Eight of 11 car marketing executives interviewed at the North American International Auto Show in Detroit last week told Advertising Age they plan to increase their ad budgets. Three executives said their '99 budgets would be comparable to last year's.
General Motors Corp., which cut ad spending substantially last summer because of its labor strikes, expects to return to the same level, or slightly less, than 1997, said Ronald Zarrella, president of GM North America.
BACK FROM STRIKE
In 1997, GM was the nation's No. 1 advertiser, with $2.6 billion in measured media, according to Competitive Media Reporting. In the first half of 1998, the auto giant spent just more than $1 billion, while the entire category spent a whopping $3.6 billion.
Although DaimlerChrysler's Chrysler, Dodge, Jeep and Plymouth brands will receive about the same level of spending as last year, the marketing mix is changing.
"How you deploy your ad budget is changing," said Arthur "Bud" Liebler, VP-marketing. "Traditional advertising is not going to get the job done anymore."
DaimlerChrysler won't abandon network TV, however; Mr. Liebler said the medium is still needed for a mass reach. But the company is expanding its use of non-traditional methods.SUBHEAD
For example, Dodge just signed a multimillion-dollar exclusive automotive sponsorship deal with Universal Studios (see accompanying story).
David Pelliccioni, corporate marketing manager at Toyota Motor Sales USA, said the marketer has increased its budget for the fiscal year ending Sept. 30 by a double-digit percentage from the previous year. In 1997, Toyota spent $596.3 million.
Hyundai Motor America will spend 15% more in advertising this year than last, said David Weber, VP-advertising.
Hyundai is trying to polish its image to a quality, value-oriented brand from a discounted car marketer (see related story on Page 26).
FORD SPENDING MORE
Every vehicle division of Ford Motor Co. will get more money for advertising in 1999, said Robert Rewey, group VP-sales and marketing, although he declined to be specific.
Ford has a number of key launches this year. Lincoln's new LS sport sedan debuts in the second quarter, and Ford Division will launch its all-new Focus small car in the U.S. this fall. It already is on sale in Europe.
Mike Seergy, VP-general manager of Nissan North America's Nissan Division, said he is seeking a 25% increase in his budget for the next fiscal year, starting April 1. This spring, the division launches its all-new Xterra sport-utility vehicle, aimed at attracting younger, more price-sensitive customers than buyers of its Pathfinder.
PREFER TO SPEND ON ADVERTISING
When Nissan's current fiscal year ends, Mr. Seergy expects the brand's spending on incentives and rebates to be flat compared with the previous year, vs. a 25% increase for the industry as a whole.
"I'd rather spend money on advertising than marketing," he said.
One of the reasons for the "spirited rise" in auto advertising, according to auto consultant John Slaven, a former auto and agency executive, is that 1998 was "a great year the industry didn't foresee" and the auto companies will