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.
Toyota has been largely on the sidelines since August 2008 while key rivals made moves; its SMI lifts coincided with market factors beyond its control. Toyota’s SMI hump in summer 2008 came on gas prices increasing quickly to an all-time high, which in general helped Toyota and Honda demand and SMI (benefiting from years of promoting fuel-efficiency). Its recent hint of SMI recovery was also gas-related also"”Cash for Clunkers (CGC) ran in July and August. Given that C4C has expired, it is likely Toyota’s SMI will contract in September.
Rivals have been on the move. Those shown may also have enjoyed a clunker bump, but most were showing improvements that predated C4C. Ford SMI in August was up 8 points year-over-year, and has been tracking lock-step with Toyota’s for three months, even edging ahead in August. Ford, Kia, Nissan, and Hyundai all had period peak SMIs in August (table). VW, at 6.5%, was just below its period best. Honda’s SMI pattern is eerily similar to Toyota’s: relatively flat in 2009 as other brands gain (will they be next for a big Q4 push?).
Toyota’s Q4 marketing push covers Toyota brands Lexus, and Scion. Scion SMI in 2009 has been off pace, with a small clunkers-coincident lift in July and August lifting its SMI from a period low. Lexus SMI has trended steadier, with its 2009 average to date only slightly below its 2008 average.
So what metrics will Compete use to evaluate the success of this historic $1B spend? Better SMI to start. And better SMIs for the Toyota brands coupled with lower SMIs for key rivals (meaning Toyota conquests shoppers rather than just sharing them). That would also mean more focused shoppers (i.e., less cross-shopping of rivals among Toyota, Lexus, and Scion shoppers). More focused shoppers typically drive more efficient conversion (more sales from a given amount of shoppers) and make incentives more cost-effective (even more success measures). And more cost-effective generation of sales than a pure incentive-based approach. And sustained success into 2010 even as the Q4 ad effort concludes. And all working in tandem to drive sales.
A heady list? For sure, but with an ante of a billion dollars, Toyota should expect success across multiple measures. And while $1B sounds is a lot, keep in mind that if Toyota spent $2,000 of incentives per model and sold 200,000 units per month, over a quarter that equals $1.2B"¦
Lincoln Merrihew is the Senior Vice President of Transportation at Millward Brown Digital. At Millward Brown Digital, Lincoln is responsible for steering the Transportation Team, which encompasses the automotive and travel practices. Before Lincoln joined the Millward Brown Digital team, he worked at TNS Custom leading the Automotive team, and then continued on there to lead business development for 10 different industry verticals. Lincoln's career aspiration is to create game-changing solutions and insights. Connect with Lincoln on LinkedIn.