Auto makers embrace social media

Auto Makers Embrace Social MediaWinning the Social Media RaceFrom manufacturers to dealers, the automotive business is embracing social media just as fast as any other industryout there. For the US automotive industry, which has been on a roller-coaster ride since the last few years, socialmedia seems to be the light at the end of the tunnel. With active vehicle buyers more than willing to follow a brandon Twitter or checkout teaser videos of the soon-to-be-launchedcar, auto makers have found a low-investment, high returnssolution to their marketing problems. Much before the otherbrands could catch up, Ford, considered to be the poster child forauto makers, made it very clear that social advertising is no longera fad or an accessory to traditional marketing. According to the„Top Social Brands for 2010′ report by Vitrue: Automotive brands represented 17% of overall web chatter on popular social media websites, behind only Consumer Electronic Brands (30%) and Fashion and Retail (20%). Ford, Mercedes, BMW, Honda and Ferrari were top five social automotive brands of 2010.The above data shows that social media plays a crucial role inmarketing for the automotive industry overall. Automotivemanufacturers have long since discarded the tag of being „late comers‟ to social media. The millions of dollars setaside exclusively for social advertising and the creative digital campaigns that have been launched so far, indicatethat auto makers are serious about winning the socialmedia race. When it comes to social media marketing,this industry is showing no signs of slowing down. Hereare some reasons why: Luxury car makers like BMW, Mercedes-Benz and Audi have a strong presence of YouTube, Facebook and Twitter because social media is where their potential customers are. Social media is a powerful tool for brands to test the waters before launching a campaign or a product. Auto companies monitoring online conversations pertaining to their brand can address questions about their vehicles and provide answers almost immediately. The pre-launch buzz generated on various networking channels reduces the amount of traditional advertising done by a company after the vehicle goes on sale. Besides generating sales, social media marketing for automotive manufacturers also lowers business costs. The interactive nature of social media establishes strong brand-customer relationships and helps connect with fans, owners and prospective buyers. The Social Influence on Purchases The last few years have witnessed a major shift in the way customers make purchasing decisions. Unlike© Position2, Inc. 1

before, when traditional marketing messages majorly influenced how people shopped, social networking has changed the way consumers think, decide and buy. According to a recent study by eMarketer: o 21% of vehicle purchasers were influenced by some form of social media. o Ford owners were more likely to be influenced by online reviews and earned media than Chevy or Toyota owners. o People who bought Toyotas were highly influenced by coupons and discounts than those who purchased Fords or Chevys. It is clear how influential social media can be when it comes to buying automotives. However, we were eager to know how these companies, using social media marketing, persuaded people to buy their vehicles. Here‟s what we found: o WOM Recommendations: Car makers are depending on networking sites such as Facebook and Twitter to spread the word about new car launches, events and services provided. The likes of Toyota, Ford, and Land Rover are turning to young social media influencers to create buzz around their products. Word-of-mouth recommendations are not only inexpensive when compared to high-profile celebrity endorsements, but also increase the probability of reaching prospective customers online. The influencers, with their strong online followings, give a brand more credibility with younger shoppers. Toyota Motors‟ digital campaign for its new compact Lexus CT 200h enlisted social media personalities such as Baratunde Thurston (Web Editor of satire website the Onion) and Brian Solis who propagated the message, creating significant buzz around the brand. o Discounts, Deals and Special Offers: Discounts, deals and offers are key driving factors for consumers looking to buy anything, whether it is apparel or automotives. When it comes to shopping for a car, one of the first places prospective buyers will check out is a brand‟s social media page before actually visiting a dealership. Offers such as „free gas cards‟ for people „liking‟ a page, „retweet for a test drive‟, „free auto insurance‟ etc will not just encourage people to visit the dealership, but also play an important role in influencing their purchasing decisions. How the Big Players Nailed It What makes companies like Ford, Toyota, Honda GM etc the industry experts in social media marketing? Our research on how the big players established a strong social media footprint and what online marketing strategies they used revealed some interesting findings: o Building the Pre-Launch Buzz: When it comes to building pre-launch social media buzz, no one does it better than Volkswagen. Automakers looking to gain visibility and build- up online chatter about their vehicle can take a leaf out of Volkswagen‟s social media marketing book. The company „accidently‟ leaked its Super Bowl commercial on YouTube before the kickoff, generating the most buzz in cyberspace. Viral Video Chart‟s list of most contagious global viral ads ranked the Volkswagen commercial, „The Force‟, as #1. o Nothing Works as Well as a Facebook Games: Instead of merely launching a Facebook contest to promote its CR-Z, Honda took it one step further by entering the „Car Town‟ Facebook game. The Japanse automaker played all its cards right by a) targeting the car-enthusisats who would© Position2, Inc. 2

eventually check out the vehicle either on the company‟s website or by visiting a Honda dealership and b) highlighting the car‟s sporty and fuel-efficient capabilities in the game version, thus attracting prospctive customers to check out the vehicles‟ video commercial. o Making Fans Feel Special: Getting fans involved in your social media marketing strategy can do wonders to your online traffic; and this is exactly how Ford nailed it. The Detroit auto giant kept hatchback fans in the loop during the production process of its Focus ST. Followers and fans on Twitter and Facebook were treated to sneak peeks, videos of test drives, and were informed of step-by-step developments during the production phase of the car. The outcome? Over +300,000 Facebook users have signed up so far. o Revamping Brand Image: The global financial crisis, which was at its peak in 2009, severely impacted the auto industry. One of the companies that was hit hard, not just financially, but also with respect to brand image, was GM. The company‟s comeback strategy was smart and creative. With little bank balance remaining, the automaker used social media to explain their recovery plan, showing that they still cared about their customers. The GM: Reinvention campaign, which was launched on Twitter, Facebook as well as blogs, successfully changed GM‟s brand image from a financially bleeding company to a transparent and accountable organization. o Engagement is the Key: When it comes to social media, there is a direct relationship between engagement and ROI. One of the most recent automotive brands to set a benchmark in terms of how to engage with fans and customers in social media is BMW. The company was ranked #1 in the inaugural L2 Prestige 100® Facebook IQ Index. The study evaluated each of their 54 Facebook pages, which were maintained according to various geographic regions, business segments and products. What made BMW the „ultimate social machine‟ was its highest engagement rate index; and why not? The brand‟s global page plays host to 5.5 million fans. Don’t Drive in the Wrong Direction The automotive sector jumped onto the social media bandwagon, even as other businesses were in the initial stages of going ‟social‟. While some companies were only too happy to blog, tweet or post, there were few others who simply had to get involved because that‟s where the auto enthusiasts and prospective customers thronged. Nevertheless, the last few years have witnessed a lot of car manufacturers who have successfully transformed their brands by leveraging the power of social advertising and networking. However, where there are success stories, there have also been instances where auto manufacturers have driven in the wrong direction. While building a social media strategy, here are some things that auto makers should keep in mind: o Tweet with Care: For some marketers, the Twitter journey starts with creating an account, handing the reigns over to a ‟social media expert‟ and ends in a one-way street, where response from the company is either delayed or completely absent. While Ford Motor Corp‟s @ScottMonty Twitter account is the perfect example of responsible Tweeting, Chrysler‟s social media faux pas showed how one careless tweet can dent a company‟s image. o Always Listen: The dynamic nature of social networking makes its all the more necessary for marketers to listen, watch and respond to the© Position2, Inc. 3

online buzz concerning their brands. Whether it is fans expressing their dislike for a particular car model, or first-time buyers looking for advice, not monitoring a brand‟s social media activities increases the risk of PR crisis. By using media monitoring tools like Brand Monitor, you know exactly how well that snazzy convertible has been received, if the advertising strategy needs to be tweaked further and what you can do to keep customers happy. o When you Should Own Up: Sometimes the best way out of a sticky situation is to own up, apologize and move on. Chrysler‟s response to the „F-Bomb‟ fiasco was poorly received and only gave the story legs. It is only human to have an „oops‟ moment occasionally and prospective car buyers understand that. Acknowledging the mistake and taking measures to correct it can save time and prevent the situation from snowballing further. o Is Your Social Media Strategy Controlled? One of the biggest challenges GM faced with social media was the company‟s controlled and reactive approach. The company only reacted to negative comments, without being proactive and engaging in conversations. GM‟s controlled presence on social media channels like Facebook, Twitter and YouTube had almost no user generated content. Automakers particularly need to have an open and proactive online approach because a) most people wondering what car to buy are only too happy when offered assistance b) waiting for prospective customers to approach first may result in a missed opportunity c) buying a car can be an emotionally driven decision for some people; in such cases, a smart dealer or carmaker assisting customers gives out the message that „we care‟. o Ironing Out the Imperfections: As an automaker looking to promote products or services on Facebook, you have it all covered; the spec sheet is available, details about the mileage, top speed etc have been included. Yet, the social media page doesn‟t look perfect. Although the most important information has been featured, there are some finer details that go into creating that perfect Twitter handle or Facebook page. Here‟s what we suggest: a) include as many visuals as possible. Attractive visuals are the key to luring customers b) don‟t do a „Lamborgini‟ or „Ferarri‟; double-check for misspelling and c) always link to the main website.ConclusionUnlike yesterday, when auto makers solely depended on auto shows and traditional marketing channels for visibilityand revenue, automobile companies are rapidly taking to social media because of the obvious benefits involved. Withindustry giants like Ford, Toyota and Honda (to name a few) investing a large part of their marketing spend towardssocial media, the road ahead for this industry certainly looks inviting. According to J.D. Power, around 9% of spendingthis year by automakers will be digital. In 2012, this figure is expected to rise to about 12%, as more companiesembrace social networking and rich media ads in place of traditional TV and print. With the ever growing ‟social‟influence on people‟s purchasing behavior, we expect to see both manufacturers as well as dealers depend onFacebook and Twitter to accelerate word-of-mouth recommendations to connect with prospective buyers. Researchshows that car buyers are doing their homework online before spending thousands of dollars on a new or a used car.This means fewer people are actually visiting dealerships without having done their research online.It is every auto manufacturer‟s wish to nail social media like Ford or BMW. Although the big players companies haveestablished themselves as industry experts in online marketing, their journey has not been without challenges. Whilebrands like Chrysler showed how powerful a single tweet can be, there were others like GM who leveraged the powerof social media during troubled times. That said, the major shift in the way buyers interact with automotive brandsindicates just how important online marketing has become for automakers. As the Vitrue CEO Reggie Bradford aptlysaid, “Social media provides the environment for consumers to drive innovation forward by letting their voices beheard. Brands that are firmly rooted in the social Web will succeed by being able to harness this tremendous powerof insight and endorsement.”© Position2, Inc. 4

About Position2Position2 is a Search and Social Media Marketing firm that delivers continuous growth for our clients using ourproprietary “Surround and Intent” Marketing Methodology, delivered by our products. Our proprietary methodology isa result of years of experience in working with diverse clients to deliver customer acquisition goals through searchengine optimization (SEO), social media marketing (SMM), and Pay Per Click (PPC) and online media advertising.Position2 was founded in 2006 with funding from Accel Venture Partners, and has offices in Palo Alto, Bangalore andMumbai. Position2 is a certified agency with Google, Yahoo, Bing and is also part of the Google Adwords advisorycouncil.Position2s flagship product is Position2 Brand MonitorTM, a platform that allows users to listen, discover and engagewith social media conversations in real time. With a team of over 100 professionals, Position2 also provides expertisein online marketing solutions: SEO, PPC, Media and Advertising.Position2 works with leading global brands:This article is also available on the Position2 Blog: http://blog.position2.com.For more information, visit http://brandmonitor.position2.com or email info@position2.com.© Position2, Inc. 5

Auto makers embrace social media

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Auto makers embrace social media Document Transcript