Isn't It Amazing That Almost Every Car Buyer Kayaks and Mountain Bikes?

iMedia Connection: Reaching Consumers Around the Clock

Fawn Fitter writes this article and it is well done. However, the strategy employed by Saatchi (along with most other agencies) is one that has always left me a bit perplexed. In the article, Saatchi believes that Yaris buyers don't just watch "Lost", but they blog about it and text friends while they watch. As a result, the core of the Yaris marketing plan is digital.

Oddly enough, I was in a Toyota dealer last week and asked who was buying the Yaris. They told me that it was about 70% folks in their late 40s through their early 60s who wanted something economical with Toyota quality. The rest were younger folks that fit the expected demo. Of course, statistics show this is the same result Honda had with the Element and Scion has had with its brand. So where are all the 20-somethings if they're not buying the cars that are marketed to them? The truth is, they're buying Kias, Subarus, Mazdas, and more than all new cars combined, used cars.

On one hand, I understand that advertising a vehicle as being targeted at the 50+ crowd isn't going to get any 20-somethings in the dealership. On the other hand, to center the entire campaign around the digital world seems overzealous. A dealer in San Antonio I truly respect has commented on this issue to me many times. He contends that so many manufacturer marketing and advertising plans don't meet expectations because they fail to accurately target the real demographic that will be buying the vehicle. Actually, he and I have joked that if as many car buyers were into kayaking and mountain biking as the advertising suggests, we would be in the kayaking and mountain biking business.

iMedia Connection: The Price Clients Pay for Interactive

iMedia Connection: The Price Clients Pay for Interactive

Gerry McGoldrick writes in this article that interactive agencies have to (or should) charge by the hour as opposed to traditional agencies who charge a commission. I don't know Gerry, but with all due respect, neither are correct.

Gerry is frustrated by clients who want to compare one fee structure to the other, but it appears he refutes the argument by continuing the comparison. One can't win a debate about incomparable ideologies by then comparing them.

If you've ever hired someone by the hour you know the first concern that comes to mind. Will they complete the job as quickly as possible or stretch it out a little to bill the hours? If invoices make a client tense, the client will find someone else to invoice them. And commission, how irrelevant! It doesn't take double the effort, knowledge or resources to buy $2mm worth of TV that buying $1mm worth of TV does. Haven't clients figured this out?

Years ago I asked a small agency to give me a full estimate (including their fee) to produce a 20,000 piece direct mail. I then plugged in estimated response rates, buy rates and came out with an (unfavorable) ROI. I told them I couldn't justify their fee because the ROI wasn't working out. Their response? "We didn't know our fee was part of the ROI equation." Why wouldn't it be? That money doesn't come from a separate non-measured source!

In the end, ROI is the only thing that matters to a client. At Goodway 2.0 (and the great folks at Goodway Group) we price to ROI - period. Sure we figure our time, resources and hard costs in there. The trick is, if all of that is added up and we can't make the ROI work, we don't take the project. Additionally, this tactic takes all the focus away from our fees and puts it on the value of the ideas, execution, and overall campaign. When one side wins, we all win. After all, that's when it's the most fun.

We've Blown Up The Media Department

In our last post we talked about Yahoo! and OMD's findings of their recent consumer purchase pattern and behavior study.  In it, Mike Hess mentioned a term that made me stop and think: Channel Planning.

I thought about this and thought Isn't this just a new buzz term for Media Planning?  The only reason we re-name things is because the current term has developed a negative connotation.  Does media planning have a negative connotation?  Maybe it's because it's become formulaic and outdated to the point that it needs to be rethought.

On that same train of thought, I just started reading a recent Tom Peters book called Re-Imagine.  A great guy from my former Y&R days recommended it, but I had put it aside until now.  One of the main themes in Re-Imagine is "destroy and rebuild."  As Peters notes:

• It was easier to build Wal*Mart from scratch than to destroy and rebuild Sears


• It was easier for two geeky guys to build Microsoft from scratch than for IBM to re-invent itself


• Additionally, while Microsoft is less than 25 years old, it might be already easier for Google to build itself from nothing than for Microsoft to re-invent itself and be an agile competitor.

Is this the case with the media agency giants?  We've talked in past posts about the inability of the TV networks and newspapers to re-invent themselves, but the thought that the media agencies might be in the same boat is different and frankly scary. Lucky for you, if you're a client working with one of these large firms, you can quickly determine how up-to-date your agency has kept you and the rest of its clients in "channel planning."  Simply look at how your agency spends its clients' money by medium, and compare that against your demographic's media usage.  If it's in line, they're doing a fantastic job for you.  If they're planning TV at 80% of your budget and your consumer only spends 30% of its media consumption hours with TV, email me - jay at goodwaygroup dot com - and we'll talk.

Regardless of the industry you're in, regardless of your budget, make sure you're destroying and rebuilding strategic plans as often as new competitors surface.  That's what we do with marketing plans at Goodway 2.0 every day and it's a blast.  To some, not having boundaries and re-inventing the wheel with each plan may sound horrifying or tiring.  Just make sure the folks who feel that way aren't the ones hammering out your plan.

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Engagement, Or Lack Thereof

First, thanks to the good folks at Yahoo! for their Long and Winding Road summit series they presented here in Dallas this morning.  They are a class act and man are they on brand.  My name tag looked professionally printed and my name was even in the Yahoo! approved font.

The main topic of this cooperative effort by Y! and OMD was the purchase cycle and how it has been affected by the internet.  I agreed with most of it, although the majority of the findings were affirmations more than discoveries.  Actually, the most exciting part of the presentation for me was that a key take away was nearly identical to something I wrote about in my 6/6 posting:  Create your media plan around the consumer's daily behavior rather than starting with one medium and filling in around it. A very bright gentleman named  Mike Hess, Global Research Director at OMD, presented this and other findings.  Mike, I'm glad we're on the same page ;)

Speaking more big picture, one of the two topics/findings they covered ties in wonderfully to this week's Ad Age poll (Thanks to Tammy Cancela at New Media Gateway for this forward.) The findings indicate that there are four different "roads" to a purchase.  Quick, Winding, Long, and Long & Winding.  Now let's revisit that Ad Age poll.  The question posed is whether or not Clear Channel's idea of creating one second long radio ads will work and stay around.  Maybe for the "Quick" road described in Yahoo!'s study, but not likely for the other three.  In other words, for very low dollar purchases where there is a clear category leader - this might be fine.  For the rest of us, it's useless.

This appears to be nothing more than pain management medication for a medium that is bordering on the terminally ill.  Radio simply can't counter a) cell phone use at times when radio used to fill the time, and b) Ipods and music download services that allow you to listen to whatever you want, whenever you want.  For a year that has featured "engagement" as the marketing buzzword, this sure seems to be a step in the wrong direction.

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Are Automotive Ad Spending and Corporate Losses Related?

What a week for news. First, Jan Thompson, Nissan's VP of Marketing for North America sets the trades ablaze with her assertions that manufacturers are over spending per new vehicle retailed and that their timidity in embracing new media is partly to blame.

In the same week, the Harbor report, the industry standard for vehicle manufacturing efficiency, announced in its annual report that Nissan is the most efficient vehicle manufacturer, followed by Toyota, Honda, GM, DCX and then Ford. While quality is not part of this report, manufacturer profitability is. While the domestics did well with individual plants (landing 6 of the top 10 spots), the overall picture is what counts. The report goes on to assign corporate losses per vehicle manufactured to each of the these brands. Ford and GM showed significant losses per vehicle manufactured, while the others were profitable.

The trades didn't link these two stories together, but perhaps they should have. Thompson points out that advertising per new vehicle retailed has grown 1378% in the last 20 years while the average sticker price of a new car hasn't grown nearly at that rate. Certainly competition plays a major role. 20 years ago Toyota and Honda were just gaining respect while Hyundai and Kia non-issues. Lexus, Acura and Infiniti didn't yet exist either, leaving most of the pie for the domestics. When competition grows significantly in a highly profitable and prestigious industry, a fight is bound to break out. In this instance, it broke out in the form of markeitng spending.

So how can the industry get this under control? Surely Ford and GM can't save their way to a profit, so doesn't reducing the marketing budget sound counter-productive? Well, that depends on how you're spending the marketing budget. This is where Thompson hits a home run.

Just as things have changed in the auto industry in the last 20 years, the media landscape is equally different. See my first-ever blog (below) about the staggering declines in mass media efficiency and also the growth of more efficient marketing channels and you'll see that way people think about marketing budgets has to change. TV is great if you need to talk to 75% or more of the U.S. population. But who needs to do that? Cadillac with its less than 2.0% retail share? Acura with less than 2.0% retail share? Even Dodge with its less than 7% retail share? Hardly.

The solutions are simple, but-oh-so painful as they require a change in the way we think. First, in planning for 2007, I urge marketers and their agencies to plan their media the way the consumer plans its media consumption. For Buick that may mean starting with the 4pm TV news. For Dodge Caliber, that may mean starting with Podcasting and RSS-fed banners. Then, continue to augment and improve the plan the way to consumer further engages themselves in media. To start a media plan by dropping 200 GRPs into 36 weeks and seeing what's left is outdated, inefficient, and frankly, doing yourself and your brand a real injustice.

Second, know the facts about new media channels. When incremental funding gets approved to bolster a lagging vehicle, the challenge is to get sales up fast. So agencies think to themselves, "To place and produce TV is about a week with existing footage, Newspaper can be bought and trafficked in four days..." etc. The fact is that new media channels can be bought and produced as fast or faster than the traditional channels. Such as:

• A highly targeted web campaign with flash banners and a microsite can be bought and up in a week.
• A full SMS/Mobile text campaign can be placed and ready in less than a week
• Mobile ad banners can be produced, bought and served in 4 days
• In-video game advertising can be produced, bought and up in a little over a week

The list goes on. If marketers and agencies think about the most effective way to market their product and the most efficient media with which to do so, they'd find themselves using the channels Goodway 2.0 refers to as "precision marketing" channels far more often than they'd think.

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