Social Leaderboard_Indian luxury car brands_14 September 2012

SOCIAL LEADERBOARD
LUXURY CAR BRANDS: 1st Sep – 14th Sep 2012

1:
INDEX:

 SOCIAL LEADERBOARD:
week-on-week performance of top 3 luxury car brands…

 SUMMARY
Potential upside for the festive season…

 RECONNECT GRADE:
o BMW

o AUDI

o MERCEDES-BENZ

 WHY COMMUNITIES?

 METHODOLOGY:
the research process…

 ABOUT SHACK

©Shack Companis. All Rights Reserved. Social Leaderboard: Luxury Car Brands

2:
SOCIAL LEADERBOARD

1st September – 14th September 2012

93%

82%

65%

Historical Ranking

86% 84%
79% 79% 80%

51%
46%
40%
31%

4th-17th Aug 18th-31st Aug 1st-14th Sep

BMW Audi Mercedes


3:
SUMMARY
12.0%

10.0%

8.0%
Engaged Users (%)

BMW
6.0%
Audi
Merc
4.0%

2.0%

0.0%
Week-5 Week-6 Week-7 Week-8 Week-9 Week-10

BUBBLE CHART SUMMARY

1. Frequency of user engagement has been most consistent for Mercedes-Benz
2. Active users (%) of Audi have fallen by ~50% in the week after the jungle Quattro drive event
3. Even though % Active users of BMW has increased w-o-w, corresponding user engagement has fallen

3.0x

3.6%
2.5x

1.7% 1.9%
Engagement Frequncy (x)

2.0x
BMW (W9)
BMW (W10)
1.5x
2.0% Audi (W9)
2.3%
3.4% Audi (W10)
1.0x Merc (W9)
Merc (W10)

0.5x

0.0x
- 0.5% 1.0% 1.5% 2.0% 2.5% 3.0% 3.5% 4.0%
Active Users (%)

Notes:

1. Size of the bubble indicates unique active users
2. Engagement frequency: Average interactions per active user


4:
FESTIVE SEASON – POTENTIAL UPSIDE

• The festive season and the Indian GP are round the corner which gives

luxury car brands an opportunity to boost their sales this year. Except for

Audi, the industry this year has witnessed slow growth on account of the

gloomy economic climate (rising interest rates, fuel prices etc.) which has

caused consumers, especially first-time buyers, to defer their purchase.

• Sudhir Rao, MD of Skoda India believes that "Festive discounts across the

industry will be significant as car makers fight it out for the limited customer

pool in the market."

• Therefore, brands will be spending on discounts, promotional offers and

freebies to clear out the rising inventory, more likely of older variants of

their models, and buck the existing sales trend.

GROWING MIDDLE CLASS - THE MAIN TARGET

1200

1000
Monthly Sales (units sold)

800
2010
600
2011

400 2012*

200

0
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Note: *2012 monthly sales volumes only available till September


5:
 We observed the monthly sales numbers of Audi India for the

previous 3 years and witnessed that sales jump in September-October

and then gradually fall up till December.

 Demand by existing luxury car owners/repeat buyers is largely

inelastic for promotions, discounts. Discounts, promotions provide

greater stimulus for upper-middle consumers who normally purchase

near-premium brands like Honda and Volkswagen.

 They are looking for a good deal and move up the value chain.

 The auspicious time of the season also prompts individuals to make

purchases during this season.

 As a result, we observe a big gap between the actual outcome and

the desired one.

THE OPPORTUNITY

We believe that the target group for luxury car brands can be broadly

segregated into 2

1. TG-I: The immediate target audience is existing owners and

prospective buyers of the brand. The primary communication

objective here is to inform this group about product launches, special

offers and share brand-related news. The brand would also listen to

this audience for their feedback, answer their queries and look to

them to influence others based on their experience.


6:
The Brand

TG-I: Owners
& prospects

TG-II: Brand
enthusiasts

2. TG-II: The other target group is that made up of enthusiasts who

admire the brand for its technology, heritage, personality and other

brand qualities. This group largely remains ignored by the brand,

with all the mainline marketing communication focused on

reaching out to prospects.

Though TG-II does not have immediate purchasing power to own the brand,

they are a major source of earned media for the brand and help in

evangelizing the brand through word-of-mouth. The brands fans on

Facebook, for instance, mainly belong to this second group. Even a 1%

conversion of these fans in the future will result in 6000-10,000

potential customers for the brand.

The digital medium, with its participatory nature and flexibility in creating

tailored messaging, can be leveraged by brands to improve its brand

reconnect with this latent audience and create brand advocates in the

process.


7:
SPECIAL OPPORTUNITY FOR MERCEDES

Mercedes is lagging behind BMW and Audi. It is the only brand out of the

three German car makers that has heavily invested in the Indian GP - Team,

Engines, Safety Cars etc. It is spending close to INR 8-10 crores in

advertising on the Indian GP, according to estimates. We believe that the

brand has an opportunity to reinvent its image by connecting with a newer

and younger audience associated with Formula-I.

THE APPROACH

We think that the brands will have to address the following gaps in order to

tap this opportunity-

1. Bridge the gap between enthusiasts and owners, instead of keeping

them in silos which is the current scenario. The interaction will help in

multiplying the desirability of the brand.

Owners and enthusiasts
interact in silos


8:
Provide enthusiasts an opportunity to experience the luxury value of the

brand by creating parallel experiences which are accessible to them. e.g.

Food and gifts are an integral part of the festival season. Therefore, the

brand can create a platform that provides a curated list of unique yet

affordable gifting options recommended by influential

trendsetters/tastemakers. Curated Platforms such as AHA Life and The

Fancy can be leveraged to create these experiences.

As we lead up to the festive season, only time will tell whether brands can

identify and act on this opportunity or stick to the old formulaic Twitter

contests, Facebook updates and social ads devoid of any context and, thus,

weak marketing tools.


9:
RECONNECT GRADE
 Reconnect with concept car designs (futuristic model, intelligent

design, pioneering tech) is relatively high

 The Hire web-film series failed to appeal to the TG

1st – 7th September 2012
5.0%

4.0%
Reconnect Grade

3.0%
2.1% 1.9% 1.9%
2.0% 1.4%
1.0%
0.2%
- -
-

8th – 14th September 2012
5.0%
4.3%
4.0%
Reconnect Grade

3.0%

2.0%

1.0% 0.4% 0.2% 0.2% 0.1% - -
-


10:
RECONNECT GRADE
 Existing owners consider the new navigation system to be expensive

 Coverage of the sports car experience, on an average, only managed

to connect with 3 in 500 users

5.0%
Reconnect Grade

4.0%
3.2%
3.0% 2.3%
2.0%
1.2%
1.0% 0.4% 0.3% 0.3% 0.3%
-

5.0%
Reconnect Grade

4.0%

3.0%

2.0%
0.9% 0.7%
1.0% 0.5%
0.1% 0.1% 0.1% 0.03%
-


11:
RECONNECT GRADE
 Promotional content around festive offers was the most popular

theme

 The Star Drive experience, on average, appealed to 4 in 1000 users

5.0%

4.0%
Reconnect Grade

3.0%

2.0%

0.9% 0.8%
1.0%
0.5%
0.3% 0.3% 0.2% 0.1%
-

5.0%

4.0%
Reconnect Grade

3.0%

2.0%

1.0% 0.8% 0.7%
0.3% 0.3% 0.2% 0.2% 0.03%
-


12:
About the Social Leaderboard
The Leaderboard updates the results derived from our internal tools and
methodologies on a bi-monthly basis, based on which we will bring out our
conclusions. Shack uses a proprietary grading mechanism
ShackMatrix™ to derive the Authority, Activity and Reconnect Grades,
which are key determinants of a brand’s social presence. Read more
about the Matrix and Grades.

Why Communities?
Create, Connect, Curate — The Shack Manifesto for Building

Communities

With the social online world becoming an important cog in a customer’s

relationship with a brand, there is a need for a common language that can

give meaning to the seemingly unstructured social data scattered across

platforms that represents a brand’s interaction with its core community.

As has happened with the introduction of any new communication medium,

practitioners are making the mistake of using the measuring stick (such as

views and reach) of traditional advertising media to gauge success in the

social web. For over a half a century, we have been thinking about


13:
marketing in terms of campaigns with a very clear beginning, middle and an

end. But the online digital world is currently in the process of being rebuilt

around people and what we know as the social web, in a few years, would

simply be the web.

Therefore, long term success for brands depends on leveraging these

human relationships to create a strong sense of community around

products, concepts and values that are dearest to the brands.

How we measure effectiveness in Online Communities?

The ShackMatrix™ is a proprietary framework that enables assessment of a

brand’s digital footprint in a holistic way. It is a common language designed to

understand the value of a brand’s online efforts expressed through 5 grades that

combine the understanding of traditional branding with the dynamics of a social

online world.

 Presence Grade: Measures how well is the brand represented on digital

platforms.

 Authority Grade: Measures how authoritative is a brand’s owned-

channels for information on the brand and its products.

 TG Grade: Measures the percentage of the desired target group mix

active on the brand’s owned platforms.

 Activity Grade: Measures the level of activity on existing channels.

 Re-Connect Grade: Measures the extent to which community members

connect and identify the brand with the attributes desired by it.


14:
Data Methodology
We take online performance as a holistic concept. While size of the brand’s

community and level of activity are important factors, the profile of the TG,

the authority of the brand’s platforms and its recall are also equally

important ingredients.

In calculating the ShackMatrix™, we assign weights to the different metrics

on individual platforms in order to combine them into a single comparable

grade that is relevant to the digital objectives of the brand.

The weights are decided based on the relative effectiveness of the platform

to a brand’s community as well as the brand’s own digital goals.

Data Validity and Integrity

We source the data from the brand’s official digital properties. Our scope is

restricted by the data made available through the APIs of the social

platforms we cover.

The coverage of data in this report is restricted to Facebook and Twitter.

More detailed and granular metric studies are done for clients on a project

basis.

Disclaimer

While reasonable effort has been made to ensure accuracy of data, Shack is

not responsible for any damage caused by individual decisions based on it.


15:
About Shack
Shack is a digital marketing company which brings together brands and their

customers in carefully crafted, wholesome communities, providing exceptional

experiences for all.

We leverage communities for brands:

In order to create and maintain buzz around your brand you need your target

audience to form lasting relationships with your brand.

We build platforms for the communities:

Being a one-stop solution for all your community building and web-based marketing

needs, we craft comprehensive campaigns, based on careful strategy, encompassing

an entire digital eco-system.

We develop content for the platforms:

Along with creating engagement tools both online and off-line we also encourage and

facilitate generation of remarkably effective and compelling content, in a methodical

manner by our own team, and in a random manner, by your community members.

We measure the impact on the brand:

You need to monitor the impact that the campaign has on your brand. This impact is

not something hypothetical, it is hard, tangible, three-dimensional data that not only

tells you where you presently stand, but also tells you where you need to go and

what path you need to follow with the help of Shack’s proprietary Digital Ecosystem

Management tool. Website || Blog || Twitter


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