebook on May 18. Banner ads will send people to a Meet the Volkswagens Facebook page where they can watch ads, play games and link to a blog called TDI Truth & Dare. The blog, at tdi.vw.com/tdi, aims to raise awareness of VW's TDI clean diesel models. It goes live Monday.
Why Facebook? "More and more consumers are selling products for us," says Charlie Taylor, general manager for VW's digital marketing. "Social media and word of mouth is much less about brochure downloads and more about brand awareness."