Is online advertising a good vehicle for reaching brand advertising goals?  Judged by their actions, more and more advertisers are voting “yes.”  During the past several months, we’ve observed a gradual but decisive stride from an ambivalent stance toward a full embrace of online media as a branding tool.

This past week, we witnessed a Ford display campaign that to us represented a noteworthy waypoint in the development of online ads designed for branding objectives: ads that reject the click. 

Continue reading “Ads That Reject The Click” »

Toyota recently announced an aggressive plan to drive US sales after losing ground to rivals.  The plan includes $1B in marketing spend in Q4 2009, which AutomotiveNews reported would make it Toyota’s largest Q4 spend ever.   Compete reviewed Toyota’s Share of Market Interest (SMI) to reveal one element of the plan’s baseline: demand relative to the market.  Brand SMI is the share of all in-market new vehicle shoppers that shopped one or more models within a given brand; shares across all brands total over 100% because most consumers shop more than one brand.

Continue reading “Toyota Spending Big to Get Off the Sidelines” »

In a recent Compete blog, we discussed the cash for clunkers government program CARS (Cars Allowance Rebate System) and the amount of online attention it drew from new vehicle prospects, both in terms of unique visitors to the cars.gov site and to OEM sites. That attention, combined with attractive incentives to junk an old gas guzzler and replace it with a newer, more fuel efficient model contributed to a July sales surge of more than 15% month-over-month. While sales remained down compared to a year ago, the program proved to be a much needed shot in the arm for an industry struggling to get back on its feet.

But how much of that increase in OEM site traffic can we tie to back to the cash for clunkers program? Taking a deeper look at Compete’s online panel of consumers, we were able to track the number of consumers who searched for information on cash for clunkers (or some variation of clunkers) during the month of July. Not surprisingly, the number of searchers sky-rocketed during the last two weeks of the month with 1.2 million searching for information during the last week alone.

As the number of clunker searchers was going through the roof, a significant proportion of those people also visited an auto OEM site. In fact, more than one-third of overall searchers also visited an OEM site during the last two weeks of July, reaching 400,000 the final week. But the lift among OEM visitors was not as great as the overall lift among clunker searchers in general. That suggests there was a lot of curiosity in the program that did not translate into engagement with an auto manufacturer, meaning the sales contribution may have been less than it could have been.

So who benefited from all that clunker traffic? Certainly, you’d expect those automakers known for their fuel efficiency such as Toyota and Honda to get the attention of clunker searchers and in fact that was the case as those two brands led the way. A whopping 42% of clunker searchers also visited toyota.com, nearly three times the rate of Honda. But that’s not too surprising since when someone googled “cash for clunkers” the number one sponsored link was toyota.com/cashforclunkers. And as a measure of Toyota’s success, they had 3 of the top 5 models purchased as part of the program – #1 Corolla, #4 Prius and #5 Camry.

Taking it a step further and comparing clunker search share to a brand’s Share of Market Interest (a Compete measure of a brand’s share of market-wide shoppers) Toyota and Dodge interest associated with the program outperformed on their ability to attract clunker searchers. Honda and Nissan performed on par while Ford underperformed versus its shopping share

Dodge’s performance is of special interest since it doesn’t necessarily have a reputation for fuel efficiency and it doesn’t offer any hybrid models. However, Chrysler offered incentives that matched the cash for clunkers incentives which allowed them to effectively piggyback on the program. This likely helped drive consumer interest in Dodge as well as the other Chrysler brands as both Chrysler and Jeep searches also exceeded their SMI.

Ford is a different story. Its SMI has been driven to a record high 22% on the growth of the 2010 Fusion and recently launched Taurus. Yet just 15% of clunker searches also visited fordvehicles.com. It appears that while clunker searchers where interested in fuel economy, Ford shoppers have been more interested in the company’s new models.

While cash for clunkers is no doubt having a short term impact on auto sales, the real question going forward will be around its long-term effects, especially now that the program has been extended. These programs – like the assurance programs launched earlier in the year - tend to have their greatest impact in the first month of two and then taper off. And while July sales were up month-over-month they still trailed compared to a year ago. The industry’s struggles are far from over but cash for clunkers provides a needed boost. As buyers are pulled forward and inventories continue to fall, keeping the sales momentum going through the end of year will be a challenge. To best capitalize on cash for clunkers and similar tactics, automakers need to monitor overall brand and model demand as well as keep pace with search dynamics and how it drives that demand.

On June 1st, DC Shoes released what became a viral video of their sponsored rally racer, Ken Block, tearing through a Los Angeles wharf in a custom built Subaru WRX. After it blasts out of a warehouse, the modified rally car screeches around cinder blocks and between steel freight containers – narrowly missing every obstacle. Videos like this, with their raw camera angles and Matrix-like slow-motion, bring out the dare devil in all of us… and offer a perfect opportunity for some well placed advertising and product placement. The big three brands in this video were DC Shoes, Subaru, and Monster Energy, whose graphics cake the exterior of the WRX. To digitally set the stage, several teaser videos were released in the weeks prior to the video’s launch. Compete leveraged its proprietary databases of consumer web behavior to reveal how the combination of teaser videos and the actual video created a return on investment for all three brands based on changes in site traffic.

The automotive sections of DC Shoes’ website saw immediate growth leading up to and during the week of the video’s formal release, with a lag for the other brands (first chart). DC released the teaser videos the week of May 17th and their traffic grew 150%. When the video itself was released two weeks later, traffic grew another incredible near 250%. While the other sites’ traffic was relatively flat during those two weeks, the Subaru pages saw enormous growth the week of June 7, coincident with viral exposure as evidenced by the video appearing on other sites. Supporting that the gains were associate with the video, the DC and WRX pages quickly lost momentum after the release week; the gains in traffic to the Subaru site overall traffic continued for another week, but some of that may be related to early interest in the 2010 Subaru Legacy Outback and Legacy, which were on dealers’ lots in July.

Compete also measured the impact in terms of total weekly traffic measured as unique visitors (second chart). “Unique” means a person is counted only once in these data even if he/she visited the site more than once (this is relevant because people are likely to buy only one vehicle). Traffic results also show what appears to be a lagged impact from the timing of the lift in DC Shoes auto traffic and WRX page traffic. Based on volume change, DC Shows auto was the main beneficiary, with about 60,000 incremental unique visitors during the week of May 31 compared to the week prior. The WRX pages posted a week over week lift of nearly 50,000 unique visitors. The continued growth of traffic to the Subaru site overall (as noted above coincident with some early 2010 model launches) actually supports the hypothesis that the video drove WRX traffic specifically as page traffic for WRX (not significant changed for the 2010 model year) follows the DC Shows auto pattern and not the Subaru overall pattern.

This preliminary analysis indicates both the magnitude of the impact for DC Shoes and the lag effect for WRX, as well as what may have been a lesser effect for Monster Energy. There are several additional ways to further validate the impact:

• DC Shoes: Quantify the extent to which consumers that visited during the week of May 31 returned to the site in June or otherwise engaged with the brand (such as including “DC Shoes” in search queries and/or by visiting other pages on the DC Shoes site).
• Subaru: Evaluate whether the visitors during the week of June 7 were in-market auto shoppers (or became in-market shoppers) based on, for example, the extent to which they researched other models shortly before, during, or after the week of June 7.
• Monster Energy: Identify the extent to which the relatively small gain in the number of unique visitors was a function of other Monster Energy marketing (ad campaigns/sponsorships, etc.) overwhelming the impact of the DC Shoes placement.
• All: Measure the extent to which visitors to the sites were already demographically or behaviorally similar or whether the campaign created new connections that can be leveraged in the future.

There is buzz in the news about U.S. auto sales numbers having remarkable growth in July.  The “cash for clunkers” government program CARS (Car Allowance Rebate System) most certainly had something to do with that.   The main focus of the government program is to get older vehicles that typically get less than 18 mpg (miles per gallon) off the street, and replace those vehicles with more fuel efficient alternatives by offering a voucher for up to $4,500.In July, not only did people get cash for their clunkers, they also got the most fuel efficiency out of their purchases with the average of all vehicles being 28.3 mpg.  In July, the list of vehicles that topped the list of vehicles sold included Ford Focus, Honda Civic, Toyota Corolla, Toyota Prius and Ford Escape.  With so much action on the showroom floors across the U.S., was this program also drawing similar attention online?

According to the data, the answer is yes.  Traffic to the website cars.gov, the official website for the “cash for clunkers” program, saw a M-O-M volume increase of 781% in July, with over 3.3 million Unique Visitors.  As more and more consumers researched cars.gov, the next logical step in investigating the government program was to research cars.  Unique Visitors to the U.S. automaker websites were also on the rise in July.  General Motors (gm.com) lead the way with a 58% M-O-M increase, while Ford (ford.com), Dodge (dodge.com), Jeep (jeep.com) and Chrysler (chrysler.com) had increases of 48%, 38%, 30% and 29%, respectively.

Unique Visitor traffic to Cars.gov and the U.S. Auto Makers

Unique Visitors to foreign automaker websites also increased in July.  Traffic to Hyundai (hyundaiusa.com) increased 35% M-O-M, while Toyota (toyota.com), Honda (automobiles.honda.com), Mazda (mazdausa.com) and Subaru (subaru.com) had increases of 33%, 24%, 24% and 22%, respectively.  Clearly the success of the “cash for clunkers” program has stimulated the demand for both domestic and foreign vehicles.

Unique Visitor traffic to Cars.gov and the Foreign Auto Makers

Today the Senate will vote to extend the “cash for clunkers” program that would add an additional $2 billion to the program and extend it until Labor Day.  If passed, the additional funding for the program will help drive strong U.S. auto sales once again in August.

But that is not the end of the story.  In a future blog we will be taking a deeper look at Compete’s online consumer activity to see which automaker benefited the most from “cash for clunkers” related traffic.  Was this traffic increase aided exclusively by “cash for clunkers”, or were other attractive automaker incentives contributing to the July sales increase.  Stay tuned for part two…

Suzuki ran an ad for its SX4 Crossover in 2009 that compared it to the Mini Cooper. “Mightier Than the Mini” the ad proclaimed as it spelled out how the SX4 was superior to its small car competitor. The mission was to create new demand as well as tap into exiting Mini demand (i.e., funnel pre-existing Mini demand to SX4). The ad ran once in Q1 and again in June and received significant air play. Compete analyzed whether the ad drove drive more SX4 shoppers and if so, whether it was able to capture the Mini shoppers Suzuki was targeting.

The ads appear to be generally successful in increasing SX4 Crossover demand, with some caveats. The “Mightier Than The Mini” campaign ran in Q1 2009 and SX4 Crossover shopper counts reached a period high 16,000 in March. That SX4 shopper count best occurred near when Mini shopper counts reached a period high (February). The Mini lift may be the result of Mini advertizing, though both models were recovering from fourth quarter 2008 demand lows, driven in part by the economic meltdown which drove market-wide shopper counts to historic lows. When the ad ran again in June, SX4 Crossover shopper counts improved 10% month-over-month from May, but this time Mini shopper counts fell to a period low 21,500.

While the campaign timing coincided with higher SX4 Crossover demand, the second test is the extent to which it drove more Mini shoppers to consider an SX4 Crossover. To reveal that, Compete analyzed cross-shop behavior of those same Mini and SX4 shoppers. In general, cross-shop levels are very low, suggesting that the Suzuki campaign, if successful, would generate new behavior (rather than re-enforcing existing behavior).

Cross-consideration of the two vehicles reached a 2009 high in March (the same month SX4 Crossover shopper counts peaked). The combination of more shoppers and higher cross-shop with Mini suggests the ads were successful on both target measures—the first time. In June, when the ad ran the second time) cross-consideration continued a downward path. Success is a relative term: Even at that March high, fewer than 3% of Mini shoppers also shopped a SX4 Crossover. And the period high cross-shopping came in November 2008. Mini may represent an attractive aspirational target to position SX4 against. Unfortunately, consumers don’t necessarily share that sentiment.

Instead, SX4 Crossover is shopped against other Asian small car models such as Fit, Versa and Yaris, in addition to the SX4 Sedan. Those models are consistently in the top 10 cross-shop set of SX4 Crossover shoppers. In June, SX4 Crossover shoppers cross-shopped 117 other models more than the Mini.

Suzuki SX4 – Mightier Than Versa? Suzuki SX4 – Mightier Than Honda Fit?

Mini may be an aspirational target for Suzuki to position the SX4 Crossover against. Its demand is consistently ahead of SX4’s, though Mini demand has softened of late. However, SX4 is not naturally on the radar of most of SX4 shoppers. Hence there are some additional business questions that can be used to further refine the understanding of the success and refinement of the campaign, with a goal of cost-effectively driving sales:

• If the SX4 campaign’s greatest success (March 2009) was due to Mini advertizing driving Mini demand coupled with “Mightier Than” ads channeling some of that demand to the SX4 Crossover, it would make strategic sense to time future runs of the same ad around specific instances when Mini is advertizing (such as around launches of new versions and packages). To validate, compare Mini ad spend with Mini shopper counts.
• With SX4 shoppers pre-disposed to cross-shopping other small Asian brand models, Suzuki may want to consider targeting one of those vehicles in future ads. Because cross-shop levels are already relatively high, the ads could focus on the reasons to buy an SX4 Crossover. Good targets would be vehicles with high demand, such as driven by launch-related ad spend (such as the recently launched 2010 Mazda3) and/or models with poor conversion of shoppers to buyers. Track shoppers, conversion, and sales over time to stay abreast of the best targets.