Advertising in any industry is most powerful when it is singularly focused, includes crystal-clear messaging and seamlessly connects consumers across all tiers and at every touchpoint.
But in the complex world of automotive marketing, that’s not as simple as it sounds. Our industry has long relied on a multi-tier advertising approach that allocates media spending across three distinct buckets to achieve separate objectives, resulting in a highly wasteful and sub-optimized use of one of the largest line-item budgets for both OEMs and dealers alike.
- OEMs use Tier I to feature the product as king and leverage tonality in the spot to effectively build and position their brand (“Buy Brand X”). This approach is 100% funded by the OEM.
- Dealer groups use Tier II to supplement Tier I brand messaging, provide geographic focus and feature targeted vehicles with consistent messaging across the Dealer group (“Buy Brand X in the Bay Area”). This approach generally uses commingled funds – a combination of dealer advertising assessment and OEM matching contribution.
- Individual dealer advertising at Tier III is generally much more deal-oriented – designed to create the sizzle/excitement needed to attract shoppers to their store: lowest price, highest availability, best payments, biggest discount, etc. (“Buy Brand X at ABC Motors”). This approach is 100% dealer-funded but is often heavily subsidized by OEM co-op support programs on eligible ads.
The hard truth is that it’s no longer feasible or cost-effective to treat OEM, dealer and regional advertising budgets as independent entities with different creative goals and mutually exclusive objectives. The lines have been forever blurred by the proliferation of consumer touchpoints, increasingly exorbitant marketing costs, the entry of segment disrupters and rapidly evolving consumer preferences.
The traditional automotive three-tier approach needs to be re-engineered to meet today’s market dynamics. As currently structured, it heavily splinters available budgets to marginalize the collective spend and highly fragments the messaging so that all benefits of scale are lost when a Tier I spot often bears little or no resemblance to its Tier II- or Tier III-brand brethren.
Every advertisement has the innate ability to both build the brand and provide compelling retail messaging that will resonate with consumers. You don’t have to choose between one or the other or build distinct ads with separate budgets to accomplish those objectives. Aggregating the spend with a unified message can have a tremendous multiplier effect on the perceived reach and frequency of the campaign.
For example, Mitsubishi Motors North America recently tested that model in two executions for the 2022 Eclipse Cross and then the 2022 Outlander. Both approaches used consistent creative across all tiers to combine the brand-building power of Tier I with the retail-messaging prowess of Tier III to create a more effective cross-tier strategy that generated immediate lead volumes and drove incremental traffic and sales activity directly to dealer showrooms.
Mitsubishi funded the entire production cost of the spots, and dealers funded their own advertising budgets to place the ads in their local market. The first execution running in the spring for the Eclipse Cross, musically backed by Franz Ferdinand’s Take Me Out, yielded a 50% increase in lead volumes among participating dealers and the second, featuring AC/DC’s hit Thunderstruck, yielded a five-fold increase in lead volumes among participating dealers on a comparable year-over-year basis.
For years, OEMs have aggregated budgets for regional advertising but sent the traffic to separately branded Tier II websites. As a result, many customers abandon the brand, confused by a disjointed shopping experience. Combining messaging and marketing efficiency by seamlessly bringing dealers, consumers and OEMs together on one axis costs less and generates more sales.
Dave Zuchowski (pictured, above left) is chief strategy officer for Unite Digital.